Resolving denied claims is time consuming, labor intensive and without the correct knowledge, usually unsuccessful. Unfortunately for health care facilities and providers, the volume of denials is rising. Many facilities are losing money and sometimes, are forced out of business.
Because regulations are stricter than before, it is more difficult to get prior
authorization, and the dollar amount that insurance companies allow for payment is just a fraction of the billed charge. Additionally, due to increasingly complex payer contracts and utilization rules EOB’s (explanation of benefits) are unclear, leaving billers and providers unsure if the claim was processed appropriately.
This compounding problem is leaving many office managers with limited options, usually resulting in write-offs. A recent survey found that 9 percent of healthcare transactions were denied and of that 9 percent, only 65 percent of claims were appealed.
Because claim denials vary depending on the type of service and insurance carrier, it is important to include as much detail about the claim, your reimbursement history with that payer and your desired outcome. You’ll also want to include why the service was medically necessary and any authorization you obtained prior to treatment.
In the top left corner of the letter, you will need to identify your practice or facility, the name of the patient, the policy ID number, patient’s date of birth, the dates of service in question and the claim number assigned by the insurance company.
Tax ID: 27-xxxxxxx
Re: John Doe
Date of Birth: 06/08/1972
Dates of Service: 2/16 - 2/22/2017
Claim #: PWY0X9P2K00
DCN #: (If applicable)
Next, state the reason the claim was denied. Reference the denial reason code listed by the insurance company on the EOB. Provide a brief history of the patient's illness and why the service or treatment was medically necessary. Use evidence-based information to support your claim.
If there is an authorization number or record of a conversation between your office and the insurance company, include that and relevant notes from the call that will help prove your case. You can also include relevant clinical notes and any correspondence you received from the insurer regarding the claim.
Once you submit your appeal, you should follow-up with the insurance company to make sure it was received and is in process. Processing typically takes 90 days. Once the insurance company makes a decision, they will mail you a written notice that states the final determination and hopefully, a payment.
If your initial appeal is denied by the patient’s insurance company, you can request an external review by the state. Below are the most common examples of claim denials that require review by an outside board.
Guidelines for submitting an external review can vary by state but typically follow the Department of Health and Human Services' guidelines. You can find instructions on how to submit an external review on the denial letter you receive from the patient's insurance provider. You can also request a form directly from the Department of Health and Human Services' website.
I takes an experienced team to assess and determine the root case of most claim denials. Consider the time it takes to research the denial reason, draft the letter, gather clinical notes and follow up to make sure its processing correctly. Due to high volume and limited staff resources, this is a job of its own - but an important one.
If claim denials and incorrect payments are reeking havoc on your accounts receivable, let us help. Schedule a consultation with our experienced billing team HERE.