Navigating Denial Management: Strategies for Financial Resilience

Transcript

CHAD MULVANY

On today’s episode of Achieving Health, I’ve got the latest policy and legislative updates from Washington, D.C., for the week of October 12th, 2025. Then I’ll be joined by my colleague Deb Kozlowski, director in the healthcare consulting practice at Forvis Mazars. We’ll discuss the challenges that many healthcare providers are facing with denials and explore strategies to build financial resilience and reduce denials as they navigate these challenges. Stay tuned.

ANNOUNCER

This is Achieving Health, a podcast from Forvis Mazars, where we delve into the topics that matter most to healthcare organizations across the continuum of care. Our goal is to help you navigate the dynamic healthcare landscape and achieve health at your organization. Here’s your host, Chad Mulvany.

CHAD MULVANY

Welcome to Achieving Health. I’m Chad Mulvany, director in the healthcare practice at Forvis Mazars. Thank you for joining me. We’ll begin today with our Washington Watch segment, where I share updates on the most recent actions of federal policymakers and their anticipated impact on healthcare providers and payers. Today’s Washington Watch reflects information as of noon East Coast on Friday, October 10th, 2025.

My comments on these discussions are based on what’s being reported by the D.C. trade press at the time of the conversation, mixed with a lot of judgment about where things may go based on my experience in D.C., so today’s remarks reflect information as of this moment and will change. As far as our agenda is concerned, the partial shutdown of the federal government is ongoing and as of this moment we are still deep in the middle of it, which is causing some key extenders that hospitals and other providers depend on to have lapsed.

Speaking of hospitals, their margins have been pressured or continue to be pressured. The not-for-profit sector is facing mounting financial pressures as rising supply and drug costs erode already thin margins. According to a recent HFMA article, hospital margins slipped from 1.2% in June to 0.9% in July, driven by a 10.6% increase in supply costs and a 9.5% rise in drug costs year over year. Related to physician comp, according to Modern Healthcare’s 2025 Physician Compensation Survey, physicians increasingly demand additional benefits such as reduced on-call requirements, more paid time off, flexible schedules, and reimbursement for continuing education. And so, without further ado, let’s get into these issues.

In terms of federal funding for 2026 and also the healthcare extenders, the Senate, after multiple rounds of voting, still hasn’t been able to find a compromise that unlocks 60 votes needed to clear legislation through the Senate, and they have recessed for the four-day holiday weekend.

The three issues that Senate Democrats have cited that need to be resolved in order for them to provide the necessary votes to reopen the government include addressing the president’s rescissions of previously appropriated funds, or putting legislation in place that would prevent further rescissions, rolling back the OB3’s Medicaid cuts, and extending the enhanced insurance exchange subsidies. Realistically, I think only the enhanced exchange subsidies are really in play, and it appears that the president and some Republicans are willing to negotiate on an extension of the enhanced exchange subsidies.

However, the current talking point is that they won’t do this while the government is currently partially shut down. And while there are sidebar conversations that continue about what an extension of the enhanced exchange subsidies might look like amongst rank-and-file moderate Republicans and Democrats. However, as of this morning, neither party’s leadership team in the House or the Senate is involved in these conversations, so to say that they are cursory is probably the best way to describe them.

Pressure to reopen the government will increase significantly in the coming days. Today, Friday, October 10th, is the first day that a paycheck will be missed by federal workers. And then on Wednesday, October 15th, our soldiers, sailors, airmen, and Marines will also miss a paycheck.

I still think it’s more likely than not that whenever the Senate finds the votes to pass the CR, that bill will include most of the extender provisions that we care about. And again, as a reminder, these include a further delay of the Medicaid DSH pay cuts that were in the ACA, an extension of the low-volume adjustment in Medicare dependent hospital programs, community health center grant funding, an extension of the Medicare telehealth waivers that were put in place in COVID, as well as the Hospital at Home program, the Geographic Practice Cost Index floors for physicians, Medicare, rural ambulance add-on payments, and key workforce extenders like National Health Service Corp., teaching health centers, and graduate medical education.

In terms of hospital margins, the not-for-profit hospital sector is facing already mounting financial challenges pushed by supply costs and drug costs. According to a recent HFMA article, hospital margins slipped from 1.2% in June to .9% in July, driven by a 10.6% increase in supply costs and a 9.5% rise in drug costs year over year.

