Denial Rates in the Danger Zone: Coding to Withstand Audits

By Angela Lima BS, CCS, CDIP, CIC, COC, AAPC-Approved Instructor

“One-third of US hospitals’ average denial rates are in ‘danger zone,’ survey finds”

Did this catch your attention?

This recent article in Becker’s reported results of a survey by consulting firm Harmony Healthcare indicating 33% of hospital executives said their average denial rates were more than 10 percent. Why is this happening? Thirty-two percent of these hospital executives chose coding as their top concern.

If you oversee the coding process or directly manage coders, this concern on the part of hospital executives means that this unacceptably high denial rate is of concern to you also.

There are many forces to blame for this increase in denials. The pandemic disrupted everything. Payers may be making up for loss revenues with increasingly aggressive auditing of claims.

We may not know specifically which dynamic is causing the increase in denials, but given that it is happening, what can you do about it? How can you provide the best defense for your organization? Make no mistake; if coding is your responsibility, it is up to you to do something about it.

So how do you assure that your team codes cases correctly and that the coding will withstand an audit? Coder training may be your best defense against the increase in denials. It comes down to ABCD:

  • Coding that is Accurate truly reflects the patient’s story as captured by the record. There is clear documentation that supports the code selection.
  • Coding that is ‘By-the-book’ means you are able to show why your coding is correct by quoting the applicable guidelines and rules. Your code selection is not depending on unsupported advice found on the internet or “we always do it this way” justification.
  • Coding that is Complete tells the full story of the patient’s condition and treatment. Finding the information requires knowing what to look for and knowing where in the record it will be.
  • Coding that is Defensible means that when the denial comes, you are able to explain and support your code selection using the conventions, guidelines and reliable sources that govern the code sets.

Denials will come. Payers have strong motivation to deny claims or at least delay when they must be paid. And your appeals will not always prevail as there are other factors besides coding that are considered. But arming your coders with the training they need for the work they do gives your organization the best chance of sending the auditors elsewhere to look for those easy dollars.

For the full article see Becker’s Hospital CFO Report “One-third of US hospitals’ average denial rates are in ‘danger zone,’ survey finds


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About the Author

Angela Lima, BS, CCS, CDIP, COC, CIC, AAPC-Approved Instructor
Angela Lima applies a hands-on approach to her role as the Director of Education for Libman Education. Whether overseeing the work of subject matter experts including nationally recognized coding authorities; challenging instructional designers to deliver content in a way that is both engaging and memorable; or tapping her 25 years’ experience in inpatient, outpatient, and emergency room coding to write coder-friendly courses herself, Angela is responsible for ensuring that our training is accurate, easily accessible, and challenging.

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