Within the frequently frustrating arena of medical billing, it’s the paradox that never ceases to confound some of the brightest minds in the business: Procedures listed by payers as “No pre-authorization required” are among the most commonly denied for payment after they’ve been completed.
Part of the problem is the general unwillingness of payers to even entertain a request to authorize procedures they’ve listed this way. They’ll point the provider straight back to their “No pre-auth required” sign and then, when the claim comes in, they’ll often send the stakeholders away empty-handed.
The stakeholders in this scenario as applied to radiology, of course, include a referring physician along with the patient and the radiology services provider.
Claim/service lacks information which is needed for adjudication, the payer will say. Or perhaps the wording will be The scan is investigational or This is not a covered benefit.
“Regardless of the particular denial code, what they mean is that you did not establish medical necessity,” explains Aaron Hackman, radiology reimbursement specialist at UCHealth, the hospital system of the University of Colorado. “That’s what it all comes down to. And I mean all of it.”
In other words, “No pre-auth required” must be read as “No pre-auth required as long as someone establishes medical necessity.”
Hackman will share his know-how on doing just that, built on more than two decades’ experience, on Wednesday, Aug. 3, at the AHRA’s 44th Annual Meeting and Exposition in Nashville, Tenn.
Clinical review just like the payers do
“Plans that don’t require pre-authorization for imaging really are a worst-case scenario for everyone” except the payer, Hackman told Health Imaging while previewing his presentation, which is titled “Getting It Right Up Front.”
Over the first half of 2016, Hackman’s expertise helped save UC Health’s University Hospital at Metro Denver close to $107,000 per month, dropping its denied-claims rate by 24 percent. This was especially noteworthy since three other hospitals in the UC system saw their denials go up—two dramatically so (one by 98 percent and another by 72 percent).
What is Hackman doing right? Running a growing operation specifically focused on establishing medical necessity prior to performing imaging studies. Last fall, he hired a nurse with experience performing clinical reviews for an insurance company. UC Health is happy with the results so far and has approved the hiring of two more nurses to report to Hackman in the same capacity.
“I was only looking at PET scans and joint/spine MRIs because I only had the resources to focus on these exams,” he says. “I started with those because they are our highest-denied exams. They have stringent documentation requirements around medical necessity.”
Hackman’s fast-expanding clinical-review program may be unique among hospital-based radiology departments in the U.S., but he’s certain it would be easy enough to replicate far and wide—which is why wanted to discuss it in Nashville.
Front-end attention, back-end rewards
The program had its genesis in patient complaints over bills sent by UCHealth when payers refused to pay in those “No auth required” situations.
“If an authorization is required and we do a scan without getting one, we eat the loss,” Hackman explains. “If it doesn’t require an authorization and gets denied on the back end, we of course do everything we can to appeal it. But if the denial is upheld, the patient gets billed.”
Hackman saw some truly heartbreaking scenarios unfold. He recalls one patient who told him she wanted to relocate to another part of the country so she could be close to family while going through cancer treatment. She couldn’t afford to move because her budget-shattering bill had gone into collections.
In another case, a patient had had six PET scans. “Nobody knew all these repeat scans were racking up a huge bill until the first one was billed to the patient and then it came back to me,” Hackman says. “Those studies are about $6,000 a pop. By the time this reached me, all six were in the pipeline to be denied and then billed to the patient. That patient was on the hook for $36,000.
For many people, a medical bill that big might spell bankruptcy.
“If our medical necessity processes had been in place at the time that patient came through,” Hackman says, “we would’ve caught all of that in time to head it off, easily.”
A radiology checklist manifesto
The foundation of Hackman’s