Appealing denied claims used to be a simple process. A biller working with a physician's office would stamp "APPEAL" in big red letters on a photocopy of the claim, and mail it back to the insurance company. These days, you’d be wise to put the cost of that postage in the bank, and throw away both the APPEAL stamp and its red ink stamp pad. This sort of knee-jerk response won’t even make it past the insurance company's initial computer screening; they’ll likely toss such “appeals” into the trash and you’ll never hear anything back from them.
To successfully appeal denied claims, you need to get your “A-game” on; otherwise, you won’t see a penny for your efforts.
Follow these steps to effectively appeal denied claims.
1. Recognize denials. Insurance companies don’t print the word “denied” in big letters across the top of the claim form. In fact, the word “denied” may never appear at all. The insurance company simply declares the reimbursement amount to be “$0” and enters an adjustment reason code next to the amount paid. The key is to identify it as separate and distinct from a contractual adjustment, which is – and should be – a write off.
2. Understand why the claim was denied. Before you pick up the phone and demand to speak to the claims representative, determine the root cause of the denial. You can’t effectively appeal until you know why payment for the service was denied. In addition to the reason code, there is a remark code. Look up the insurance company's definition of that code to get details about the reason for the denial. WPC maintains a complete listing of standard reason and remark codes, available at www.wpc-edi.com/content/view/711/401/
3. Don't procrastinate. There is often a timeframe in which you can resubmit a claim after it’s been denied. Pull the record, research the code, call the patient, etc., but don’t delay: most insurers only allow a few months to resubmit a claim for reconsideration.
4. Follow the insurance company's rules. Each insurer has an appeal process. The Centers for Medicare and Medicaid Services (CMS), for example, has a form to complete when appealing the denial of a Medicare claim called the "Medicare Redetermination Request Form". (See www.cms.gov/cmsforms/downloads/CMS20027.pdf) Get familiar with the insurer's protocols to understand your options if your first appeal is turned down. Don’t give up; most insurers have multiple levels of appeals and even a grievance process if you disagree with the outcome after you've exhausted the appeals process.
5. Make a compelling case. An appeal means that you disagree with the insurance company's decision, so put your debate cap on and gather supportive evidence to present your case. Perhaps the most important aspect of your claims letter is the content. The letter should go well beyond stating, “please pay my doctor.” Build a compelling case for why the claim should be paid:
• Develop a professional letter that begins by referencing the claim number, date of service and patient; then, briefly describe the particulars of the service in question.
• Use the insurer's own language if possible. For example, to appeal a claim denied because the insurance company claims the treatment was experimental, quote from the insurer's own marketing materials where it declares it seeks to provide the best medical care for its beneficiaries.
• When the insurer questions the necessity or separate payment for a distinct service, the physician should type or dictate a paragraph or two about the benefits of the service to the patient. Seek objective evidence to support your case from your specialty society and medical literature.
• Look to see if Medicare or Medicaid pays for the service; if they do, you can argue that even the government has determined that payment is appropriate.
• Copy and attach sections that support your case from coding manuals, including past issues of the American Medical Association (AMA) CPT Coding Assistant, a periodical that the AMA publishes to clarify CPT codes. (See http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/cpt.shtml)
• For appeals that concern clinical issues (for example, medical necessity), send the appeal to the medical director of the insurance company.
• Look at the class action settlements between several large physician organizations and a number of national insurance companies; review those settlements to see if anything in there can support your position. See http://www.hmosettlements.com/for an up-to-date compilation of the settlements, as well as a list of pending lawsuits.
6. Confirm receipt. Don’t just send the appeal and hope for the best. Review your submission online, or call the insurance company to confirm that they received your appeal, noting the name of the operator, extension number, date and time. Place a tickler in your practice management system or Microsoft Outlook to follow up in 30 days.
7. Set boundaries. Although it might make you feel better to fight for every dollar, it doesn’t pay to prepare a third-level appeal of a $2.41 service, particularly if you only perform it once a year. Establish protocols for dollar thresholds that you’ll appeal only once, twice, etc.
8. Don’t go overboard. Avoid fighting for a claim that should have never been submitted in the first place, such as an undocumented service. Your physician may have provided the service and feels there should be some way to get paid, but – as the saying goes – if it wasn't documented, it wasn't done.
9. Carbon copy stakeholders. Your appeal to reverse a denial is a matter between you and the insurance company, but sometimes pulling in other key stakeholders helps. Your first, and most important, advocate is the patient. Although patients may never be held responsible for payment if a denial is ultimately upheld, news of payment disputes certainly get their attention. And the patient’s attention is just want you want. Prompting the patient to contact the insurance company directly to encourage payment doesn’t guarantee payment, but it certainly helps.
10. Develop supportive language in your contract. Your contract establishes the relationship between you and the insurance company. Even though the insurer is the party that typically presents the contract to physicians for their signature, it’s every bit as much your physician's contract as it is the insurer's. Proactively negotiate the inclusion of language that supports your efforts to appeal claims. If you’re frustrated by the appeals process itself or if you keep running into certain problems, such as unfair bundling denials, seek to include clearer definitions of these processes in the contract.
11. Compile appeals. Appealing claims one-by-one may get the results you need, but it is laborious. If you’ve seen the same service denied for the same reason multiple times – or your insurer hasn’t paid in a timely manner, according to your state's prompt payment law – compile your appeals and present them together for reconsideration.
12. Maintain a hassle folder for each insurance company. Keep a record of denied claims – by dollar and type. Measure and compare the data on a quarterly basis. If you negotiated a good reimbursement rate with an insurer, but all of your claims get denied, the “good” rate is meaningless. It pays to maintain a record of reimbursements and denials in order to effectively review your contract for its strategic contribution to the practice’s bottom line.
Preventing denied claims is a key skill of successful billers. But getting some denials will always be a fact of life in today’s complicated physician payment system. Appealing denials is your right: it pays to exercise it.