Advanced Revenue Cycle Analytics: An Overview
What is a closed loop denial prevention process?
- Closed loop; noun – a control system with a feedback loop that is active
- Denial; noun – the refusal to satisfy a claim, request, desire, etc.
- Prevention; noun – an action that stops something from happening
- Process;noun – a systematic series of actions directed to some end
As the name implies, a Closed Loop Denial Prevention Process is one designed to prevent denied claims. This process uses a system of rules and edits to provide consistent feedback that is dynamically available each time conditions are present that will result in a denied claim. The process alerts users to the potentiality of the denial and instructs modifications that will prevent the denial from occurring.
Beats the heck out of sticky notes.
Even if they have never thought about the term closed loop denial prevention, this is a process that White Plume users know well. They’ve most certainly been keenly aware that AccelaSMART™ is a dynamic, interactive method of finding potential denials and fixing them prior to creating charges and submitting claims.
To better understand what a closed loop denial prevention process is, let’s first examine what the opposite would be and study what normally happens when a payor implements a proprietary rule. According to AMA’s 2012 National Health Insurer Report Card, Aetna has over 62,000 proprietary rules in addition to over 1 million edits that are considered “industry standard”. Table 1  shows the total number of claim edits by rule source, by payor.
Table 1. – Total number claim edits by type and payor
In an environment where payers have free reign to define their rules and disclosure is optional; providers have to keep up with the ones that apply to their specialty, location, services, patient panel and other criteria. Sometimes, advanced notification of the rules’ implementation is communicated in a newsletter, typically weeks before enactment. Billers rely on manual methods (sticky notes) and to a large extent – their memories – to comply with these rules and count on their clearinghouse to catch what they have missed.
But clearinghouses don’t always supply the means to catch all the proprietary rules and don’t delve into the granular nuances that aren’t applied nationally. Catching these types of corrections is normally left to the intellectual capital found in a key employee or two who just “know” how to get claims paid; based on previous denial experience and their diligence in keeping current with new rules. They are a valuable commodity and subject to the frailties of mankind, if not the lure of a better position or a different career path. This describes the open loop process of denials prevention – relying on staff to remember and catch a soon to be denial before it is submitted.
So, how do you create a Closed Loop Denial Prevention Process? It requires a rules engine capable of finding claims that are destined for denial; preferably before they are posted to the PM system so that backend modifications and corrections are not needed and without creating a lag time prior to submission with negative cash flow impact.
With AccelaSMART, White Plume clients use their denials experience and payer communications to proactively set up customized rules. These rules are designed to prevent denials and improve 1st Pass Pay rates (the rate at which claims are paid with the first submission). The customization available within AccelaSMART allows users to set up the specific criterion that applies to their services, coding, master files, providers, region, plans and other details about a specific claim to ensure it will pass the payer’s edits. Think you don’t need that much granularity? Remember, United Healthcare applies over 82,000 rules to adjudicate claims over and above the industry standards. Think about that.
Diagram 1 depicts a Closed Loop Denial Prevention Process, starting with the advent of a new policy or denied claim, building a customized rule to catch conditions that will trigger a denial, enabling the rule for all billers to use and thereby preventing the denial from happening again.
Diagram 1. – Closed Loop Denial Prevention Process
The great thing about a Closed Loop Denial Prevention Process is that it is scalable and uniform across an organization. The process can be applied consistently for each biller, regardless of their experience, skill sets and day-to-day distractions. It improves productivity with workflow designed to minimize errors and streamline corrections. Using a closed loop process significantly reduces the time clinicians spend on getting claims paid and puts process improvement at the right point in the life cycle of a charge.
Ultimately, a Closed Loop Denial Prevention Process improves cash flows and profitability by ensuring claims can be paid as they should be, quickly and completely.;