Spending the time and resources to appeal denied claims is crucial for any physician practice. Not only can appeals potentially help physicians recoup money, but they can also divert auditors from honing in on problematic claims.
If an auditor identifies a pattern of denied claims—and a practice can’t show that it’s made an effort to appeal those claims—it will appear as though physicians and their staff members aren’t even aware of potential compliance issues and/or patterns of incorrect billing let alone that they’re doing anything to rectify the errors.
However, how does a practice improve its medical billing appeals process? Are there ways to enhance efficiency and increase the likelihood that claims will eventually be paid?
There are certainly ways in which practices can be more efficient when appealing denied claims, Leola Burke, MHSA, CCS, independent HIM consultant in Jacksonville, FL. Burke provides seven tips to get started.
1. Devise a strategy for what you’ll appeal. Most practices don’t have the ability or resources to appeal every denied claim that comes through the door, says Burke. That’s why it’s important to develop an appeals strategy that ensures return on investment. Practices should take into consideration the dollar amount and type of payer for each denied claim. For example, many practices choose to focus on high-dollar denials only. Other practices may approach Medicare and Medicaid denials with caution, as these payers’ appeal processes may be more onerous than others, she says.
2. Track and categorize denials. It’s important to categorize each denial by type/reason. Not only does this help identify patterns to address going forward, but it can also help streamline the appeals process, says Burke. Practices should develop and document the way in which it will handle each type of denial, including any payer-specific requirements, she adds.
3. Draft a strong appeal letter. Practices may be able to use a standard/template letter for some types of denials, such as those related to use of an invalid code, incorrect subscriber name, or incorrect modifier. However, other types of denials (e.g., those related to medical necessity) require a customized appeal letter. Burke says standard appeal letters must include important details, such as the type of services rendered and the date of service, in order for payers to be able to process the information. If these details are missing, the appeal process is invariably prolonged, which creates more work for staff members at the practice. Also be sure to quote industry guidelines, such as the CPT guidelines or CMS guidelines, as well as the payer’s own reimbursement guidelines in your appeal letter.
4. Only include relevant documentation. Any appeal should only include documentation that’s relevant to the particular claim in question. Including too much information is not only time-consuming to compile, but it could also leave practices open to potential HIPAA violations, says Burke.
5. Employ a physician or professional reviewer. This individual—who typically has experience with coding, billing, HIM, or utilization review—can oversee and manage the appeals process, including contacting payers directly, says Burke. A physician reviewer should possess a clinical background; however, he or she doesn’t need to be a clinician, she adds.
6. Open the lines of communication with payers. If practices don’t already have a formal list of contact information for each payer, they should definitely create one. Burke says the list should include each payer’s name, address for appeals, and the individual responsible at the payer for addressing questions related to appeals. Be sure to identify individuals whose title is either denial manager or denial coordinator—not a representative from accounts receivable, she adds.
7. Get organized. In addition to creating list with contact information for each payer, it’s also helpful to create a spreadsheet that includes information about each appeal, such as:
- Date the appeal was sent
- Payer to which the appeal was sent
- Timely filing requirements for that payer
Also consider mapping out the stages of your appeals process, including:
- Stage 1: Contact payer by phone. Ask questions for clarification.
- Stage 2: Request a full and fair review. Contact state agencies, such as the Department of Insurance, Office of Ombudsman, if necessary.
- Stage 3: Consider legal action.
Burke says practices should obtain copies of each payer’s medical policy and maintain a list of routine payer-specific denials based on those policies. This helps ensure that staff members don’t appeal denials unnecessarily.
Lisa A. Eramo is a freelance writer and editor specializing in medical coding, health information management, and other healthcare regulatory topics. Visit her website at http://lisaeramo.wordpress.com/. Lisa wrote most recently for Getting Paid on Three Simple Tips for Managing Denials and Prevent Denials with More Accurate Medical Coding. Lisa has also written on Understanding RVUs: Ensure Accurate Reimbursement for the E/M Services You Provide.
You can learn more about improving your appeals success in our upcoming webinar, “Effective Appeals in Medical Billing: Breaking Through the Barricade to Get Paid.” Register now to learn about this important topic with expert speaker Elizabeth W. Woodcock, MBA, FACMPE, CPC.