Peer review organization payment denials: Comparative analysis of emergency department and non-emergency-department admissions

Abstract

The Health Care Financing Administration has contracted with regional peer review organizations to review Medicare admissions and to deny payment for hospital admissions that fail to meet peer review organization criteria. The purpose of this study was to compare emergency department admissions with non-emergency-department admissions with respect to rates of peer review organization denial and the reasons for those denials. All hospital Medicare admissions between January 1984 and April 1987 were retrospectively reviewed. Patients were excluded if they received peer review organization pre-authorization prior to admission. The rest were classified by 1) source of admission (emergency department or non-emergency department), 2) peer review organization decision, 3) reason for peer review organization denial, 4) whether the denial was appealed, 5) the results of appeal. Chi-square or Fisher's Exact Test analysis was performed, and P < 0.05 was considered to be significant. During the 40-month study period, there were 19,847 emergency department Medicare admissions and 19,752 non-emergency-department Medicare admissions. Of the non-emergency-department admissions, 7887 received pre-authorization. None of the emergency department admissions received pre-authorization. Of the 19,847 emergency department admissions, 433 (2.23%) were denied. Of these denials, 269 (60.7%) were appealed by the hospital; 136 (50.5%) successfully. Of the 11,865 non-emergency department, non-pre-authorized admissions, 333 (2.81%) were denied. Of these denials, 174 (52.2%) were appealed, 76 (43.6%) successfully. Overall, emergency department admissions were significantly less likely to receive peer review organization denial than non-emergency-department, non-pre-authorized admissions ( P < 0.003). When we looked at individual categories for denial, only Severity of Illness and Fragmented Care had significant differences ( P < 0.00002, and P < 0.002, respectively). We conclude that, in this setting, emergency department Medicare admissions are at lower risk of peer review organization Medicare denial than non-emergency-department, non-pre-authorized Medicare admissions. This difference is due to decreased denials in the Severity of Illness and Fragmented Care categories.