Drug prices are expected to increase further, fueled by inflation, high-cost new drugs, and potential tariffs on imported pharmaceuticals. Analysts also warned that even the threat of tariffs can disrupt supply chains and drive costs higher. Hospitals are also grappling with rising expenses and capital investments, IT, and food services. On the reimbursement front, hospitals are not yet feeling the impact of OB3; however, those concerns are looming.

In a new report, the Commonwealth Fund projects that hospitals in expansion states will lose between 11.7% and 13.3% of their margin on average after the work requirement for Medicaid expansion beneficiaries begins in 2027. Safety net hospitals are set to experience a margin decrease of between 25.9% and 29.6%. One of the things that we’ve heard from clients recently is that, as ratings agencies are considering organizations ability to weather OB3, they’re taking into consideration hospitals current margins and certainly that makes sense.

We’re also hearing that some organizations are already seeing an uptick in the uninsured, which is certainly piling pressure on to the trends that we’ve already talked about. And so, if your margin is deteriorating today, it certainly doesn’t bode well for what’s coming. Health systems will need to continue to focus on financial discipline through strategies such as realizing improvement opportunities in labor and non-labor costs, leveraging benchmarking data to increase managed care rates, and increasing revenue cycle efficiency and effectiveness.

Organizations will also need to realize aligned growth opportunities to generate margin accretive revenue. We’ve also heard from clients that they believe they will need to generate revenue growth in excess of 11% annually in order to continue to be sustainable. In response to our mindsets survey, which was fielded late last year, early this year, 62% of executives believe they will primarily achieve growth targets through organic growth.

However, that will be challenged by continued shortages of labor, which could be exacerbated in some markets by changes in immigration policy. Our OB3 series provides guidance on these actions and other steps providers can take to mitigate margin pressure. To register for the series or to hear episodes that have already occurred, there’s a link to sign up in the show notes.

In terms of 340B rebate model, the American Hospital Association warns that HRSA’s planned 340B rebate model pilot, set to begin January 1st, will impose nearly $400 million in costs and 11.2 million labor hours on more than 2,700 hospitals. And that impact analysis doesn’t include CHCs and other types of covered entities that aren’t hospitals.

I think this is great work by the AHA in that they collaborated with their members to put a pin in what the costs would be are certainly a great talking point, particularly for advocacy, because while the eight-page Federal Register notice that announced the rebate model pilot certainly says that the plan that different manufacturers submit for their rebate models should include assurances that all costs for data submission through an IT platform be borne by manufacturers, and no additional administrative costs of running the model shall be passed on to covered entities. I think the AHA analysis just sort of highlights what we already know to be true, even though there is no economic impact analysis in the HRSA notice of the rebate model.

You know, while I hope this analysis will encourage HRSA to reconsider its approach to implementing a 340B rebate model, I don’t anticipate that this projection of administrative burden will slow HRSA down. Therefore, covered entities, if they haven’t already, will need to start thinking through their rebate cycles to capture and submit the necessary data elements within the timely filing requirements.

And in addition to the data management capabilities, covered entities will also need experience in setting up systems of control to manage those workflows. As part of setting up the rebate cycle, covered entities should also establish infrastructure to capture data related to performance for each manufacturer related to timely processing. So, how often the manufacturer pays rebates or provides an answer within ten days.

Denial rates. So, how many claims the manufacturer denies by claims count, dollar value, and percentage of both dollars and claims count. Certainly, if there’s an avenue, there are avenues to flag to HRSA where manufacturers may not be adhering to the requirements. And so, certainly having that data in pocket will certainly bolster your case that maybe the manufacturers aren’t behaving as HRSA had intended through the rebate model.

And then also administrative expense, how much the covered entity spends on staffing, legal, IT support, and other costs necessary to manage the rebate cycle. And then, you know, in addition to using this data to improve the performance of the rebate cycle, covered entities should be prepared to share it with HRSA and other elected officials to support an accurate, data-informed evaluation of the pilot.

I think providing HRSA and other policymakers a full picture of the costs associated with this pilot program will help them understand how rebate models may reduce covered entities funds available to expand access for safety net populations, which is really contra to the purpose of the 340B program. For additional details on the 340B rebate model, we have a link to a FORsight on it in the show notes.

