Your main goal is simple: you get your practice paid. But simple does not equal easy, especially when it comes to appealing denied claims. Reimbursement becomes a messy, convoluted web of tasks made up of multistep to-do items. But that doesn't mean your claims are unrecoverable, right?
The key to recapturing lost revenue is understanding the most effective types of appeals in medical billing. With that knowledge, you can find the right solutions to protect your bottom line. Here’s everything you need to know, including how tools like Revenue Diagnostics from Rivet Health can transform your workflow.
Approximately 49.7% of denied claims are caused by front-end problems, per the Change Healthcare 2020 Denials Index. Change Healthcare found these front-end issues as the largest ones:
Denials can impact your patients’ outcomes and your practice’s cash flow. But before you can fine-tune the appeal process in medical billing, you need to make sure you aren’t wasting time and resources chasing the wrong denials. To do that, set up a process to classify denials into one of these two categories:
Though most denials come from front-end problems, Change Healthcare found these additional reasons that denials occur:
The aforementioned list isn’t an exhaustive list; however, it shows a variety of denial causes you probably have in your denied claims list right now. Some of these issues are unrecoverable, yet avoidable. To learn more information about how to avoid denials, read our past article linked here.
Fortunately, many denials are recoverable, but the denial process in medical billing tends to be a lot of work. Below, we’ll dive into the appeals process and how Rivet’s denials management tools will change the way you work appeals.
We’ve talked about possible denial reasons, but it’s likely your practice doesn’t have the resources or time to file every appeal. Furthermore, some denials are hard denials, meaning the claim cannot be recovered, and you will not receive any payment from the insurance company. You’ll need to make sure a denial is worth your time and effort before jumping in.
With that in mind, thoroughly review denial codes and payer guidelines before you devote time and energy to the medical billing appeals process. Payer portals should provide detailed information about each denial, such as what’s missing or which codes were adjusted.
Rivet’s Denials Management software helps you organize your claims data in an easy-to-use format. Through AI, Rivet learns how to send better claims to specific insurers to avoid dreaded automated denials and edit future claims. You’ll see line item claim details, adjustment codes and diagnosis codes all in one place so you can easily solve problems.
To prevent denials, see our ebook, “Unlock a Denials Prevention Engine.”
Once you’ve decided to appeal a denied claim, you’ll need to gather anything that could be useful in obtaining payment, such as the following:
A letter of appeal or explanation: This is a cover letter or summary of sorts that explains to the payer why you’re appealing the claim and how your documentation supports those reasons. This is often the most tedious part of the process.
For example language to send to insurance companies, see our free ebook, “RCM’s Worst Nightmare.”
Supporting documentation: This includes any progress notes, patient labs, or other formal medical record documentation from the health insurance company or medical committees that support your claim. Think of it as your evidence in a trial—it’s got to convince the jury of your case.
Insurance EOB or claim number: This seems like a no-brainer, but you’ll need it. Oftentimes, an appeal gets lost or processed as a duplicate because the insurance company can’t connect the appeal to the original claim. (Remember, insurance companies receive thousands of claims every day, so they aren’t going to make the connection for you.)
Follow the specific insurance’s appeals process: Almost all insurance companies have a specific way they accept an appeal. It’s not worth your time working an appeal if no one even looks at it. They might have a specific form you’ll need to fill out.
You may also need to submit additional documentation. Payers often request invoices, patient statements, or corrected claims, for example.
With Denials Management workflow tools, you can automate forms and data fields in Rivet so you can reduce errors and manual data entry. Keep a continuous record of instructions, payer policies and payer contact info by payer and denial type.
You’ll most likely get the mailing and any electronic sending addresses from the company’s website when you get your insurance-specific forms. You may see it on the Explanation of Benefits (EOB), but be sure that is actually the correct address for sending appeal letters. You don’t want to do all the necessary paperwork to have nothing come of it.
