Pathology/Lab Coding Alert

Learning patterns in your lab could prevent future problems.

No one likes filing appeals for claims denials, but you can turn lemons into lemonade if you use the experience to learn from prior mistakes and enhance your lab’s profitability.

Background: Denials have been steadily on the rise since 2016, according to Holly Ridge, BSN, RN, CPC, CPMA, manager of medical necessity and authorization denials for Duke Health in Durham, North Carolina.

But even with the average appeals success rate of about 40 to 45 percent, correcting denials can translate to a substantial return on investment (ROI) depending on the services your team is appealing, according to Ridge.

Take a peek at these five tried-and-tested tips for fine-tuning your appeals process.

Tip 1: Show Medical Necessity

A provider must show the medical necessity in the documentation and coding to receive reimbursement for the services performed. When a denial comes across your desk, you should review the claim to ensure that the diagnosis codes assigned show medical necessity for the procedures.

Remember: If the error is a simple matter, such as using a truncated diagnosis code when the record provides adequate medical information for a complete code, you can make that change yourself. However, some medical necessity denials will require additional information from the provider before you can file an appeal.

Tip 2: Create Appeals Templates

“I very strongly recommend having templates … to ease [your] workload,” Ridge said. By having templates available, your staff will be able to plug the necessary information into the appropriate places and ensure each appeal is formatted similarly.

Examples of templates for different types of denials include:

• Authorization denials
• Medicare denials
• Commercial payer denials

“Templates look cleaner, more organized, and can look more professional. Templates can also help provide content reminders to staff as they write their appeals,” Ridge added.

Tip 3: Strengthen Appeal With Resources

Before submitting your appeal, you’ll need to defend your reasoning for reimbursement. “You really want to pull in any argument you can find that supports the … service … rendered,” Ridge stated.

Types of resources to use in your appeal with examples include:

• Payer policies: Medicare National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs), commercial payer policies, Medicare Advantage policies;
• State and federal regulations: Affordable Care Act (ACA), state definition of medical necessity, Emergency Medical Treatment and Active Labor Act (EMTALA), Prudent Layperson Standard, applicable state laws; or
• Miscellaneous: Society guidelines/medical literature, National Correct Coding Initiative (NCCI) guidelines, peer-reviewed journals, professional organizations such as the College of American Pathologists and American Association of Clinical Pathology.

As you compile the different resources available to back up your appeal, you may need to consider the various costs of information. Some nationally recognized criteria may require a subscription fee, but medical literature and medical society guidelines could be available free of charge.

Tip 4: Know Appeal Windows

When a claim is denied, you’ll have a certain timeframe in which you can appeal the denial. This appeal window may be between 60 and 180 days, or it could be as short as 30 days.

The appeal window timeframe varies by payer, so it’s crucial to examine the information you receive with the denial as well as the individual payer’s preferences or your contract terms.

Work queues may allow you to use a type of scoring to prioritize payers with a short appeal window. However, if you work manually, you’ll want to educate your employees on which payers have shorter appeal windows, so your staff doesn’t miss the deadline.

Tip 5: Know the Why of Denial

One of the easiest ways to reduce your denials is by preventing them from the start. This can be done by analyzing your claims data to find denials that could have been avoided and prevented by making minor changes before the claims were submitted.

For instance: A common problem is a timely filing denial, which can happen when you file to the wrong payer, according Jennifer Swindle, RHIT, CCS, CCS-P, CDIP, CPC, CIC, CPMA, CFPC, CEMC, AAPC Fellow, in a presentation titled “Top Denials and how to work them effectively and prevent them in the future” at AAPC’s 2023 virtual REVCON.

Data: Your analysis of denials could show which types of appeals were successful and which denied services payers approved after a successful appeal. In those instances, you should continue to appeal those denials.

Plus, by analyzing your denials, you can focus on what to prioritize during appeals, as well as what improvements your practice can make on the front end through education, proper coding, and documentation to reduce the number of denials you receive.