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Effectively Handling Clinical Denials Amid a Pandemic Backlog of Elective Surgeries

Effectively Handling Clinical Denials Amid a Pandemic Backlog of Elective Surgeries
Lisa Dadulo, Clinical Practice Director at HGS Healthcare

Throughout the pandemic, many hospitals had to delay elective procedures for several months or cancel them altogether.  Surgical volumes decreased over 35% in 2020 from March to July.  This has led to a projected backlog of elective procedures and surgeries.  For example, in orthopedic surgeries such as joint replacement and back fusion, it was estimated the pandemic would generate a backlog of over one million surgical cases.  If you multiply that across all the surgical specialties and then add on the other elective testing procedures such as imaging or outpatient testing, there is a cumulative effect of delayed healthcare for patients and a high backlog of case volume for healthcare providers.  Physicians, healthcare facilities, and providers are currently working their way through this backlog of delayed care as the pandemic is shaped by the roll-out of COVID-19 vaccines and updated COVID-19 guidelines.

As providers and hospitals work through the newly scheduled elective surgeries and care related to the backlog, there’s also a corresponding increase in the number of claims filed.  Both providers and payers experience this increase in volume. Most of the changes related to the pandemic have been in three areas: new COVID-19 codes, expanded telehealth rules, and federal guidelines for coverage of COVID-19 testing by insurance.  As these claims for the backlog are not for billing changes related to the pandemic and are related to traditional medical services, the payer’s prior authorization, clinical review requirements, and billing guidelines to substantiate the services remain largely unaffected by COVID-19.  This means for providers is a large increase in the volume of claims where the traditional requirements to substantiate services such as prior authorization, medical records submission, or clinical review on submitted medical records.  This also means a related increase in the volume of claims payers review for medical review on these elective procedures.

For providers and hospitals, re-scheduled elective surgeries and claims submission requires planning for additional volume within revenue cycle and denials management.  As these claims are for elective surgeries, imaging, and outpatient services, there is a corresponding increase in clinical denials for these services with the increased claim volume from the backlog.  Provider RCM services and hospital clinical denials team resources are further stretched with the same pre-pandemic requirement for submitting prior authorization requests, medical record documentation, post-claim medical record request,s and appealing the increased number of denials.  Providers and hospitals are looking for creative ways to meet the old saying, “Dd more with less.”

The traditional route of handling claims denied for clinical reasons such as “prior authorization missing,” “not medically necessary,” “experimental or investigational,” “level of care”, or other reason is even more crucial to re-examine in the wake of the pandemic effects on the healthcare system and the creation of backlog from delayed elective surgeries/procedures. The traditional method of working with nurses or other healthcare professionals for clinical denials management with manual clinical denial record review, traversing multiple systems, extensive case review, and working with multiple parties on the denials become more ineffective with increased volume.  Providers and facilities must re-look at how they can complete PA requirements, appeal more claims, and appeal effectively on denial root cause with higher volume and constrained resources.

Prior to the pandemic, HFMA reported that “65% of denied claims are never resubmitted.”  As this is the current rate of not re-working/appealing denials prior to COVID-19, volume from the pandemic backlog will likely increase the rate of unworked clinical denials when approaching appealing clinical denials with a traditional method.  Once you add in the component of requiring to solve for denials from multiple payers with varied clinical policies, providers and hospitals are constrained further.  This brings the perfect time to “update” the clinical denial landscape and the environment with a fresh look at the opportunities that technology can bring to the process.  Technology can assist providers and hospitals in handling post-pandemic elective surgery/procedure denied claim volume, increasing their appeal rate and efficacy, and increasing revenue through several claims appealed and overturned.  This approach also allows providers and hospitals to focus key clinician time on the clinical denials requiring their attention the most, and pinpoint their review process to allow for effective clinician allocation.

The goal is to:

– Focus re-work effort where the clinical denials that have a higher propensity to overturn

– Key in on the medical record documentation required to review in order to support the services for a prior authorization request or an appeal submission

– Effectively target appeals to the root cause of the denial as related to the individual payer clinical policy to enable the highest possibility of denial overturn

– Quickly create targeted medical record output that supports the appeal submission

– Automate appeal templates and workflows to enable faster denial processing and appeal submission

Reporting and analytics that clearly shows denial trends and enable efforts to be focused appropriately

How can this be accomplished? Through technology such as artificial intelligence (AI), automation and analytics can help providers look at addressing these goals and work through the constraints caused by the pandemic and backlog.

AI includes cognitive elements such as machine learning and natural language processing that makes sense of unstructured data such as medical record documentation and text. AI enables machines to incorporate subjective processes which require decisions.  With these components, AI brings several potential applications specifically for clinical denials that would be beneficial for post-pandemic constraints by:

– Verifying required medical documentation for frequently denied services and flag tagged portions for clinical review

– Digitizing the request process for commonly required medical records when a patient’s file is missing outside physician records or other specialist encounters to support denied service

– Providing a summary for clinician of the patient’s associated medical condition related to applicable payer clinical criteria

– Generating appeal letters based on medical records for clinician review for common conditions and denied services

Automation or robotic process automation (RPA) also brings an opportunity to increase capacity, automate workflows, documentation, and other optimization potential.  Some of these opportunities are:

– Appeal templates for faster and accurate processing

– Automated prior authorization workflows to negate denials for missing authorizations

  – Up to 10% of ACA plan claim denials relate to prior authorization

– Image recognition to facilitate automated routing and standard appeal follow-up on common clinical denials

– Clinical data integrity through automation using common denial sources from patient and provider data

Together with AI and RPA offer providers, hospitals, and clinicians the opportunity to quickly find the appropriate medical record documentation, quickly compare or relate directly to the associated payer policy and generate effective appeal letters/submissions targeted to the clinical denial root cause.

Reporting and analytics are also crucial components for targeting re-work effort and knowing where to look for denials prevention opportunities. Analytics can quickly compare many disparate data sources and translate it to a user-friendly visual interface for providers and hospitals to see the denial trends and opportunities.  Some of these are:

– Indicate the propensity to overturn denials based on payer, denial error, procedure code, and diagnosis

– Identify trends in clinical documentation integrity by service and common payer clinical criteria

– Identify potentially uncollectible codes through prior appeal trends

In clinical denials, a technology-led approach increases the number of appeals that the hospital can address, amount of dollars collected, and effectively utilize clinician resources.  Analytics, automation, and AI can improve root-cause analysis based on underlying payer clinical criteria while automating rote tasks for staff and allowing them to focus on the denial area where their valued time can be most effective.  In the current pandemic and future post-COVID-19 era, providers and hospitals will continue to work through the effects of the last year.  Adding technology enablement to the clinical denial process will maximize providers’ and hospitals’ ability to navigate this area more successfully and add the ability to maintain or increase revenue recovery in a new frontier for clinical denials and revenue cycle management.


About Lisa Dadulo 

Lisa Dadulo leads the US onshore & nearshore region for the Clinical Practice team in the HGS Healthcare organization and is responsible for supporting design of the clinical offerings including clinical denials and appeals. She has more than 20 years of experience as a Registered Nurse and has managed the entire suite of prior authorization and appeals functions for a state Medicaid program.


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