Improving Billing and Collections in a High-Volume Pediatric Surgery Practice: Denials-Based Approach

Area of Science:

• Surgical billing and reimbursement optimization.
• Healthcare financial management.
• Medical coding and documentation improvement.

Background:

• Surgeons often lack comprehensive coding and billing training, leading to documentation errors.
• Incorrect or insufficient documentation results in claim denials and reduced revenue for surgical services.
• High-volume academic centers face significant financial losses due to these coding and billing deficits.

Purpose of the Study:

• To evaluate methods for correcting coding and documentation deficits in surgical practices.
• To improve reimbursement for frequently rejected procedures at a high-volume academic center.
• To identify specific areas for intervention to enhance financial performance.

Main Methods:

• Analysis of hospital billing data from 2018 to 2021 to identify CPT code denials with the highest financial impact.
• Stratification of denials by payor, reason, and preventability.
• Categorization of ICD-10 codes by specificity and evaluation of their association with denials using chi-square testing.

Main Results:

• Over $11 million in billing was denied across 8,833 claims during the study period.
• Laparoscopic appendectomy (CPT 44970) incurred the largest financial impact ($1.41M).
• Nonspecific ICD-10 codes were linked to 93.3% of CPT 44970 denials, with 80.7% potentially remediable, representing over $1 million in potential collections.

Conclusions:

• This study presents a systematic approach to using denial data for improving collections in academic pediatric surgery.
• Targeted improvements in coding and documentation based on denial analysis can enhance departmental financial performance.
• A strong correlation exists between the use of nonspecific diagnostic codes and initial payment denials by insurance companies.