Healthcare providers face costly claim denials that are increasing in frequency each year. However, implementing the right strategies can help avoid these costs. The appeals process for denied medical claims requires additional resources and can result in delays in payment for services provided. However, most denied medical claims can be prevented and managed effectively. Successful denial management involves tracking important metrics, such as the total amount of claims filed, the number and dollar value of denied line items, and the percentage denied. These metrics should be calculated for the hospital, practice, or specific area being analyzed and categorized by payer, reason, provider, speciality, and location. This blog will outline ways to appeal medical claims and strategies to tackle any claim that comes your way.
Denied Medical Claims
A denied medical claims happens when a payor refuses to approve payment collections for a submitted claim. This occurs when a patient receives treatment for an ailment not covered by their health insurance or deemed unnecessary. Coverage limits may be exceeded, or the medical service may come from an out-of-network healthcare provider. Health insurance claims can be denied due to errors on the claim form, medical records, or billing records. Such errors may cause a claim to be rejected instead of denied, which means it is not appealed. The practice or client must correct and resubmit them to rectify rejected claims. Resubmitted claims may still be denied by the health insurer even after correcting errors.
Common Reasons for Denied Medical Claims
Lack of Prior Authorization
The insurance company may require prior authorization for certain procedures, like MRIs and CT scans. Failure to obtain prior authorization can result in a denied medical claim. It is best to confirm with the insurance company beforehand to avoid this.
Missing or Incorrect Information
Medical claims may be denied due to missing information, such as a service code. Incorrect information on the claim, such as misspelt names or incorrect subscriber IDs, can also lead to a denial. Double-checking and triple-checking information on the claim can prevent this. Updating patient records regularly and confirming insurance information can help ensure that the claim is sent to the correct insurer.
Out-of-Network Providers
Insurance plans often have networks of providers they have contracted for lower rates. Going to an out-of-network provider can result in a denied medical claims. To avoid this, always check if a provider is in-network before receiving medical services.
The claim Was Filed Too Late
Insurance companies have a time window for accepting claims; if claims are filed too late, they will be denied. Creating a process in the office to ensure all claims are billed promptly can help prevent claim denial.
Services Not Covered
Exclusions in medical insurance plans can cause claims to be denied. It is important to contact the patient’s insurance company before providing a service to confirm whether it is covered by the plan to avoid denial of the claim.
Incorrect Patient Data or Diagnosis/Procedure Codes
Claims are often rejected due to errors such as incorrect patient information or missing insurance ID characters. Fixing these errors can improve the revenue cycle and reduce denials. Rejections can also occur due to incorrect diagnosis and procedure codes. To avoid these issues, consider outsourcing medical coding to expert service providers. This can help prevent coding-related rejections and improve the claims process.
Approaches For Appealing A Health Insurance Claim Denial
Internal Review
To appeal a denied medical claims, you can request an internal review appeal, also known as a grievance procedure. This involves asking your insurer to review and reconsider their decision to deny coverage. You have the right to file an internal appeal, which can ensure a fair and complete review of the decision.
External Review
If your insurer continues to deny coverage after an internal review, you can pursue an external review appeal. This involves an independent third party reviewing the “external” claim because your insurer will no longer make the final decision. An external review can help ensure the decision is fair and unbiased.
Steps Involved In Appealing a Health Insurance Claim Denial
Determine the Reason for the Denial
To start appealing a health insurance claim denial, you should first find out why the claim was denied. This can be done by reviewing any correspondence or Explanation of Benefits provided by your insurer. It is important to carefully read through these documents and ensure you understand the denial’s reason.
Depending on the type of claim, your insurance provider must provide a written notification and a clear explanation for the reason behind the claim denial within specified time frames, as mandated by law. If the explanation is unclear or unsatisfactory, you can contact your insurer for more information. It is important to keep track of any communication with your insurance and document it carefully.