In terms of physician comp trends, according to Modern Healthcare’s 2025 Physician Compensation Survey, physicians increasingly demand additional benefits such as reduced on-call requirements, more paid time off, flexible schedules, and reimbursement for continuing education. Advanced technology has also emerged as a major recruitment tool, with candidates prioritizing hospitals that offer AI-driven tools and telehealth options to reduce admin burden and support work-life balance.

These trends reflect a shift in physician leverage, as employers must compete not only on pay but also on workplace conditions and resources. The same time that physicians are looking for more out of an employer, hospitals and health systems are facing mounting financial pressures from rising operational costs, staffing shortages, and in some states already Medicaid funding cuts and others looming through OB3, making it difficult to sustain both the compensation packages and the additional benefits or tools that make an organization an employer of choice for physicians.

As a result, hospitals and other employers of physicians are becoming more selective in targeting specialties for recruitment. And certainly while rural hospitals remain at a disadvantage, they are struggling to match urban salaries and also face new challenges, such as higher visa fees for international positions. Given the financial difficulties that many hospitals and health systems are facing and the challenge related to securing physicians, it may be time to rethink approaches to physician compensation, the service lines they offer and their workforce strategy.

A couple of questions that hospitals should consider in each area. So, for physician compensation, you know, some organizations are adjusting their comp models and leveraging recent changes in Stark regulations that allow physicians to renumerate positions for improving triple-aim or quadruple-aim outcomes.

And so when you think about leveling up under this umbrella, a couple of things to think about. How does the organization define value? What changes need to be made to the compensation model to align it with the organization’s goals related to this definition of value? And then, what is the plan to modify the comp model as the organization’s definition of value and related goals evolves? In terms of service line strategy, we all know not all referrals are good referrals.

However, unfortunately, some service line leaders lack insight into net profitability. So, as they’re thinking about this and kind of what type of analysis they might want to conduct, I think it’s: does your organization track and make business decisions around service line profitability? How strong are the incentives in the physician comp model to help the service lines that they are associated with achieve financial and strategic goals?

And then in terms of workforce strategy, due to a continuing workforce shortage, many organizations are experiencing challenges that are limiting growth opportunities. And so, it’s going to become increasingly important, despite the cost, for healthcare organizations to become an employer of choice. And so, a couple of key questions in this space. Does your organization understand the key attributes of being an employer of choice for physicians and advanced practice providers?

What is the plan to meet these requirements? And what are the polarizing features of working for our organization? And so, the other thing to think about as you conduct this analysis is physicians obviously aren’t a homogenous block. So it’s important to understand the value that key segments of the provider community place on the different attributes ascribed to being an employer of choice.

If your organization is wrestling with this issue, we have a great FORsight that provides more detail on this topic that we’ve also included in the show notes. And then finally, states cutting Medicaid. We are seeing some states begin to cut Medicaid reimbursement rates as they grapple with rising healthcare costs and budget problems. And this is obviously occurring before any of the OB3 coverage provisions take effect December 31st of ‘26.

And the financing provisions like provider taxes, reduction of grandfathered state-directed payments, kick in in FY2028 and state plan year 2028, respectively. Idaho and North Carolina are two examples of states that have already reduced payments to providers, and it is anticipated that other states may follow. These cuts are coming as demand for healthcare services and costly medications continues to grow, leaving concerns that reduced reimbursement will limit access to care and ultimately drive patients into emergency rooms.

While OB3 is occasionally cited as a driver of the Medicaid cuts in the various states mentioned, I think more of the blame should be allocated to state-specific economic conditions and/or budget factors, and these pre-OB3 cuts could become more widespread if we should see a broader economic turndown. I think it’s important to note that the timeline of the OB3 cuts could leave one with the idea that providers have some time before they kick in.

However, I think it’s important to realize that states, in their next legislative session, will likely start making changes to their Medicaid programs to prepare for these cuts that will impact both provider payments and Medicaid coverage sooner. So, I think the runway for providers to prepare is shorter than some might initially think. This concludes today’s Washington Watch. Up next, I’ll be joined by my colleague Deb Kozlowski to talk about denial management challenges and strategies to build financial resilience.

