4 Tactics for Level of Care Denials Resolution and Prevention

4 Tactics for Level of Care Denials Resolution and Prevention

February 28, 2023
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As revenue cycle management experts, we’re always looking at the broad picture of denied accounts placed with Aspirion to see where there is an uptick in payer denials. One area of uptick relates to level of care denials.  Although hospital Utilization Management (UM) teams are requesting inpatient authorization as required by contract, payers are routinely denying those requests stating the patient could be treated at a lesser level of care.

What’s happening on the payer side that could be driving this uptick? Commercial payers are continuing to rely more on digital solutions to reimburse providers. Claims payment utilizing fully electronic methods reached 71 percent in 2020, according to the Council for Affordable Quality Healthcare, Inc (CAQH). That percentage continues to rise as the onslaught of COVID-19 accelerated payer adoption of next-generation automation, artificial intelligence, and advanced analytics capabilities.

For simple claims with predictable characteristics and patterns, these technologies seem to do the job. However complex claims, such as level of care, require more nuanced judgments than today’s advanced technologies can provide. According to one utilization management technology group, their advanced technology can automate up to 40 percent of inpatient cases with a 99%+ accuracy rate. That leaves 60 percent of cases, either being denied incorrectly or needing human intervention.

4 tactics to resolve and prevent level of care denials

Tactic 1: Appeal Strategies
To develop an effective appeal, it’s important to carefully craft messaging by engaging in the art of persuasion. This is where the persuasive writing training of attorneys and the clinical training of nurses come together so nicely. So, what do we mean by bringing the legal and clinical together? It’s making sure that the clinical arguments presented are presented persuasively.

Attorneys are taught to write or to present arguments in a certain way to have the biggest impact. The writing method is called IRAC. It stands for issue, rule, application, and conclusion. It provides a very structured way to best present an argument in the fewest words possible with the most impact to change the opinion of the payer.

A successful appeal must keep the payer focused on the clinical facts that were available to the admitting physician at the patient’s bedside when the decision was made that this unique patient needed inpatient care. And for a level of care denial, in particular, the clinical facts are only those that were available to the admitting physician at the time authorization was requested.

You present the specific information for your unique patient against the general rule or the usual case and then analyze why your unique patient doesn’t fit that usual case – a tight, concise presentation of the facts. For example, if test results were not known at the time of medical decision had to be made, the payer cannot then use or rely on those test results to make their decision.

Tactic 2: Escalation
Sometimes no matter how persuasive your appeal is the denial stands. If you feel strongly that the patient met the inpatient medical necessity requirement, the next step is escalation. The case can be escalated to a payer-dedicated provider representative or via joint operating committee (JOC) meetings. Most payer contracts do have a provision that states account issues can be discussed in JOC meetings. JOC meetings should be utilized strategically as needed. One use case example is when it is discovered that level of care decisions are being made by physicians who were not of the same credential as the admitting physician—same background, same training. The discovery had broad implications which made it a good fit to engage with the JOC.

Tactic 3: Root Cause Identification
Denial prevention starts with a root cause analysis. For true root cause analysis, not a surface-level root cause, you need to ask why and then why again. Start by analyzing the accounts that we were working on, the case management notes, and the medical record to identify the factors going into the decision-making. While you cannot determine the root cause of the physician’s subjective decision-making, we can analyze the criteria that went into that decision-making.

There are seven key areas identified for level of care denials:

  1. Access to documentation
  2. Timing of inpatient order
  3. Physician rationale
  4. Peer-to-peer review
  5. Clinical guidelines utilized
  6. Documentation quality
  7. Communication/process issue

For example, to identify the true root cause level of care denials to get we have to start with the denial which is when the hospital’s case management team reaches
out to the payer to request inpatient authorization. At that point, the case management representative either sends in clinical information to the payer or the payer accesses it directly through their electronic medical record (EMR).

However, there are additional questions you need to be asking.

  • Are you sure that the payer doing the review is receiving the necessary information in the record to make a sound decision?
  • Is the payer able to view all your labs and test results or are they only really able to see the physician consults, HMP, and, progress notes? Physician documentation is so important, but also those additional lab and test results, and vital signs are equally as important to support the inpatient status.
  • Can you confirm that the payer looked at your EMR? Can you verify what sections they looked at? Do you have too much, or too little information turned on in the EMR for the payer to review?
  • Does the access or what you’re sending include the Emergency Room report as that is when the patient is typically the sickest which illustrates the patient’s condition at the time of presentation? If payers don’t have access or haven’t accessed the key information, their decision can be inaccurate.

Tactic 4: Education & Process Improvement
Just as hospitals have staff turnover, so do payers. Therefore, it’s important to continually look for opportunities to strengthen information sharing and process improvement actions. Below are examples of education and process improvement actions our hospital partners have implemented that have proved beneficial.

  • Develop a process to identify accounts in which inpatient orders are written within 24 hours of discharge to further review
  • Develop a process to capture accounts for which UM review is not completed
  • UM nurse education and additional training on criteria selection
  • Provide payer feedback when incorrect criteria were used to deny the claim
  • Provide physician education on documentation opportunities
Want to learn more?

To dive deeper into the resolution and prevention of level of care denials, view our 30-minute Level up Revenue Cycle webinar here.



For over two decades, Aspirion has helped healthcare providers maximize their hospital revenue recovery by focusing on their most challenging reimbursements. Aspirion’s experienced team of healthcare, legal, and technical professionals combined with industry-leading technology platforms help ensure providers receive their most complex RCM revenue so that they can focus on patient care.

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