presents Establishing a Lean Quality Approach to Denial and Appeal Management

1. presentsEstablishing a Lean Quality Approach to Denial and Appeal Management Lean

2. Is the glass half empty… …or half full?

3. The Staggering Cost of Denials Total Revenue Administrative Expense Lost Revenue High denial rates impact both the speed at which you get reimbursed and the administrative costs associated with being reimbursed. It is estimated that the cost of claims rework is as high as 20% of overall revenue cycle operating costs.1 An additional 6% of gross revenue is lost to underpayments.2 Nearly 13% of annual provider revenue is at risk to payer denials nationwide.2 1. Steven Huddleston, “Creating a Healthy, Unified Revenue Cycle” HFMA Revenue Cycle Strategist, November, 2012 2 . “Keys to Effective Denial Management”Emdeon Compass, March, 2010

4. ICD-10 Implementation October 1

5. Fable of the Lion & the Gazelle

6. It's Not the Big that Eat the Small...It's the Fast that Eat the Slow Survivalof theFastest

7. “You can’t do today’s job with yesterday’s methods and be in business tomorrow.” Lee Iacocca

8. Lean Process Improvement Henry Ford Production Line Efficiency — Flow

9. The Revenue Cycle Production Line Raw Materials Production Process Finished Products • Denials • Zero Pays • Short Pays • Chart Review Requests • Identifying • Analyzing • Qualifying • Rebills • Adjustments • Appeals Quality Control • Measuring KPI’s • Timing • Sequencing • Inspection • Supervision

10. Lean Process Transformation “All we are doing is looking at thetimeline from the moment the customer gives us anorderto the point where we can collect the cash. And we are reducing that timeline by removing the non-value-added wastes.” Kaizen Change TaiichiOhno Toyota Production System - TPS Good Produce only what the market wants Use visual aids to highlight where action is needed Use small batch sizes Continuous Improvement

11. Lean Process Problem Solving Dr. W. Edwards Deming Plan Plan Do Act Do Adjust Check Study PDCA PDSA

12. Don’t let perfect get in the way of better = Current Work Processes P P P P P D D D D D C C C C C A A A A A One improvement often leads to another Waste Value

13. Standardized Work Source: lean.org

14. Standardized Denial Processing

15. Eliminating Waste – Muda D O W N T I M E Defects Effort caused by omissions and incorrect information. Q Transportation Unnecessary movements of documents and files. Over-processing More work or higher quality than is required. Inventory Excess denials, zero pays & short pays not processed. 6 Motion Unnecessary movement by people (e.g. walking). Waiting Wasted time waiting for the next step in a process Employee Underutilization Underutilizing staff talents, skills & knowledge Non-Value Added Processing Processes that do not add value.

16. Defects Data entry errors. Other types of registration, coding or payer errors. Any error that gets passed downstream — only to be returned for correction or clarification. Many causes can be prevented by learning lessons from the lean sisters: Carin & Sharin.

17. Over-processing Relying on inspections, rather than designing the process to eliminate errors. Re-entering data into multiple information systems. Making extra copies. Generating unused reports. More work or higher quality than is required to win an appeal

18. Waiting 6 Slow computer speed. Downtime (computer, fax, phone) Waiting for approvals. Waiting for information from customer, payers, providers or other departments Waiting for clarification or correction of work received from upstream process

19. Non-Value Added Processing Any unnecessary work that does not add value to the process Re-entering data Extra copies Unnecessary reports Excessive reviews Multiple signatures

20. Motion • Unnecessary movement by people • Walking to copier, printer, fax... • Walking between offices. • Central filing. • Going on a "safari" to find missing information. • Backtracking back & forth between computer screens. • Where did I put that?  This is related to hunting and gathering.