Ask Your Doctor for Help
After determining the reason for the denial, you should contact your physician’s office and ask for their assistance. Ask them why they believe your claim was denied and if there were any issues with the payment code submitted by their office. They can also verify that the treatment or service provided was medically necessary and that the appropriate medical code was submitted to the insurer.
Documenting any information, you receive from your doctor’s office is important. Gather any relevant documentation from your provider, including health records, dates, a copy of the claim form, and possibly a letter from your doctor requesting that the claim be approved based on their assessment of the circumstances.
Learn How and When to Appeal
Review your health insurance policy to determine the steps required for appealing, the deadlines to file an appeal, and how and where to submit the appeal. If you do not have this information, you can contact your insurer by phone or email to request it. Understanding the appeals process and the required steps can help you to prepare a strong appeal and increase your chances of success.
File an External Review Appeal If Necessary
If your internal appeal fails, you may consider an external review appeal. The external appeal must be filed within four months of receiving the insurer’s final decision. You must have received a denial notice or final determination from the insurer. The external appeal aims to get your unapproved claim approved. You should contact your insurer to find out how to file an external review officially.
Contact Your State
If you have exhausted the appeals process with your insurer and your claim remains denied, you can contact your state’s Department of Insurance, attorney general’s office, or consumer affairs. Your state can provide assistance with an external review of the claim denial. This can be an important step if you believe that your insurer has unfairly denied your claim and need additional support to resolve the issue.
Time Limits for Appealing a Health Insurance Claim Denial
If your health insurance claim has been denied, you have limited time to file an appeal. After being notified of your claim’s denial, you are given up to 180 days or six months to file an internal appeal. Acting quickly and filing your appeal as soon as possible is important.
To file an external review request, you must take action within four months of receiving a denial notice or final decision from your insurer regarding your claim after an unsuccessful internal appeal. This time limit is important to remember as it is a strict deadline that cannot be extended. Therefore, it is important to act promptly to ensure you have the best chance of success in appealing your denied claim.
Strategies For Appealing Denied Medical Claims
Here are some strategies for proactively appealing denied medical claims:
- Carefully review the denial letter and try to understand why the claim was denied. It’s essential to review the summary of benefits in your insurance documentation as it provides information on what your insurance plan covers. Additionally, it outlines any limitations or exclusions that may apply, which are services or treatments that your insurance will not cover.
- Gather all the relevant information regarding the claim, such as medical records, test results, and bills. This will help you provide a broad appeal.
- Familiarize yourself with your rights as a patient and the rules and regulations of your insurance plan. This will help you make a strong case in your appeal.
- In case you are unsure of the reason for the denial of your claim, it is recommended that you seek clarification from your insurance provider. It’s essential to ask if the claim was denied due to missing information or a billing error. If you’re considering an appeal, ask the representative to provide information on the appeals process or send you a guide that explains how to proceed.
- Contact your healthcare provider for additional information or documentation supporting your appeal. If your insurance provider suggests that your doctor left out information or used an incorrect code, you should contact your doctor’s staff. In addition, request them to address the issue by correcting the error and resubmitting the paperwork to your insurance provider for reevaluation.
- If your insurance provider denies your claim, you have the right to file an appeal, which includes an internal appeal with your insurer and an external review by an independent third party, as mandated by the law. It is crucial to follow your insurance plan’s appeal process, which can be found on their website or by contacting customer service for detailed instructions and necessary forms.
- Make sure to keep your appeal letter brief and straightforward. Explain why the claim should be covered, provide supporting evidence, and reference applicable regulations or policies.
- After submitting your appeal, follow up regularly with your insurance company to check on the status of your claim.
Appealing a denied medical claim can be time-consuming and frustrating, but it’s important to keep advocating for yourself and your healthcare needs.
In conclusion, research shows that navigating the healthcare system in America can be challenging and frustrating, mainly when dealing with denied medical claims. Reviewing insurance plan documents carefully, following the appeals process, gathering all relevant information, and seeking outside help if necessary are crucial. By doing so, individuals can effectively advocate for their healthcare needs and work towards resolving denied medical claims.
