As a physician, your primary goal is to ensure you are paid for the services you provide. Outsourcing medical billing is an effective way to achieve this, but claim denials can occur due to various reasons. In fact, recent research from the Commonwealth Fund revealed that in 2023, 17% of U.S. adults had their insurance claims denied for care recommended by their physician. Denials are common in both commercial and government insurance plans. Shockingly, up to 40% of those who did not appeal their denial said they were unsure who to contact for assistance.
Physician practices play a key role in helping patients navigate denied claims to ensure they receive the benefits they are entitled to. A healthcare receivables management company can support this process by efficiently managing denied claim appeals. They identify the reasons for the denial, collect the required documentation, and submit appeals on behalf of the practice or patient. This approach not only reduces administrative burdens but also improves the chances of a successful resolution and timely claim approval.
Let’s explore how physician practices can effectively navigate the insurance claim denial appeal process.
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Appealing a Medical Insurance Claim – Tips for Success
Claims are recoverable. A Time article titled “What to Do When Health Insurance Denies Care You Really Need” quoted Wendell Potter, a former Cigna executive as saying, “Never take ‘no’ as a final answer, ever”. Here are the recommended actions for handling and appealing denied claims:
Identify the Reason for the Denial
Before submitting an appeal, the reason for the denial is identified by examining the denial letter from the insurance plan.
Common claim denial causes include:
- Registration/eligibility issues
- Prior authorization/precertification
- Medical necessity
- Service not covered
- Out-of-network provider
- Medical documentation requests
- Upcoding and unbundling
- Coding error
- Avoidable care
- Missing or invalid claim data
- Untimely filing
Claim Adjustment Reason Codes (CARCs) and Remittance Advice Remark Codes (RARCs) are used to explain why a claim was denied or paid differently than billed. Some examples of claim denial reason codes are:
- CO-4: The procedure code is inconsistent with the modifier used
- CO-15: The authorization number is missing, invalid, or doesn’t apply to the services or provider
- CO-45: Charges exceed the fee schedule maximum
- CO-50: Non-covered services that aren’t considered a medical necessity
- CO-167: The diagnosis(es) is(are) not covered
- CO-B16: Payment adjusted because the new patient qualifications were not met
Knowing the reason determines the next steps. If the issue is fairly straightforward such as a missing ID or date on a claim or even documentation, it can be re-submitted with additional paperwork or necessary information.
Understand the Insurer’s Appeals Process
When submitting an appeal, it’s essential to be well-versed in the insurance company’s appeals process. Each carrier may have specific policies and understanding them is essential for responding effectively to their actions. Maintain up-to-date information on claims adjudication and appeal procedures for every carrier your practice works with. Many carriers provide this information on their websites. Staying informed helps manage appeals efficiently and ensures timely reimbursements.
Be aware of exceptions to insurance payer policies, especially for diagnostic procedures like X-rays and lab tests that reveal abnormal findings. Some clinical guidelines apply only to specific age groups, such as adults but not pediatric patients. Use these exceptions and provisions when applicable to maximize claim approvals. Don’t overlook any details.
Review All Claim Notifications Carefully
All communications from the payer should be reviewed, including remittance advice and explanation of benefits (EOB). These notifications indicate whether the claim was fully paid, delayed, partially paid, or denied. If the claim is marked as “unclean,” follow the payer’s instructions for resubmission, ensuring all missing or corrected information is included. For partially paid or denied claims, the notification will specify the reasons and outline the required procedures and documentation needed to resubmit the claim or file an appeal.
Follow Proper Appeal Procedures
The procedure for filing an appeal is just as important as the appeal’s content. Insurance providers typically require a specific form to be completed. Ensure the correct form is used and filled out accurately. For instance, the Centers for Medicare and Medicaid Services (CMS) has a designated form for appealing Medicare claim denials, known as the Medicare Redetermination Request Form. Adhering to these protocols significantly increases the chances of a successful appeal.
Make sure the appeals letter explains the denial and provide supporting evidence, such as medical guidelines or policy provisions. Keep the letter clear and concise, and use bullet points to make it easier to read.
Build a Compelling Case for Medical Necessity
If a claim is denied due to lack of medical necessity, it’s crucial to build a clear, compelling case explaining why the treatment, procedure, or medication is essential for the patient. Support the appeal with relevant medical records and clinical notes. Compare the insurer’s criteria with national standards of care for the patient’s condition. If the insurer’s requirements are more restrictive than accepted medical guidelines, include that information in the appeal letter to strengthen the case (Time).
Resubmit Claims Promptly
Submit your appeal by the deadline. Submitting and resubmitting claims within the specified timeframe set by the insurance company or state regulations is crucial. Missing these deadlines may result in the claim being processed based solely on the initial information provided. Moreover, requests for reconsideration or appeals could be denied if submitted late, reducing the chances of a successful resolution.
Reference the Insurance EOB or Claim Number
Include the insurance EOB or claim number with every appeal to ensure it is correctly linked to the original claim. Without this information, appeals can be lost or mistakenly processed as duplicates, as insurers handle thousands of claims daily and are unlikely to make the connection on their own.
Keep Detailed Records
Maintain complete records of disputed claims, including appeal documentation, carrier communications, dates, and representative contact details. Note reasons for claim denials, partial payments, or delays, along with follow-up actions and outcomes. Organized record-keeping ensures effective follow-up, reduces payment delays, and streamlines claims management.
Be Persistent
Be persistent. You may need to resubmit the claim or file an appeal multiple times to overturn a denial. Persistence shows the insurance company that your practice is committed to resolving the issue and securing proper payment. Check the status of appeals within a reasonable timeframe after submitting it, usually within 30 days of the initial submission.
Submitting an appeal can be complex, involving multiple forms and insurer communications. By managing appeals efficiently, practices can resolve misunderstandings, correct errors, and increase the likelihood of approval. This proactive approach boosts patient satisfaction while reducing their financial burden.
Leverage Expert Support
Each rejected, denied, or underpaid claim represents lost revenue for your practice. According to industry reports, the average cost to rework a claim exceeds $25, with appeal costs climbing over $100. Studies estimate that up to two-thirds of denied claims are recoverable (Physicians Practice). So, the focus should be on preventing denials.
Partnering with a healthcare revenue cycle management services expert can ensure valuable support for billing and denial management. These specialists analyze denial trends, evaluate claims management practices, and compare your processes to industry best practices. Based on their findings, they can recommend a tailored denial prevention program with corrective measures to enhance your financial performance.
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