Denial management is an extremely critical aspect of anesthesiology revenue cycle management (RCM), where multi-stage billing processes and stringent payer rules may lead to high denial rates. It involves the incorporation of specialist knowledge, technology, and safeguards to avoid claim denials. In this blog, we will talk about the most common issues of anesthesiology practice denial management services and the top ways to prevent them.
1. Time-Based Billing Errors
Anesthesia billing is distinct as a time-dependent calculation-dependent (i.e., base units + time units) process. Undercoding (lost revenue) or overcoding (audit exposures) may result from minor differences in recording start/end times or procedure interruptions. Manual tracking is the cause of these exposures and denials typically result from poor time documentation.
Solution:
- Investment in Anesthesia–Specific Software: Install billing software with automatic time tracking capability and modifiers (e.g., QK, QX) to preclude misuse.
- Staff Training: Train anesthesiologists and coders thoroughly in accurate time documentation, such as step-by-step management of interruptions and post-op care.
- Audit Workflows: Periodically audit workflows to search for discrepancies between time logs and coding.
2. Complex Coding and Modifier Abuse
Anesthesia coding requires the use of CPT codes, appropriate modifiers (or physical status modifiers for example P1-P6), and the application of payer-specific rules. The first reason for denial of the claim is the absence of modifiers or the surgery/anesthesia code combination is incorrect. For example, a missing AA modifier resulted in the denial of the claim.
Solution:
- Optimize Certified Coders: Utilize certified coders with anesthesia specialty certifications (e.g., CANPC) to satisfy CMS and payor regulations and improve denial management services.
- Automated Claim Scrubbing: Use dedicated software to identify coding anomalies, missing modifiers, or ICD10 code incompatibility before submission.
- Coding Updates: Stay updated with bi-annual CPT code updates (e.g., base unit adjustment) via webinars or trade journals.
3. Insurance Verification and Preauthorization Gaps
40% or greater of denials are caused by eligibility problems, i.e., stale dated coverage or not pre-authorizing high-risk procedures. The most commonly used staff for anesthesiologists is hospital records, thereby eliminating insufficient insurance verification.
Solution:
- Preprocedural Eligibility Checking: Incorporate real-time eligibility verification programs into the Electronic Health Records to perform preprocedural checks for insurance coverages and pre-authorization requirements.
- Patient Communication: Obtain current insurance information through patient portals and pre-set out-of-pocket amounts before receiving the same.
- Collaborate with Hospitals: Establish practices with hospital registration personnel to facilitate appropriate data transmission for hospital-based care.
4. Payer Policy Variability and Fee Schedule Complexity
Anesthesiology practices deal with multipay policies (Medicare, Medicaid, private payers) with different fee schedules, bundle mandates, and modifier rules. For example, Medicare’s Medical Direction rules differ from those of commercial payers, showing a higher likelihood of denial.
Solution:
- Payer–Specific Rulebooks: Maintain one repository to store payer policies and fee schedules to direct the coders. This denial management service practice helps improve workflow organization.
- Technology Integration: Utilize RCM software with payer-specific rules enforced automatically while preparing for claims.
- Denial Trend Analysis: Track payer denial codes (e.g., “invalid subscriber ID” or “bundled services”) to permit resubmission.
5. Compliance and Audit Risks
Anesthesia billing is regulated by HIPAA, MACRA, and new CMS rules. Noncompliance— i.e., upcoding or poor documentation— may result in audits and penalties.
Solution:
- Compliance Training: Periodic staff seminars on HIPAA updates, documentation needs, and fraud identification.
- Internal Audits: Hire third-party auditors to review coding accuracy and documentation completeness. This can help minimize errors in denial management services.
- Outsource Compliance Management: Let RCM vendors who have anesthesia billing expertise manage audits and appeals.
6. Patient Billing and Collections Issues
High deductible plans transfer costs to patients, but anesthesia services (more often than not billed with surgical charges) confuse patients about billing details. This affects payments.
Solution:
- Transparent Patient Communication: Provide itemized statements separating anesthesia fees from surgical fees.
- Flexible Payment Options: Provide payment plans, payment discounts at the time of service, and convenient online portals.
- PreService Cost Estimation: Offer precise out-of-pocket estimates prior to procedures with predictive analytics.
7. Resource-Intensive Denial Appeals
Resource-intensive denial appeals are time-consuming and expensive with practices spending $25–$50 per claim on rework. Anesthesia denials are most often due to coding errors or complex appeals of medical necessity.
Solution:
- Automated Denial Management Systems: Utilize tools to classify denials, auto-generate appeals, and track resubmission deadlines.
- Outsource Appeals: Board denial management service providers with experience handling high-volume or complex cases for anesthesiology practices.
- Root Cause Analysis: Identify recurring reasons for denials (e.g., “missing modifiers”) and correct them.
8. Denial Report Standardization Deficit
When payers use repetitive denial mitigation codes and messages, trend analysis becomes impossible. A payer denies a claim as a “non–covered service” and the other denies the same claim as an “incorrect modifier”.
Solution:
- Centralized Denial Dashboard: Summarize denial information from multiple payers onto analytics platforms and emphasize trends.
- Work with Clearinghouses: Utilize clearinghouse relationships to normalize denial description and simplify the appeal process.
Perfecting Denial Management Services in Anesthesiology Practices
Anesthesiology clinics are faced with stacked denials but intelligent investment in technology, staff training, and outsourcing will keep the denial levels under control and maximize revenues. Accurate coding, partnering with RCM specialist vendors to get optimized denial management services, and transparency and clarity with payers and patients are some of the important measures needed. All these will help build a thriving, denial-free clinic.
