To Appeal or Not To Appeal?

An Expensive Question

Some practices deprioritize appealing claims as ‘grunt work,’  but nothing could be further from the truth when it comes to appeals.

It is estimated that more than 60% of all claims denied on the first adjudication are eventually paid when appealing claims. That’s a very high number and one that may represent potentially lost cash due to the provider.

Providers are understandably frustrated with denials and may feel that it is not worth their time to appeal the decision. However, appealing a denied claim allows the provider to resolve an issue that can often impact future claims. Seeing appeals as a bother, rather than an opportunity, can be the difference between solid cash flow and interrupted collections.

Lack of appealing claims = bigger issues

Even if the claim is for a small amount of money, those small dollars can add up to big dollars before you know it.

Additionally, if a payer denies a particular service repeatedly and no one ever appeals the decision, the payer may conclude that the service is not necessary and, when updating future policies, may consider that service optional rather than medically necessary. If, however, payers receive enough pushback from providers appealing claims, they will more than likely continue to include it in future policies.

So, is it worth it to invest time in appealing claims denials … even the small ones? Absolutely! Appeal them before the circumstances turn into bigger issues and more importantly, appeal them to preserve covered services.

Claim denials are usually related to one of three reasons:

• The claim is denied based on the lack of a benefit. An example is Medicare’s coverage of chiropractic. If an extraspinal manipulation was billed, even with proper modifiers, it would be denied because the patient doesn’t have a benefit for that service when ordered or delivered by a chiropractor.

• The claim is denied based on lack of medical necessity. An example is that the payer’s screen for a particular diagnosis is 12 visits, and this patient is now being seen for visit 20. Often the denial is automatically triggered in these instances.

• The claim is denied based on incorrect coding. An example is that S8948, laser, is not a covered service according to the medical review policy. Or a modifier is missing on the claim required for adjudication. Sometimes, these are easily handled with reprocessing.

Appeal or reprocess?

Whether you are filing a formal appeal or a quick and easily reprocessed (resubmitted) claim, know that there is a difference between the two.

An appeal is a formal action taken when a claim is not paid for clinical reasons (e.g., there was a question about the medical necessity of a procedure or treatment). Often this is related to medical necessity issues.

Reprocessing is an informal action and is necessary when a denial is for technical reasons (e.g., missing information, an incorrect ID number, wrong birthdate for primary insured, or a missing diagnosis code). Electronic and/or paper billing edits may help you avoid these types of denials.

Claims can be denied for a variety of reasons, such as:

• Missing modifiers
• Failure to prove medical necessity
• Incorrect CPT code
• Non-covered service
• Lack of pre-authorization
• Missing information on claim
• Maximum benefits reached
• Diagnosis does not support service rendered
• Documentation does not support the code billed
• Missing treatment plan

If the denial qualifies for an informal appeal (e.g., reprocessing a corrected claim), a phone call may be all that’s needed to resolve the issue. If the denial was based on a verified benefit, call the insurance provider’s customer relations department, provide the verification information and the reference number, and ask the representative to reprocess the claim accordingly. Whenever possible, handle claim denials over the phone or through online portals.

If the issue is clinical in nature or the content is complex, a formal or written appeal may be necessary. Once it’s been determined that a formal appeal is necessary, job one is to determine whether the denial is valid. Often this involves reviewing the file, the chart notes, and the particulars of the episode of care in question. Initiate the following four steps to successfully complete the process:

Investigate the issue

Once you have determined why the payer denied the claim, find out who is at fault — the provider or the payer.

For example, if there is missing information or the wrong modifier was used, the provider may be at fault. If the number of visits exceeds the coverage benefit, it may be the provider’s error. However, if the claim was submitted with the correct code and a review of the supporting documentation indicates that medical necessity exists but was denied for lack of medical necessity or supporting documentation, then the payer is likely at fault.

If it is a provider error, fix the mistake, educate staff if necessary, and resubmit the corrected claim. If it appears to be a payer mistake, start the appeal process as described below.

Review the payer’s appeal policy

All appeals are not created equal.

Medicare has a specific and unique appeals process. Other carriers may require customized appeal forms that must be attached to resubmitted claims, or they may provide online portals that allow providers to attach appeals documents electronically. Before you invest valuable time in an appeal, locate the payer’s guidelines and then follow that payer’s steps carefully.

This is an example of what the online resources for appeal may look like:

Note: Be sure you know where to send an appeal. A third-party administrator (TPA) is a person or organization that processes claims in accordance with a service contract. TPAs are neither the insurer (insurance company) nor the insured (employees or plan participants); rather, they handle plan administration including processing, adjudication of claims, record-keeping and plan maintenance. They may also be involved in the appeals process.

Gather supporting information

If you believe a claim was denied incorrectly, gather information to support the appeal. If the denial was due to a coverage determination, check the Verification Form.

For example, ask yourself:

• Did the insurance representative tell you the service was covered? Confirm that the patient should have had that benefit.
• Did you collect a name, date and reference number on the form?
• After reviewing the medical review policy for the service, was the submission in accordance with the guidelines?

If you answered yes to these questions, you can appeal the denial, stating that misinformation was provided at the time of verification.

If the denial was for lack of medical necessity or a clinical reason, your documentation must substantiate the need for care and the appeal must contain the details required to overturn the denial. If the documentation does not contain the mandatory documentation components needed to warrant an appeal, your office may have to concede the denial and write off the balance based on whether it was a contractual obligation. If your documentation clearly demonstrates medical necessity or refutes the reason for the denial, highlight this in your supporting documentation and initiate a written appeal.

If the denial was based on the coding, verify that the CPT code submitted was the correct code to accurately represent the service provided. Does the carrier have a coding policy that may have forbidden the use of that particular code? Was there a coding edit?

Do not delay

Most of us are familiar with the time limits for appealing claims — the same limits apply to appeals. Once you receive a denied claim, the clock starts ticking.

Be sure that your time management schedule always includes regular and ample time for appeals. Most denials will have the instructions for appeal and the necessary timelines in place, so take note of the date and then strive to meet the guideline.

It is worth the effort

Sadly, some practices deprioritize appealing claims as “grunt work.” Grunt work is an expression used to describe thankless and menial work. Grunt work can also refer to jobs that either lack glamour and prestige or are boring and repetitive.

With that said, nothing could be further from the truth when it comes to appeals. When a third-party payer has incorrectly withheld payment due to the practice, the energy spent is well worth it. If a practice error has resulted in less reimbursement for the practice, it deserves to be corrected and learned from to prevent the errors from happening again. Embrace the appeals process and watch as cash flow soars.

KATHY WEIDNER, MCS-P, CCPC, CCCA, better known professionally as Kathy Mills Chang, is a certified medical compliance specialist (MCS-P) and a certified chiropractic professional coder. Since 1983 she has been providing chiropractors with reimbursement and compliance training, advice and tools to improve the financial performance of their practices. She leads the largest team of certified specialists under one roof in the profession at KMC University, and is known as one of the profession’s foremost experts on Medicare and documentation. She or any of her team members can be reached at 855-TEAM-KMC or info@KMCUniversity.com.

*Published on Chiropractic Economics, Issue #3, 2022