Appealing rejected claims doesn't seem worth the hassle sometimes, does it? But having a timely, organized and well-documented process not only helps you recoup costs for services, it is also vital if litigation arises. While the exact steps vary depending on whether you're an in-network provider and in which state you reside, these tips should improve your chances of turning a claims denial into payment.
Review your assignment of benefits
In general, the success of your appeal depends on how good your documents are. If a good record exists of the services and supplies used, as well as all contact made between the insurer, facility and patient, it makes appeals and litigation that much easier. Good documentation is the most important thing in an effective claims process.
One particular record warrants extra discussion: the assignment of benefits. Without this document, you lack any means to receive payment for an out-of-network insured patient. Instead, any payment you bill will be sent straight to the patient. A good assignment of benefits is broad enough to cover a spectrum of rights while also letting you take specific actions on behalf of the patient. The courts have interpreted these assignments narrowly over the years, so having a broad assignment giving you the right to bill, collect and even sue on behalf of the patient is crucial.
Failing to file a timely appeal of a denial is throwing away money and it happens more often than you would think. The timing of appeals depends on your status as an in-network or out-of-network provider. In-network providers' agreements with payers govern when an appeal should be filed. Out-of-network appeals must typically be filed within 180 days of the denial.
File appropriate documentation with your appeal
An appeal should be more than a perfunctory note saying, "I appeal this claim." Instead, you should address the reason why the claim is denied, as stated on the explanation of benefits (EOB). Then, along with your appeal, you should submit evidence (studies and letters of support, for example) supporting your claim.
This exercise will also help determine what appeals are worth the time and energy. For example, it is not worth the effort to appeal a claim where the patient's deductible exceeds the amount billed, or where a patient's coverage has lapsed. However, if the denial is because a procedure is "experimental and investigative" or "not medically necessary," an appeal can be successful, especially if accompanied with peer-reviewed studies countering the insurer's denial. Also keep in mind that flat-out rejections are typically easier to appeal than reduced reimbursement claims.
When you do appeal, follow the guidelines stated in your provider agreement. If the patient is a beneficiary of Medicaid or Medicare, you should carefully consider appeals, as they can be a drawn out and expensive process. For example, CMS requires a provider to go through 5 levels of appeal before having a right to bring a claim in court for non-payment.
For out-of-network providers, the Employee Retirement Income Security Act (ERISA) governs the vast majority of private insurance claims. These claims typically require 2 levels of appeal before you can bring a suit in court. Keep a tight record of your appeals process in case you do decide to sue later on.
Look for trends
Your denied claim may be a one-off rejection, or it could be part of a larger problem. Review any claims denials to determine if the payer has developed a particular policy or guideline that is restricting payment. Keep in mind that those payment policies could also result in an insurer's recoupment of previously paid claims.
Here's what tends to happen. CMS will change its payment policy on a particular procedure and, soon enough, private payers follow. Oftentimes this is done with very little notice, and providers only learn of the change when reimbursements on a given CPT code come to an abrupt halt.
Keep an eye out for these developments, and attempt to clarify the policy with the insurer if you identify a trend. If you're faced with a dramatic reduction on your reimbursements for a particular procedure based on a vague "policy" or "guideline," consult with an attorney.
Consider the patient's role in the process
Most of the time, patients are kept out of the claims process. However, including your patients in the process is important in several respects.
First, if you're considering pursuing litigation for claims denial, be sure that you've been in compliance with pursuing patient-shared obligations. It is a provider's responsibility to bill and collect co-pays, deductibles and co-insurance. While there are exceptions for financial hardship, they are rare. A failure to engage in good faith efforts to collect the patient's share can expose you to accusations of non-compliance by the payer.
If a claim is rejected, consider balance billing or charging patients for the unpaid bill. While the laws vary from state to state, many do permit out-of-network providers to balance bill a patient. In the event a claim is denied or reimbursement has been significantly lowered, balance billing can be considered as a way to increase revenue. However, keep in mind that balance billing can negatively impact your relationship with patients, as most don't look favorably on the practice.
Get a lawyer involved
If you've documented everything, filed timely appeals and still aren't getting anywhere, you may want to consider litigation. While not practical for one-off denials, involving outside counsel may be the right solution in several cases, including:
- Repeated denials. If payers are consistently denying payment on high-volume, bread-and-butter work, it is worth it to evaluate the potential of successful litigation with an attorney.
- Recoupment letters. Always call an attorney if you receive a notice of recoupment from a payer. You should first investigate these with the assistance of an attorney experienced in medical billing disputes.
- Fraud investigation/special investigations unit. Sometimes, an insurer will "flag" a provider for fraud or will refer the provider to a "special investigations unit." These flags will delay payment, if not stop it altogether, since you are required to submit certain documentation prior to payment on any claim. An attorney can assist you with resolving whatever issues caused the "fraud flag." Getting out of this pre-payment review, or the fraud unit, is critical to maintaining your revenue stream.