How to Pursue an Appeal Properly for Denied Claims?

by | Jul 24, 2013 | Medical Coding News, Resources | 0 comments

Resolving medical claim denials at the right time is critical when it comes to obtaining timely and accurate reimbursement. Unresolved claims can adversely affect the cash flow of healthcare practices. The opportunity to file appeals for rejected claims is a great relief for medical service providers.

Five levels of appeals are allowed in the case of Medicare claims.

  • Re-determination of Claims with Medicare Contractor
  • Re-consideration with Qualified Independent Contractor
  • Office of Medicare Hearings and Appeals (OHMA) Claim Review
  • Medicare Appeals Council Review
  • Review under Federal Court

Healthcare entities can try each level if they disagree with the outcome of the previous level. Revoking the denials through appeal process is not an easy task. Appeals should be genuine with strong reasons to move on to the next level and argue against the rejection. Also, the appeals need to reach the relevant authority before the deadline. Hence, if an organization decides to pursue an appeal, they need a good appeal letter and an efficient appeal management system to make the most of the opportunity.

Requirements of a Good Appeal Letter

Before writing the appeal letter, it is imperative to find out the exact reason for the claim denial and include the documentation of what happened actually for denying claims, along with the clinical outcome. The aim of this documentation is to show the authority that you have followed all the required procedures. Call the payer directly and/or collect all relevant documentation so far to find out the real reason behind the denial.

Precisely, a good appeal letter requires background information about the denial, actual issue, request for Medicare-severity diagnosis-related group (MS-DRG) and detailed explanation of the request. The letter should also include all documents that support the request, such as Coding Guidelines, Coding Clinics and more. In the case of an outpatient appeal letter, it is required to include relevant CPT Assistants, Medical transmittals and Coverage determinations (both local and national).

The Right Approach to Write an Appeal Letter

The approach may differ according to the type of appeal letter. Let us see what the right approach in each case is.

Medical Necessity Appeal

Medical necessity appeal can be filed if the claim is denied due to the absence of medically necessary services. In this case, denials are focused on short stays. The right format for this appeal letter is as follows.

  • Begin with a summary of rejection and then include a paragraph which makes clear and comprehensive arguments about the relevant process of the hospital to assess the admissions for level of care decisions to provide services.
  • An appeal letter should keep the reader engaged by providing all details of the patient such as age, sex, and medical history. Talk about all the circumstances that ultimately led to the admission.
  • Scrimping on the details is not a good practice. Instead, include information such as patient’s condition at the time of diagnosis, treatment received in the emergency department, symptoms after treatment, treatment for which the patient was admitted and daily status during the stay wherever necessary.
  • Finish the story with the discharge information and details of treatments and/or services advised after discharge.
  • Once the detailing is over, add references to standards of care and/or community norms. For example, clarify whether the patient meets the guidelines laid down by hospital management. It is better to reference Medicare Benefit Policy Manual and add a paragraph about physician’s intent.
  • Finally, write a summary on how the arguments in the letter support Medicare’s definition of an inpatient.

Administrative Appeal

Administrative Appeal is filed when the claim is rejected due to non-medical or technical reasons such as not meeting deadlines, not following important guidelines and so on. The format of this appeal letter is discussed below by considering the example of a weak clinical argument as denial reason.

  • Focus the letter on the factor which acts as the basis of medical necessity determination. In the example, medical necessity determination depends on whether the services meet the requirements of Medicare’s definition of inpatient admission. Hence, the letter should focus on the intention of the physician to admit the patient as inpatient.
  • Add relevant references from Medicare Benefit Policy Manual. Medicare’s definition of inpatient can be added in the example.
  • Submit support documentation regarding the argument made in the letter. Here, the argument is that the treating physician intended that the patient needs to be admitted into hospital for inpatient services.

Coding Appeal

Coding appeal is forwarded if a claim is denied due to coding error. The appeal letter in this case should be clear and well-organized with documentation which supports the DRG (Diagnosis Related Group) billed. Thorough research on coding rules and coding updates is necessary to ensure accuracy. In addition to this, include any rules or definitions that are pertinent.

Proper Management of Appeals

An efficient appeal management system involves the following procedures.

  • Tracking and Review – Maintain a system which can track and monitor both denials and appeals so that you can ensure appeal letters are sent in a timely manner. Check the queue in that system and distinguish partial denial low-balance claims (not good to pursue for an appeal) and large balance claims. Review each appeal and decide whether it is worthwhile to pursue.
  • Prioritizing and Grouping – Assess the dollar value of claims and prioritize them to determine whether it can go through at least one round of appeal. Then, check the age of the denial, whether it belongs to clinical or non-clinical category, and the type of insurance for grouping them into similar denials. It will help to carry out the appeal writing process in batches, which is quite efficient.
  • Organizing in Proper Order – Organizing appeal letters will help to send them before the deadline. Create a template which contains pertinent information such as patient name, account number, medical record number and other details. Use a database for arranging appeal letters according to their due date so that it will be easier to select the most crucial letter.
  • Selecting an Appropriate Author – Choosing a knowledgeable person to write the appeal letter is very crucial. Consider the type of appeal before looking for an author. A person who has a strong clinical background, distinguished analytical skills and thorough knowledge in Medicare rules and regulations, and billing and legal formalities is best for writing medical necessity and administrative appeal letters. For coding appeals, a professional well versed in medical coding rules and regulations is needed. In both cases, speed is very important as the appeal letter has a deadline.

It is very difficult for a provider to pursue appeal letters as it is an arduous task which needs time and dedication. A professional medical billing company providing revenue cycle management services will be a great support in this regard.