ICD-10 Denials and Payment: Understanding the Relationship
CODING Q&A: Laudine Markovchick, RHIT, CCS, Manager, Coding and Learning & Development

MEET MEDICAL NECESSITY ON THE FRONT END TO REDUCE DENIALS.

What is the current state of denials that result from ICD-10 coding errors and the appeals management process?

Answer: Every denial has a direct financial impact on healthcare organizations’ bottom lines. Whether due to coding errors, failed medical necessity, mis-keyed charges, or incorrect insurance data, everyone involved in the revenue cycle plays a role in reducing errors and denials. And even if denials are not valid, valuable staff resources are spent addressing them.

Since ICD-10 implementation, coding denial rates have not changed significantly for inpatient claims. The majority of inpatient denials still are focused on sepsis, chronic obstructive pulmonary disease (COPD), malnutrition, respiratory failure, and acute renal failure. Denials for these target diagnoses will continue, and more diagnoses likely will be added as ICD-10 data becomes more widely available.

On the outpatient side, health plan, Medicare, and Medicaid denials are on the rise. Failed medical necessity is a common culprit for outpatient claims. Coders need to be sure to code outpatient encounters more comprehensively as payers have become selective in pinpointing connections between medical treatment and medical necessity. If medical necessity is not met on the front end, the risk of denials climbs.

Whether struggling with inpatient or outpatient coding denials, the strategy is the same: Reduce errors to prevent denials from occurring in the first place.

This is an excerpt from HFMA’s Revenue Cycle Strategist October 2017 article. Please click here to access the full article.

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