In earlier Kareo newsletters, you have read about tracking your denials by major reason. In early May, Elizabeth Woodcock presented a Kareo webinar on “Denial Management: Strategies to Improve Cash Flow in Medical Billing.” She presented excellent information on denial prevention and denial management and included a sample appeal letter. I hope you participated in her webinar as it was very worthwhile (view archived recording now). Now, let’s spend some time looking at strategies to improve the success of your denial follow up processes.
Before we talk about appeals, you need to make sure that denied claims are not being automatically written off – either by a staff person or your practice management system. Remember, some claim denials are specifically annotated on your EOB (electronically or on paper) and some are line items with a zero payment with little information. New staff members need to be adequately trained on payment posting to make sure that denied claims are not being written off in error as a contractual adjustment. Your practice management system should have the ability to create electronic work files so the staff can organize and prioritize their work in a paperless environment.
Before you assign staff to work on denied claims, think about the different types of denials you have and about which staff member has the right expertise to effectively get the claim paid. You want to consider all of the practice staff and not just your billing team as individuals who can rework a denied claim. For example, if you have certified coders in your practice, that person could review all claims denied as a result of a coding issue. The coder can evaluate whether the claim just needs to be corrected and resubmitted or if additional documentation is required from the patient’s medical record or their physician. Medical record staff or front desk staff can research referring physician names and correct denied claims where they were denied due to no referring physician. With the efficient functionality of electronic work files, we can assign work files to different staff throughout our practices and monitor their progress day to day.
Since payers have different appeal processes, staff can become internal experts on certain payers. Assigning denials by the reason created can often be effective but for some types of payers it is best to have one person handle all of their claim denials. That one staff member will be knowledgeable about the payer’s appeal deadlines, what forms to utilize and how to submit appeals
Payer Appeal Processes
Different payers have unique appeal processes. Someone in your practice needs to compile the appeal processes for the major payers into one reference document available to all staff. These processes might include all or some of the following:
- Submit a corrected claim (this is less work than a full appeal)
- Appeal via the website
- Appeal via a telephone call
- Appeal via fax
- Appeal via letter
Please note that the expense of reworking a denied claim becomes more expensive as you work down the list. In other words, do not send a letter if you can instead appeal via their website.
If your appeal is not successful, you need to consider the payer’s formal appeals process which can include several levels of appeal and reviews by an appeals committee or board. Before going down this path, you need to confirm with the payer all of the appropriate steps and communication channels required by the payer.
Deconstruct Your Denials1
When you or your staff sit down to actually work claim denials, it is immediately a complex process that requires considerable knowledge. Medical groups want experienced staff to work denied claims using established denial management strategies. Due to payer denial deadlines, these strategies must consider speed and efficiency or you may find yourself appealing denials that have already passed the appeal deadline and thus you could be using expensive resources for no potential financial return. Let’s discuss a few examples of reworking claim denials.
- The EOB remark indicates payer has received another claim for the same service and the denial reads “duplicate claim” or “previously paid”. However, the claim may not be a true duplicate for the following reasons:
- Same CPT code/procedure was performed more than once on same date of service (two chest x-rays)
- Same CPT code/procedure was performed more than once by a physician in the same medical group (same tax identification number) on the same date of service (two specialists in the same multispecialty group)
- Payer’s computer system does not read your modifiers as submitted on your claim in their adjudication system
For these reasons, staff cannot just adjust off claims as duplicates because the denial may not be accurate. The staff member needs to review the patient’s account to identify the potential reason for the duplicate denial and then take action based on that. Consider developing a decision tree tool for staff to refer to when working duplicates. For example, if they find that there were two chest x-rays on the same day; then they review the claim submitted to see if it was coded appropriately and if not, they will correct it and resubmit it. If it was coded correctly, they will follow the payer’s appeal process to communicate to the payer that the claim is payable for the following reasons.
Referrals and Authorizations
Not all payers require referrals or authorizations. Thus, your denial rate for these reasons will vary by payer, causing some payers to have a higher total denial rate due to this type of denial. Medical practices must stay current with a payer’s policies on referral and authorizations. In recent years, payers are reducing or eliminating the requirements for a referral or a pre-authorization. One thing for sure is that payers handle them differently. Some payers require a referral or authorization number on the claim and some require a referral attached to a paper claim. Others require that a practice submit a referral online prior to the service being provided and/or it has to be signed by the referring physician.
If you receive a denial due to no referral or authorization, your staff should first review the account to see if the referral/auth was obtained and if it is present, and then resubmit the claim. If it is not present on the account, contact the practice’s referral coordinator to obtain it and resubmit the claim. If the referral/auth was never obtained, then the claim will not be paid and the account should be written off with a non-contractual adjustment code that indicates “denied due to no referral/auth.” Clearly tracking why claims are written off will provide information for future staff meetings and training to improve your medical practice’s performance.
Following some of these strategies will hopefully increase the success of your denial follow up. But continue to ask yourself if you are following the basics of denial prevention. Every time you reduce your denial rate you bring more money to the bottom line of your medical practice – not only do you get paid correctly the first time, but you have eliminated all the rework required when a claim is denied.
1 Keegan DW, Woodcock EW, Larch SM. “The Physician Billing Process: 12 Potholes to Avoid in the Road to Getting Paid” (2nd ed). Medical Group Management Association, 2008.
Sara Larch, MSHA, FACMPE, is a speaker and consultant in practice operations and revenue cycle management and co-author of “The Physician Billing Process: 12 Potholes to Avoid in the Road to Getting Paid.” She contributed an article on “Denial Management 101: Remember the Basics” in our March Getting Paid newsletter.