I’d like to welcome our guest for today’s episode, Deb Kozlowski. Deb is a director on our Healthcare Consulting Performance Improvement team at Forvis Mazars. Her work focuses on helping clients with denial management and other end-to-end revenue cycle improvement strategies. Deb, thank you for joining us today. Looking forward to this conversation.

DEB KOZLOWSKI

Thank you. I’m looking forward to being here.

CHAD MULVANY

I guess let’s maybe start with the basics. Could you share with our listeners a little bit about your background and how you came to healthcare?

DEB KOZLOWSKI

Yeah. So let’s start back when I was a baby. Just kidding. I tended as a child to have a lot of ortho injuries. So, I had a lot of very positive experiences in the healthcare setting. Coming from a family of nurses and not being good with blood, I knew I always wanted to stay around the healthcare field.

Luckily for me, my first job out of college was with a health system in Chicago, so they did a wonderful job teaching me the industry, and I’ve been in it for about 15 years now and loving every day helping providers out there really serve the communities they’re in.

CHAD MULVANY

That’s, you know, it’s a very common story for folks that come to healthcare. First, it’s considered a clinical track, but for one reason or another, particularly being squeamish, you don’t get into it. Then, too, though, that call to mission, that call to serve and to really make sure that the resources are there for the caregivers at the front line to make sure that communities are taking care of the people’s healthcare needs, can be met in a convenient and timely manner.

So that’s, you know, fantastic and appreciate that. Our topic for today’s conversation is reimbursement denials, which are a serious challenge for many of today’s healthcare providers. In our Mindsets 2025 Executive Leadership Report, we found that 76% of executives cited denials management as one of their most concerning aspects of the revenue cycle. And then Clarivate also released a report in 2024 which found that denials now affect, on average, 12% of hospital claims, or in other words, $1 out of every nine billed is initially denied by insurers.

These statistics are alarming. And, Deb, you recently shared a scenario with me that I think really illustrates the impact of denials on hospitals and their patients. Could you share that example with our listeners?

DEB KOZLOWSKI

Yeah. Of course. So again, for those of you that may not be as familiar with denials, this is just one of many stories happening across the country today. So a patient arrives to the ER with chest pain. The care team acts quickly, running tests, images, monitoring, and a short inpatient stay before the patient can safely be discharged back to home.

Everything was done by the books. Weeks later, the hospital receives a denial from the insurance: services not medically necessary. The payer flagged the visit as potentially avoidable, despite the patient’s symptoms and history of risk factors. Now, the burden is placed on the hospital. After already providing excellent care, they now have to fight for payment, gathering documentation, filing an appeal, and waiting and hoping insurances will pay.

This process delays reimbursement and adds administrative burden. In 2024 alone, med necessity denials rose by 5%, especially in emergency and telehealth settings.

CHAD MULVANY

You know, thank you for sharing that anecdote. And certainly the issue of denials has been one that has been on people’s radar as long as I’ve been in the industry. And it was certainly, when I was at HFMA, one of the things that we frequently talked about and worked with our members to address. I guess the other thing that I’d add is, you know, you think about one in every nine dollars billed is denied.

You couldn’t afford that in the world that we’re in today, but you really can’t afford that in a world when the OBBBA cuts start to kick in. And so, you know, I flippantly joked that an underperforming revenue cycle is a luxury item that we can no longer afford. What are the most surprising denials trends that you’ve seen this year?

DEB KOZLOWSKI

Two recent trends that have stood out, one being a significant volume of denials requesting additional information. That was historically reserved for high-dollar claims or specialized services. But now we’re seeing it on low-dollar claims as well. Second would be some of those payer-initiated reductions.

CHAD MULVANY

Do you think the moving of requests for documentation in the lower dollar claims is more technology driven? Is this something that’s being driven by AI, or do you think it’s just more of a, as plans are looking to manage margin, they’re sort of pushing down the dollar threshold at which they start to send out med record requests.

DEB KOZLOWSKI

Personal opinion, it is very AI driven. I also think there’s a lot of concerns that providers, historically, and I’m talking 15, 20 years ago, back when I started and just before, there was advantages being taken by providers that they wanted the med records to support. There were knowledge gaps of services being billed that were deemed unnecessary. And that really snowballed into the problems we’re seeing today.

