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Social Factor Considerations in Addressing Medical Necessity Denials

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As inpatient medical necessity denials continue to rise, it is important to evaluate possible drivers of change in the patient presentation and clinical encounter resulting in this upward trend. Payer denials primarily focus on clinical factors without consideration of interrelated social circumstances. Patients present with unique clinical circumstances as well as social factors leading to increased complexity in addressing care needs. When constructing appeal arguments, social factors should be addressed. 

Appeal Strategy Considerations

1. Full or Partial Admission Denial

A denial may encompass the entire or partial length of stay citing medical necessity with a rationale focused solely on factors such as negative diagnostic findings, hemodynamic stability, or other specific clinical indicators. A detailed review of the entire admission to identify acute medical needs as well as social assessment findings and needs assists with gathering information to support the entire admission. At times, a patient may present with specific acute medical conditions and then stabilize in response to the clinical plan of care. However, the discharge plan of care is equally important as it addresses those social factors that increase complexity of care and preparation for safe discharge of the patient with the goal of readmission prevention.

2. Coverage/Eligibility or Legal Issues

Insurance coverage and eligibility or legal factors are frequently overlooked aspects of medical necessity denial analysis. While the patient may be deemed clinically stable, there could be challenges with the transition to post-acute care needs. The patient may be pending emergency coverage approval for admission to post-acute care facilities or additional continuity of care services post admission. Pending legal resolution related to caregiver/guardianship status can also impede a safe discharge.

3. Delay in Discharge

Payers can contribute to delay in discharge for which they are liable. Documenting all payer communication is important in building a record and timeline of collaboration to ensure patient care needs are met and appropriate reimbursement to the provider. Many times, payer response in approving post-acute care (i.e. Skilled Nursing Facility (SNF) placement or facility transfer) may be delayed. Additionally, families may also delay discharge, which is outside of provider control. For example, if a caregiver refuses to respond to outreach for discharge planning or coordination, or refuses to take the patient home, the provider must ensure a safe discharge plan.

4. Discharge Planning or Continuity of Care Complexities

Discharge planning and addressing continuing care needs present significant challenges for providers as well contributing to claim denials. Specialized care needs, limited community resources, and patient housing issues increases the complexity of the patient care and discharge planning process. Comprehensive discharge planning is essential in reducing the likelihood of readmission.

Payer Insights

Review of payer contractual and policy language for reimbursement related to alternate level of care status. This may be leveraged to support payment for services. Additionally, review of statutory or regulatory guidance can provide insight to facilitate appeals. The Centers for Medicare and Medicaid Services (CMS) has continued to increase focus on Social Determinants of Health (SDOH)[1] to assess the impact on health care delivery, patient outcomes, and necessary care resources. CMS recently changed the severity designation of three ICD-10 CM codes from a non-complication and comorbidity to a complication and comorbidity based on data associated with hospital resource expenditure related to care for patients challenged with homelessness[2].

Denial Prevention Key Points

As payer denials continue to increase, providers must consider the entire picture of the patient presentation. This includes detailed review and analysis of payer denial rationales along with patient clinical and social factors. Applying these considerations in developing an appeal is paramount to successful outcomes.



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