We Must All Hang Together: CMS Automated Denial Policy Puts Doctors, Hospitals in the Same Documentation Boat

When a government agency decides not to adopt a policy “at this time,” it is a safe bet that policy is coming soon. Case in point: The Centers for Medicare & Medicaid Services has, for the second time this year, announced that it will allow its claim review contractors to deny any claim “related” to a claim that has been denied after documentation review. Some of those “related” denials can even come without any additional documentation development and without a second review. In other words, denial of one claim can trigger automatic denials of any and all claims related to it.

CMS attempted to institute this policy in February, but reversed course weeks later citing a need for “clarification.” The only clarification in the new version is that CMS will play a role in preapproving automated denial targets. Beyond that, virtually every facet of the program remains as clear as mud, even what “related” means.

The obvious example, and the scenario CMS cites (without limiting itself to that situation), is a denied hospital claim for a service leading to automated denials of the claims of the physicians who performed the service. This prospect is understandably concerning for physicians, but that concern can be to hospitals’ benefit. Physicians who may have been unconvinced of the need for Documentation Improvement Programs are at risk for finding thousands of new reasons to change their minds.

For this new impetus to improve medical records to be effective, however, hospitals need to make sure they can meet the new-found demand. That could mean simply redoubling current efforts, but it may mean relying on the expertise of consultants who can help give doctors the “how” of documentation improvement, now that CMS has helped provide the “why.”

Check out our white paper for a fuller exploration of this topic.