CHAD MULVANY

No, and appreciate your perspective on that. When you think about the two challenges, the trends you’ve teed up, what are some of the ways that providers can respond?

DEB KOZLOWSKI

Yeah. Great question. So let’s start with the additional information requests. First, you really need to understand the patterns of the payers and the services being denied. Most importantly, get on the phone and speak to your payer reps directly. There are often criteria they can share for when they want records such as if we have a surgery that’s greater than $10,000, we want to see history and physical, an operative report. Use that information. Streamline the process for similar situations moving forward.

There’s often ways in your EHR that you can automate that through, at the time you send a claim to insurance, providing those records or immediately after the claim is received, sending it through a payer portal. If your EHR doesn’t have those tools, there’s vendors that have created bots to automate that process for a fraction of the cost and time.

CHAD MULVANY

And, you know, I think that’s great advice. And the analogy that I would use for it is, you know, you think about it, everyone that you’ve ever worked for, whether it’s a client, a boss, etc., has had certain preferences for how things are sent and you pretty quickly in your career in working with that in a working relationship, figure out what they want and you use that to kind of proactively meet their needs so as to avoid rework or frustration. And I think that, what you just suggested there, is just kind of another example of how one does that.

DEB KOZLOWSKI

Yeah, exactly. And I think you said it very well. And that’s something that’s been around forever. So as you stated, if you’re not already doing it, you don’t have a luxury of waiting. The opposite is true for some of those payer-initiated reductions. There’s been some new language coming out this year for a few of the payers that they are downgrading your E&M levels.

One thing that organizations really need to be aware of is what is built in your system dictionary. These are often coming through with a very specific payer-initiated code, not the traditional contractual or other adjustment. So, oftentimes organizations don’t even realize they’re getting downgraded for these E&M levels. So really understanding that, making sure you have that information, and then appealing that successfully with your coding team and using CMS regulation.

CHAD MULVANY

And I think that’s just another good example of why you have to be on top of trends. Because if you’re not watching that, it’s months later and you start to see a dip in cash and you’re like, why is that happening?

DEB KOZLOWSKI

Exactly. Very well said.

CHAD MULVANY

What are some of the biggest challenges when it comes to how health plans handle denials?

DEB KOZLOWSKI

So, this one has been, I would say, the fun game. So, payers have always created the playbook, challenging providers to learn the rules. And then once they learn the rules, they’re changing them as they go. So, as you stated before, with some of the additional information requests, with the introduction of the AI tools, even the most experienced teams are challenged by the rapid pace of change.

Often when working with payers on those denial reasons, their own reps may not have a clear understanding of the denial root cause. So, it often feels like providers are throwing darts on the board, hoping to hit any number before the clock runs out.

CHAD MULVANY

So, and I’m probably going to date myself with this reference, was a huge Calvin and Hobbes fan, and still am. But we’re playing a game of Calvin Ball. How do you stay on top of these changes? How do you identify them, and how do you even potentially help educate the payers rep when they may not know why these things are going on?

DEB KOZLOWSKI

Oh, very good question. So, really, it all starts with understanding the complete denial reason and reviewing the account thoroughly. So, a big thing that providers tend to do is they think they have to chase after every dollar. But really, being able to quickly make the determination of should my team be spending time on this or should they move on to another account?

So that’s critical. Once you understand it’s something you can and should fight because again, you did everything by the book. You followed the rules that were given to you. Then it’s really important to establish templates and workflows. So, making sure that the process is as streamlined as possible. Getting an appeal in a standard template, referencing the medical record, referencing CMS guidance where you can and following up on that.

Most importantly is making sure that the claim is getting paid. And if it isn’t, take that to payer meetings. Work with them directly to create that accountability between what your team is doing to the best of their ability and good faith, and what the payer is doing to compensate you for that.

CHAD MULVANY

Yeah. You know, I think you tee up a really important point there that the most effective, efficient revenue cycles are the ones where they are working very closely with their managed care contracting teams. And to your point, taking that real-time data and one of the trends that they’re seeing so that they can sit across the table with the payer rep, they can hopefully address the issue in real time. And if they can’t, they can get it fixed in the next round of contract negotiations.

