Appeal Claims Strategically to Capture Revenue You Deserve
Let under-utilized appeals systems work for your practice.
By Heather M. Shand, CMAA, CBCS, CMB
Sometimes, even if you do everything right, you may end up with denied claims. Rather than throw up your hands and walk away, you should appeal. Yes, it will mean extra work, but the results are worth it: Most of the offices I’ve worked with have increased their revenue by at least 30 percent through strategic appeals. Here are seven steps to get you started.
1. Investigate Every Denial
If the insurer denies a claim, you must find out why and follow up to correct problems or collect payment if the denial is in error. Double-check everything about the claim to be sure you have grounds for appeal. Do not just re-file an unamended claim, hoping for payment the second time around.
For instance, if you are coding a surgery, review the “body” of the operative report to be sure all listed procedures actually were performed. Check modifier use. Maybe you missed a necessary modifier 25 Significant, separately identifiable evaluation and management service by the same physician on the same day of the procedure or other service. or 59 Distinct procedural service? If the insurer denies the claim for medical necessity, check to be sure the service was documented appropriately. Regardless of what the doctor does or how valid the service, you are sure to get a denial if the details are not documented sufficiently to support the claim.
If the insurer’s denial is unwarranted, or you are able to legitimately amend the claim to gain payment, it’s time to roll up your sleeves and ready yourself for an appeal.
2. Know Your Payers’ Appeal Process
Be sure you understand your rights to appeal. Most fully-funded plans have a designated external appeals process. Appeals may be more difficult with self-funded plans; you may wish to seek the advice of an attorney. Determining if plans are self funded or fully funded will help you prepare for appeals before you have to pursue them.
Know the type of problems and issues your state’s external appeal programs address, and whether appeal programs other than the state’s external appeal program and the insurer’s internal appeal programs are available to you.
3. Explain Yourself, Then Mark Your Calendar
Prepare a letter to the payer that explains exactly why you are appealing. If you’re unable to state in straightforward terms why you deserve payment, don’t expect to get it.
Be sure to submit appeals in the allowable time frame. This usually is 180 days. The time may be less if you are contracted. If you are contracted, review your rights; you may have given up your appeal right by being in network.
4. Send Appeals Certified
When submitting an internal appeal, send it via certified mail. You need to track that the insurer received the appeal. If you can’t track it, you have no proof it was ever sent.
If you did your homework, you know exactly how long the insurer has to respond to your appeal. If you do not have a response by the allowed time, file a complaint with your state insurance department. The state may ask for proof you sent the appeal (which is where your certified mail receipt comes in).
5. Be Wary of Internal Appeals
The insurer is likely to first pursue an internal appeals process. Some insurance companies require two internal appeals, while others require only one internal appeal.
Before you pursue an internal appeal, make sure it is mandatory. If it isn’t, and you choose to file internally with the insurer, one of two things could happen that are not to your benefit:
- The insurance company sends your appeal to an outside vendor for review. Such reviews are supposed to be independent, but often are not. Appeal decisions of this type can be binding, or can be used against you in later appeals.
- While you are pursuing an optional appeal, you may be missing out on your time to submit to the state. Most external appeal to the state must be sent within a certain time frame from your final adverse appeal determination letter. If you miss a deadline, you will lose your right to appeal.
Bottom line: Only agree to mandatory internal appeals. Do not accept optional appeals.
6. Direct External Appeals Appropriately
If you exhaust the internal appeals process without results, you must decide where external appeals need to be sent. For example, New Jersey has two appeal systems: one for experimental/medical necessity and another for incorrect payments. You also need to find out what your state requires you to send to them to process an external appeal.
For information regarding your state external appeals, go to your states’ departments of banking and insurance websites (or, call them). Most states require you to complete a form, and some states charge fees of $25-$250. If the appeal is in your favor, they usually return the money.
Note: There are avenues to collect incorrect payments/underpayments. You can use Maximus if your state has that program. Most states also have a complaint department you can use for these types of issues, which are outside of the normal appeal systems.
7. Be Strategic
Before pursuing an appeal, assess the amount of the claim and determine if it is worth the fees. Ask yourself: Does the amount of the claim warrant the fees you might lose? For instance, if the claim is $25, you most likely won’t risk $100 in fees to submit it. Keep in mind the insurance company also has to pay for external appeals, so this can be a bargaining chip.
