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Practice Management Alert

Once Denied,Twice Shy? Proper Appeals Boost Pay

Published on Sun Sep 01, 2002

With Medicare rates plummeting, Medicaid falling apart, and managed care groups continuing to dominate the healthcare marketplace, billers can't afford to let good claims get denied for bad reasons.

Improper denials can be the bane of a practice's existence. They're an administrative hassle something everyone would rather put off and not think about. However, they also represent hard-earned money that isn't making it into your accounts, and experts say you should buck up and contact the carrier or insurer to obtain your rightful reimbursement.

Many managed care plans are shrinking the time frame providers have for filing claims. Beginning a few years ago, Tammy Tipton, president of Appeal Solutions, Blanchard, Okla., noticed "a really big spike in the number of 'lack of timely filing' denials."

"If you determine that you filed a denied claim properly, you should appeal with all your might," Tipton says.

Don't Take It on the Chin Act Quickly

When faced with a denial that you believe is improper, follow these steps:

  • Verify the reason for denials. Remember that there are two sides to every story, says attorney Alice Gosfield of Gosfield and Associates in Philadelphia. "It is possible that the carrier has erred" by failing to pay claims for covered services or by misinterpreting its own rules but practices "sometimes misinterpret the rules themselves," Gosfield says.
  • Make sure you're up-to-date on the Correct Coding Initiative's (CCI) edits. The CCI edits come out every three months, says Arthur Di Dio of Arent, Fox, Kinter, Plotkin and Kahn in Washington. So make sure you didn't overlook a new edit. You should also see if the insurer's coverage policy has changed, or if a local medical review policy (LMRP) has been issued, changed or revised.
  • Involve the clinician who performed the service in question while you do all of this homework. Tom Bouvia of Medical Management Resources Inc., in East Syracuse, N.Y., says that working closely with physicians is integral to the process.

    Bouvia says that in some states you can research online the Medicare carrier's bulletins about certain codes. If you find a coverage bulletin about the code in question, and the bulletin says you can bill for that code only if X, Y and Z apply, show this to your doctor. Maybe the physician will realize that only X and Y applied to the case for which he billed, and therefore he was wrong to bill it.

    Or, the physician may be able to help you better understand the bulletin, pointing out why he was right to bill and why the carrier was wrong to deny.

  • File an appeal if you still can't understand why the claim was denied, Di Dio recommends. Even if you don't want to go through the trouble of following through on the appeal, you should at least file it as a way of covering your back. Appeals have strict time limits, Di Dio says, and if you wait too long you could lose your appeals rights.

    Whether it's a Medicare or private insurance case, there will likely be some mechanism to file an appeal, Gosfield says. Make sure you find out what the appeals process is and follow it carefully.

    Remember that you can't sue the carrier or insurer until you have exhausted your administrative options, Gosfield says. That is, if you file a lawsuit before trudging through the internal appeals process, the court is likely to dismiss the case.

  • Call the carrier after you file the appeal. Follow-up is an essential component of a successful appeals process, Tipton says.

    "We all know it's a nightmare to try to get through and get hold of someone who's knowledgeable," Di Dio says, "but that's a place to start."

    Anytime you have a conversation with someone from the carrier and he or she says something remotely interesting or important to your case, Di Dio insists that you follow up that telephone call with a letter describing what the understanding was. Di Dio realizes that practices are already buried in paperwork, but it's critical that you have an administrative record in case things don't get resolved quickly and in your favor.
  • Don't get into an argument about medical necessity or some other issue, Di Dio warns. Typically, the person you're going to speak with at the carrier does not have the authority to reverse the claims. Getting into an argument is fruitless and a waste of everyone's time, he says.

    "You're probably not going to get the money back at this point," Di Dio says, so don't go in with high expectations. The purpose of the phone call is to learn why they're denying, and to tell them you think they're doing it improperly.
  • Send a letter pleading your case if, after the talk, you think it's clear that the carrier is wrong, Di Dio says. Explain why its reasoning was incorrect, note that you'd like to avoid going through an actual appeal since it's laborious for them and for you, and ask for the money you are owed.

    "Unfortunately," he adds, "the chances of that being successful are not high, and at the end of the day it's likely that you're going to have to file a formal appeal with the carrier and go through the process."

  • Go through with the appeal once you've exhausted all your other options, Di Dio says. Sometimes providers submit information that isn't helpful or gives the carrier other reasons to find fault with the providers' claims, he explains. A lawyer can help prevent this.

    Call your state insurance commission for advice if you're dealing with a private insurer. These agencies usually have some provisions and guidelines for enrollees and providers, telling you what to do when you're on the wrong end of an incorrect denial.

  • Get an attorney if you feel you've discovered a widespread problem as opposed to an individual incorrect claim. "Sometimes it is useful to get a knowledgeable health lawyer to interact on the policy side with the payer and say, 'You guys are doing this wrong,' " Gosfield says. The lawyer might be able to resolve things informally, without having to do the appeal.
  • Work your way up the ladder. Eventually, Di Dio says, you can get a carrier fair hearing. If it doesn't rule in your favor, you can further appeal to an administrative law judge (ALJ), who has no relation to the carriers. "At that level, if you've got a good case, you are almost certain to get relief," Di Dio says.

    Unfortunately, this can be a time-consuming process; months can pass before the carrier fair hearing, and again before the ALJ. Gosfield reports that CMS was supposed to institute quicker time lines this year in an effort to speed up appeals, but they've been dragging their feet, claiming that they can't handle the volume.

    Because of all the time and effort, some small practices don't have the resources to get to the ALJ, or they decide that the claims aren't worth enough to keep fighting, Di Dio says. But if you can afford it, and you're fighting over multiple claims that were denied for the same reason, you should press on.

    "The bottom line is, you can successfully appeal denials," Di Dio says. $ $ $

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