DEB KOZLOWSKI

Exactly. And you touched on a very key point. So, these are some additional areas for organizations to really consider: What is in your payer contract? Have you read through it? There’s often areas in there that say we have the right as a payer to change your policies every 90 days. We’ll build language in there to try to change that to 180.

You can add net neutrality as well, to protect the provider from any policy changes that had a negative financial impact. And boy oh boy, are there a lot of policy changes. So, Chad, I know our managed care team is going to be coming on a future episode to discuss more on that.

CHAD MULVANY

Yeah, absolutely. And, you know, to your point, don’t make it easy for the plans to play Calvin Ball, essentially. So, we talked a lot about the importance of, kind of, monitoring and trending. And there are a whole sort of sea of metrics that you could possibly chase. What are the ones that you consider to be most critical for denial management?

DEB KOZLOWSKI

Yeah, I’ll start with the two most critical, is every organization needs to know their initial denial rate and their denial write-offs. Now, just with those two metrics alone, you should have the ability to split it into many different angles, such as denial reason category, payers, service type, even down to providers. Our Forvis Mazars team has built a denials tool that helps trend those metrics for that insight and action.

CHAD MULVANY

You know, I think you, especially the cut by payers, I think is an important one because you really want to understand which of them are behaving more aggressively than others, shall we say. And again, I think that knowledge goes in and informs those conversations and the tone and tenor with the managed care team.

DEB KOZLOWSKI

Exactly. And I would say a big trend we’ve been seeing in the industry is really developing payer scorecards. So, additional metrics to consider if you have the ability to get the analytics: What is your overturn rate by payer? What is your days to denial resolution? How many numbers of appeals did it take you to resolve to payment?

All of those things are time value of money. And how are you spending the limited resources you have to get the money or make the decision that you have to move on and adjust off a denial and move forward.

CHAD MULVANY

That overturn rate is something that’s important not just for your your revenue cycle and your cash flow management, but also from a policy perspective, particularly for your governmental payers. There are a lot of conversations going on at the state level about managed care plans, and certainly about your governmental payers at the federal level. And so the ability to share that data with both your state hospital associations to inform advocacy, with your national hospital associations to be able to inform advocacy and highlight that there may be some issues that we need legislative or regulatory changes for.

And so, I think that’s a great reason why you want to collect that data as well. So, Deb, what’s one of the biggest misconceptions about denials that you’d like to debunk?

DEB KOZLOWSKI

That’s such a great question. And, honestly, one of the biggest misconceptions is that denials are a back-end problem. So often, organizations focus downstream in the appeals, the rework, write-offs. It’s like standing at the bottom of a waterfall with a bucket, trying to catch the water as it crashes down. By that time, it’s already too late. The denial happened, costing time and money.

The real issue starts upstream. So, imagine the revenue cycle like a river. It’s calm and controlled at the top with scheduling, eligibility, and authorization. If there’s a leak, say, a missed authorization, a tiny eligibility error, that error flows downstream, gaining force and momentum, eventually becoming a waterfall: loud, messy, and difficult to control. So, a lot of the misconception is that the solution’s at the bottom of the waterfall, when in reality the opportunity is at the top.

It’s about prevention, not cleanup. Organizations have to move upstream to tighten the process, invest in their analytics, in the team training, build collaboration between groups and stop those leaks before it becomes a waterfall. So, once you start thinking this way, denials stop being a crisis and start becoming a system you can actually control.

CHAD MULVANY

You know, Deb, that’s a great point. And it’s kind of the ounce of prevention is worth a pound of cure. And I do think, you know, the analytics, the tools, the ability to kind of do QA is important. But also, when you think about the registration department or the registration departments in your organization, they typically have a fairly high degree of turnover.

And so whatever expertise people build, you lose. So I think the emphasis on training and making sure that either a) you’re retaining the people you’ve got or, as new people are coming in, they have the skills and the tools they need to catch those things, to get the right auth number in, or to know that they need to put an auth in, or to make sure they’ve got the right insurance information entered in with all the pieces, like that’s just so key and so important. And it’s simple to say, but really hard for organizations to do. And I think that’s a place that really merits more time and attention.

DEB KOZLOWSKI

Yeah, you said it very well. And I think a lot of organizations struggle with understanding the three pillars of technology, process, and people. So, in an area like registration, where the people tend to have a high turnover, you really have to have your technology and process locked in, where in other areas you might have really strong people and they can overcompensate for weaknesses in the technology or the process. So, understanding where you have your strengths and weaknesses to really lean into that.

