Reducing lost revenue from inpatient medical-necessity denials.

Payment denials based on questions of medical necessity have increased significantly for many hospitals, while the odds of mounting a successful appeal have diminished. Instead of focusing primarily on making appeals more effective, hospitals should construct a strategy for reducing the incidence of medical-necessity denials through the collection and analysis of denials data. Hospitals can break down the data to produce optimal approaches at both the case management and service levels to minimizing lost revenue from medical-necessity denials.