Appeal systems are underutilized. The appeals systems can work for your practice and can increase your revenue. You will have to put time into this process, but the rewards are great. Keep in mind that all external appeals are paper reviews, not oral reviews. You need to make sure you are articulating your argument in an orderly, rational, and reasoned manner. If you have documented correctly and can articulate your agreement on paper, there is no reason why you cannot capture your lost revenue.
Know the Medicare Appeals Process
After an initial claim determination, providers, participating physicians, and other suppliers have the right to appeal, which may progress through as many as five levels. All appeal requests must be made in writing and must contain specific information (such as beneficiary name, dates of service, and other details), as detailed in the Centers for Medicare & Medicaid Services (CMS) publication “The Medicare Appeals Process: Five Levels to Protect Providers, Physicians, and Other Suppliers.”
First Level: Redetermination
A redetermination is an examination of a claim made by fiscal intermediary (FI), carrier, or Medicare administrative contractor (MAC) personnel; these are not the same people who made the initial determination. The appellant (the person filing the appeal) has 120 days from the date of receipt of the initial claim determination to file an appeal. No monetary threshold is applied to first-level appeals. The FI has 60 days from the date of receipt to issue a redetermination. If a provider disagrees with the FI’s redetermination the provider may seek the second level of appeal.
Second Level: Reconsideration by a Qualified Independent Contractor
Second-level appeals, or reconsiderations, are made to a qualified independent contractor (QIC). No monetary threshold is applied to second-level appeals. The provider must file reconsiderations within 180 days of receipt of the FI’s redetermination.
All supporting documentation, such as the initial demand letter and any evidence supporting the provider’s claim and the FI’s redetermination should be submitted with the reconsideration request. Any documentation not submitted prior to the issuance of the reconsideration decision may be excluded from subsequent levels of appeal. Additional evidence or documentation may be admitted only in subsequent levels of appeal upon a showing of “good cause.” Where the appeal is a matter of medical necessity, a QIC is required to have an independent panel of physicians or other appropriate health care professionals review the claim.
The QIC has 60 days from the date of receipt to issue reconsideration. If a provider disagrees with the results of the QIC’s reconsideration, the provider may seek the third level of appeal. If the QIC does not finish its reconsideration during the 60-day time frame, the provider has the option to accelerate to the next level of appeal by filing directly with the administrative law judge (ALJ).
Third Level: Administrative Law Judge Hearing
ALJ hearings are available if the amount in controversy totals at least $130. A request for an ALJ hearing must be filed within 60 days after receipt of the QIC reconsideration decision. The request also must be forwarded to the individuals who participated in the QIC panel.
Specific reasons why the defense disagrees with the level 1 and 2 findings, cogent arguments, and expert witness testimony at this level can be helpful because the ALJ will often seek clarification from the expert why the provider documented a certain way, or may ask the expert to explain why the defense disagrees with previous appeals.
ALJ hearing decisions must be issued within 90 days after receipt of the hearing request. If the ALJ hearing decision is not issued within the applicable time frame, the provider may request to the ALJ that their approval move forward to the fourth level of appeal. If a provider disagrees with the result of the ALJ hearing, the provider may seek the fourth level of appeal.
Fourth Level: Medicare Appeals Council Review
Fourth level appeals are made to the Medicare Appeals Council. There is no monetary threshold, although all claims must be at least $130.
A request for a Medicare Appeals Council review must be filed within 60 days of receipt of the ALJ hearing decision. A Medicare Appeals Council decision must be issued within 90 days of receipt of the request for review. If a Medicare Appeals Council decision is not issued within the applicable time frame, a provider may request for their appeal to move forward to the fifth level of appeal. If a provider disagrees with the results of the Medicare Appeals Council, the provider may seek the fifth level of appeal.
Fifth Level: Judicial Review in U.S. District Court
Judicial review in U.S. District Court is available only if the amount remaining in controversy totals at least $1,260. The request for judicial review must be filed within 60 days of receipt of the Medicare Appeals Court decision. There is no time frame for the judicial decision.