The business of medicine gets more and more complicated and practices are tasked with the challenge of doing more with fewer resources. According to recent estimates, the gross charges denied by payers has grown 15 to 20% of all claims submitted. The average cost to rework a claim is about $25.00 per claim according to (Healthcare Financial Management Association). As many as 65% of claims never get worked resulting in an estimated 3% loss of net revenue. Denial management is more critical than ever as it continues to contribute to lost revenue.
What is a medical insurance appeal?
Denial of a claim is the refusal of an insurance company or carrier to honor a request to pay for a health care service obtained from a health care professional. A medical insurance claim denial might result in partial or fully denied payment for the services that were submitted by the physician. In order to collect payment, the claim may need to be appealed. Appeals have specific rules that must be followed in order to be considered.
What does an appeals process look like?
The appeals process varies by insurance company and each has a proprietary way to start the appeals process. It is important to fully understand the timeframe allowed, the necessary documents and the proper submission address which often varies. The appeal process is a time consuming effort so it is extremely important to be organized and respond as quickly as possible. Medical practice personnel should become familiar with the details of each individual payer in order to best manage the appeal process. There could be propriatary forms, timely filing constraints and different levels of appeals.
Medicare requires that you send in a redetermination form for a first level appeal. If the denial is upheld, there is a second level appeal form called a reconsideration form. Each step in this process is mailed to a different location.
Timely Filing varies by insurance payer. For Medicare, an appeal must be filed within 120 days of receipt of the Medicare remittance. For a second level appeal, the person filing has 180 days from the date of receipt of the redetermination decision to file a reconsideration request. Each step has a unique form that should be filled out completely and signed by the person sending it along with the medical records if you trying to support medical necessity.
Other insurance companies may have their own form or may require you to send an appeal letter stating the reasons for dispute along with any supporting documentation that you have to help overturn their original decision. The timely filing limit is also different with each insurance company.
Most companies will allow you to send a first and second level appeal but there are some that will only give you a first level so it’s important that you send them all the supporting documentation that you have initially. Occasionally, a denial can be overturned as a result of calling the insurance company. When that does not work, you should investigate if the appeal and documentation can be faxed in order to expedite the process.
What are the benefits to a professionally managed appeals process?
A full-service revenue cycle management company will include denial management as part of the collections follow-up. Denials management requires a substantial amount of resources. When managed professionally, practices will experience an improvement in revenue collection as a result of cleaner claims submission that results in fewer denials. Another advantage is the passing of tedious task to the dedicated focus of an experienced billing & collection representative. Denial management is a time sensitive and time consuming effort that requires a dedicated and focused effort to manage.
Looking for more information about managing denials and professional services?