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

BACKGROUND: Despite minimal coding and billing training, surgeons are frequently tasked with both in clinical practice. This often results in denials for reimbursement based on incorrect or insufficient documentation, and reduced collections for work performed. We sought to evaluate how to correct these deficits while improving reimbursement for the most frequently rejected procedures at a high-volume academic center. STUDY DESIGN: Hospital billing data were analyzed for a 4-year period (2018 to 2021) to determine the CPT code denials with the largest overall cost. The denials were then stratified according to payor, reason for denial, and preventability. Assigned ICD-10 codes were categorized based on specificity as related to the procedure. The distribution of denials according to ICD-10 specificity was evaluated using the chi-square test. RESULTS: A total of 8,833 denials representing $11,009,108 in billing were noted during the study period. The CPT code 44970 (laparoscopic appendectomy) was the code associated with the largest financial impact, representing 12.8% of the total denied amount ($1.41M). Of the 823 denials for CPT 44970, 93.3% were associated with nonspecific ICD-10 codes, whereas only 42.0% had been associated with procedure-specific ICD-10 codes. Of the patients with nonspecific codes, 80.7% of denials were due to criteria that could be remedied with supplemental information or timely filing, representing $1,059,968 in collections. CONCLUSIONS: This is the first study to systematically evaluate a pathway for using denial data to improve collections for work performed at a high-volume academic pediatric surgery practice. Using this methodology, targets for improvement in coding and/or documentation can be identified to improve the financial performance of a surgical department. This study also provides evidence that association with nonspecific diagnostic codes is correlated with initial denial of payment by insurance companies.