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 payors 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.
Now how do you create a closed loop denial prevention process? Stay tuned for the next post!