An electronic appeal process in medical billing is faster and more efficient than physical documents. The platform must be HIPAA-compliant to protect patient data. Appeal templates can streamline this step and standardize the format for common denial time frames.
You can also save useful information in Rivet for easy reference when working an appeal with the same payer. With Rivet, you’ll promote consistency and save time.
After you file an appeal, diligently track its status. Most payers respond within 30 to 60 days, but response times vary. We recommend following up every 10 to 14 business days.
Document every interaction, including when you reached out, whom you spoke to, and how they responded. Implement a tracking system, such as a spreadsheet or RCM software, to monitor appeal statuses and deadlines.
Once you’ve received an answer to your appeal, you can do one of two things:
Each insurance provider has a provider relations rep who specializes in communication between healthcare providers and the insurance company. If all other appeal attempts fail, you can reach out to the provider relations rep to see if you can get your claim paid.
If your claim status requires further action, you may report the health insurance company to your state medical association. They will help you file a formal complaint and possibly launch an investigation into the insurance provider’s claims processing.
The most effective appeals process in medical billing depends on the type of denial you are dealing with and the reason the claim was kicked back. During your review of denied claims, you should categorize the denials by type in order to determine the best appeals strategy.
There are three main types of appeals in medical billing.
A first-level appeal, also known as a “claims reconsideration,” is an initial request for a review of the denied claim. This appeals process is typically used for soft denials due to missing documentation or minor coding errors. For example, if you need to resubmit a claim with a corrected ICD-10 code, you use a first-level appeal.
First-level appeals have the highest rate of success. You can usually recapture lost revenue by simply changing the codes and resubmitting the claim to the payer. However, you should have a robust process for identifying and resubmitting these claims within the set deadline. Otherwise, you’ll miss out on potential revenue.
If the first appeal fails, you’ll turn to this more formal process, which involves detailed documentation and may go to the payer’s appeals specialist. Suppose that one of your contracted payers denies a claim on the grounds of medical necessity. In this instance, you would need to file a second-level appeal.
Here’s where knowing your payers and tracking denial trends become valuable. Unfortunately, some payers will repeatedly deny certain codes or downgrade them to codes with lower reimbursement rates. If you are aware of this behavior, you can prioritize second-level appeals accordingly.
Think about it. Why would you waste time and resources contesting second-level appeals that you know the payer is going to reclassify anyway? Instead, adjust your coding process during the appeal to promote a faster resolution and get paid sooner.
An external review process is reserved for complex denials, such as those involving urgent or lifesaving care. These appeals are sent to an independent third party for review. For example, a denied claim for an emergency procedure might qualify for external review under state or federal regulations.
The external review process can be time-consuming. However, it typically involves complex care and high-value claims. With that in mind, you need to identify and address denials that may qualify for an external review as efficiently as possible.
All of these medical billing appeals processes have a recurring theme: Visibility into your claims and denials workflows is nonnegotiable. When there’s a disconnect between claims filing and denials management, chaos ensues. Your organization will frequently miss deadlines and lose out on revenue.
Here are a few ways to win more appeals:
Are you ready to dig deeper into the what, why, and how of denials? Download our free e-book to explore the denial process in medical billing.
RCM software is a game-changer in modernizing your medical billing appeals process. With the right tools, you can automate tasks and reduce errors. Integrating your RCM platform with your EHR system ensures that data is accurately transferred and minimizes the risk of coding discrepancies.
Regardless of which types of appeals in medical billing you are dealing with, Rivet Health makes the journey easier. Our platform syncs with EHRs to streamline claim creation and track denial trends in real time. Automation tools flag approaching deadlines, while our analytics features highlight recurring denial patterns.
If you’ve worked in denials management before, you know that filing deadlines need to be tracked so that you stay on top of denied claims before you run out of time.
With Rivet, you can automate your team members’ task lists, track all of your denials to completion, and stay on top of deadlines and prevent future denials.
Want to know more about our Denials Management or other products? Visit our info page on our denials management software or schedule a demo.