CHAD MULVANY

Yeah. No, that’s a great point. I really appreciate that. Can you share a quick win or success story from an organization that turned its denial rates around?

DEB KOZLOWSKI

Yeah, I would love to. Recently, we supported an organization with developing a denial steering committee due to many factors, including an EHR conversion. The denial rate was 24%. Within a year, though, they were able to turn it around and get it down to 14%. The first objective was to get all of the denial data and understand where the true problems were, silencing the noise of the waterfall to really focus on the facts of the issues occurring upstream.

Our next objective was working with leadership, understanding the true denial root causes and gathering support to form a denial steering committee and who should be included. Specifically, we went beyond the revenue cycle and included IT, chargemaster, some operations, and even clinical areas for their specific issues. Finally, we were able to establish expectations with a committee charter, standing agendas, trending metrics, and really aligning the team members to appropriate subcommittee groups to meet and solve problems monthly.

We were really able to focus on changing the narrative for that organization, that it was a quote‚ “back-end problem‚” by providing really specific examples within the larger denial patterns. And we were able to take it one by one with each leak identified. In some of the areas, we focused on technology optimization and others, it was process improvement through training sessions, and throughout it all developed accountability checks and trended metrics. So they had sustained efforts. I’m really proud of everything that organization put in. It was a lot of hard work for them to achieve that success.

CHAD MULVANY

I love the anecdote and what I think I like about it so much is it really underpins a lot of what we’ve been talking about. And specifically, you know, there were multiple points which needed to be fixed. The organization had the data or was able to get the data to do the root cause analysis. And I think it all starts with, you know, what are you monitoring or what can you start monitoring to fix those issues?

DEB KOZLOWSKI

Absolutely. And I feel like a lot of organizations today, and, you know, you hear the AI and the RPAs of the world and, you know, you think you need to spend all of this money to get it done. And, hey, do not get me wrong, the technology out there is great and there are huge value-adds that it can provide.

But a lot of the problems are truly simply on the people and the process. And the more you can lean into that, the more you can even lean into your EHR systems to build criteria and requirements and stops, the more you can really manage addressing this without having to take on additional costs at this time.

CHAD MULVANY

You know, I think you raise a great point. The tools are fantastic, but you have to deploy the tools in an environment where the processes are tight. So that way the tools are able to be most leveraged and create the efficiencies. Otherwise, you’re just automating broken processes.

DEB KOZLOWSKI

Exactly. And I think the message that I’d like, you know, the listeners and everyone to hear is, you know, automation is wonderful. It helps improve consistency and early detection, but it’s not a cure-all. So, technology is only effective as the process train behind it. So, successful organizations really pair automation with human oversight and using the analytics to pinpoint patterns, reallocate teams, and really continually educate to prevent repeat denials.

CHAD MULVANY

Yeah, no, I think great points, great advice. Let’s wrap up with some some actionable takeaways. What advice would you give a healthcare leader facing rising denial rates?

DEB KOZLOWSKI

As we’ve stated, the first thing you have to do is get your data. You’re going to get a lot of noise, and, you know, it’s going to be hard to really distinguish where the leaks are coming from or, you know, where it might just be some mist going on. So really being able to understand your performance against those industry benchmarks we’ve discussed today and ultimately start with one problem.

Do not try to bite them all off there. Often when you can focus your resources on one big issue, that is where you can build the momentum for future ones to come. And if you don’t already have it, you have to get a denial steering committee together. Have it cross-functional. Make sure you have the right people in the room so that you’re not wasting anyone’s time. It’s direct, specific, and actionable to get to the real problems and solutions needed.

CHAD MULVANY

You know, I think that point about the denial steering committee is an important one, right? Because, I mean, the revenue cycle is a team sport, but it really underpins the fact that denials are, given how multifactoral they are. So, I appreciate you calling that out.

Well, Deb, it’s been a great conversation. I really appreciate you taking the time and sharing your insights with us and want to thank our listeners for tuning in.

If you’re looking for more insights on denial management and revenue cycle improvement strategies, we have links to related content in the show notes. I hope you’ll join me on November 5th for the next episode of Achieving Health.

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