21. Transportation Q Unnecessary movements of documents and files Multiple hand-offs of electronic data. Approvals. Excessive email attachments. Distributing unnecessary cc copies to people who don't really need to know. Using antiquated methods where electronic methods exist

22. Employee Underutilization Underutilizing staff talents, skills & knowledge Restricting employee's authority and responsibility to make routine decisions. Having highly skilled staff do routine tasks that don't require their unique expertise. Not providing the business tools needed to perform and continuously improve each employee's assigned work.

23. Inventory Things waiting in an (electronic or physical) In Box. (e.g. unread email) Any form of batch processing (e.g. transactions, reports...) Unresolved or unprocessed denials can be considered inventory Includes denials, zero pays & short pays not identified

24. Root Cause Analysis “The Denial” The Underlying Causes “The Root” Below the Surface Not Obvious No Authorization Billing Issues Coding Coordination of Benefits Cost Outliers Duplicate Claims Eligibility Issues Information Required from the Patient Information Required from the Provider Non-Covered Services Untimely Filing The word root, in root cause analysis, refers to the underlying causes not the one cause. Symptom of the Problem “The Weed” Above the Surface Obvious http://www.thinkreliability.com/Root-Cause-Analysis-CM-Basics.aspx

25. Root Cause Analysis Categorize Claim Adjustment Reason Codes (CARC) by type. Analyze Denials by Category Amend Processes to Prevent Future Denials

26. Fishbone Diagram People Process/Policy Inadequate staffing in patient access Lack of coordination with registration Inadequate training Poor role definition Problem Statement Computer downtime Overcrowding Equipment Environment

27. Denial Value Stream Value Stream: All of the activities, required to resolve a denial from determination to appeal (and beyond to cash received). Value Stream Process Process Process InitialDetermination Resolution

28. The Three Forms of Any Process 1. What we think the process is 2. What the process really is 3. What the process should be 5 1 2 6 3 4 1 3 5 2 4

29. Value Stream Mapping Process Denial Management Process Foundation (the basis) for the future state; 70-80% accurate is acceptable (directionally correct) Document Current State Create flow by eliminating waste (now obvious from the current state map) Design Future State 3 Day Event Repeat Include accountability and timeframes for completion Create Implementation Plan The goal of mapping! Implement!

30. Value Stream Mapping Kit

31. What Gives the Better Return? Getting better at what you do? Eliminating delays between what you do? Lean focuses on delays

32. 835 Denial Review Assign Review 4 days 2 days 2 days 1 days 1 Min/Avg .5 Min/Avg 5 Min/Avg .5 Hr Identify the actions taken in the value stream Adjust or Bill Patient 2 days Calculate calendar time for each action 2 Min/Avg Yes Valid? Calculate time actually worked on the action No Correct Resubmit Identify time between actions 2 days 2 days 10 Min/Avg 1 Min/Avg Appeal Gather Documents Write Appeal Submit to Payer Reopen? 4 days 8 days 5 days 2 Weeks Yes 5 Min/Avg 10 Min/Avg 2 Min/Avg 15 Min/Avg No

34. Kanban Kanban is actually Japanese for visual card or sign Toyota Production System, TPS What we call “Lean”

35. Kanban Board • Visualize, optimize and manage workflow • Enable real-time team collaboration • Make Process Policies Explicit

36. Core Practices for Successful Kanban Adoption Shallow Visualize Workflow 1 Manage Flow 2 Make Process Policies Explicit 3 Improve through Collaboration 4

37. Kanban is based on 3 principles Start with what you do now 1 Initially, respect current processes, roles, responsibilities & job titles 2 Agree to pursue incremental, evolutionary change 3

38. Manage Work in Process • Without adding more resources • Better manage resources • Improve the process • Kanban board does not drive us • It reflects our best understanding of the process and how work should be done • Revise it as you know more

39. Start by Modeling Your Existing Process Denials Board Appeals Board Audit Board

40. Payer Workload Assignment & Management Inpatient Outpatient Provider Auto AssignWork CARC Bill Type Patient(alpha split)

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