According to the MGMA, 50% to 65% of denials are never worked, leaving earned money on the table.
With an automated appeals process, ARs are optimized through an accelerated recovery function powered by AI and robotic process automation.
Root cause analyses can be available for the clinical and business office staff to review for upgrades to processes that would allow fewer denials in the future.
Medical billing is a complicated three-party process involving a complex reimbursement structure based on a double codified system, administered by multiple parties based on the individual patient’s coverage. Each required step needs to be followed precisely to ensure payments are made timely and accurately.
The Medical Billing Process
The medical billing department’s main job is to understand each patient’s payment responsibility, evaluate their insurance coverage, prepare accurate billing forms with precise CPT and ICD-10 codes, and collect the exact payment from the insurance plans or the patients themselves. This process starts when a patient schedules an appointment to see a provider or have a procedure performed and ends when reimbursement is collected.
The Appeals Process in Medical Billing When Claims are Denied
The appeals process in medical billing is used when the insurance payer disagrees with any item or service provided and withholds reimbursement. Some of the more common reasons for claim denials include:
The patient is not enrolled in the plan or with the payer, which may be a failure of the insurance verification process.
The specific medical procedure or treatment is not covered.
Prior authorization was not obtained: Insurance companies may require their approval before services are provided. In the absence of a prior authorization, the claim is denied or payment reduced.
Inadequate documentation to support the reason for performing the medical procedure.
The absence of a valid referral number on file.
Errors in demographic data on the claim: for example, an incorrect procedure code that is age-appropriate would invalidate the claim.
Failure to submit adequate supporting documents for claim adjudication.
According to the Medical Group Management Association, 50% to 65% of denials are never worked, leaving earned money on the table. Healthcare participants must spend their time and resources to appeal denied claims or lose out on important revenue.
Essential Steps in Automated Appeals
How can healthcare providers and their respective billing departments improve their appeals process in medical billing and enhance the likelihood of being reimbursed?
With an automated appeals process, ARs are optimized through an accelerated recovery function powered by AI and robotic process automation. Denials are prioritized electronically and the routine functions are automatically resolved while the more complex denials are prioritized and processed based on predictive criteria.
An automated appeals process follows these steps:
- Once denials are received, proprietary bots use transactional data and all available information from the EHR to find missing criteria, including codes, contractual information, and timely filing limits per payer.
- These common denials are then processed using AI applications and resubmitted without the need for human oversight.
- The denials that are more complex require being categorized by issue and queued to await remediation specialists handling.
- Specialists process the categorized claims ensuring each receives secure resolution for both big ticket and smaller claims.
- Root cause analyses then are available for the clinical and business office staff to review for upgrades to processes that would allow fewer denials in the future.
When processing denials, here are some things that can be done when appealing denied claims that might improve results:
- Call the insurance company. Often claims are denied using generic denial codes that do not accurately explain the reason for not reimbursing. A phone call can help clarify the reason for denial of the claim.
- When calling the insurance company, record the date, name of the insurance company representative, and a reference number for the phone conversation. The reference number will expedite the process, especially when multiple calls to the insurance carrier are required.
- Use the claim number on a corrected claim. Otherwise, the claim will error out as a duplicate claim.
- Plan a strategy for what needs to be appealed. Devise a strategy – for example, if time is an issue, focus on high-dollar claim denials only. Also, some practices are not aggressive about appealing Medicare and Medicaid denials as these payers’ appeal processes are more demanding than others.
- Categorize denials. Categorizing denials helps to identify patterns and streamline the appeals process for medical billing. Billing teams can develop strategies and document how they will appeal to each type of denial, especially payer-specific requirements.
- Streamline appeal letters. Standard appeal letters are available on many payer websites for denials related to invalid code, incorrect subscriber name, or incorrect modifier.
- When filing standard appeals, important details like the type of service provided and the date of service should be mentioned for payers to process the claim.
- For other types of denials, such as those related to medical necessity, a customized appeal letter may be needed.
- Mentioning the payer’s guidelines in the appeal letter may help in processing the claim faster. If the appeals letter fails to provide all the required information, then the appeal process may be prolonged, creating more work for the billing team.
- Be sure to include relevant documentation. The appeal should consist of only the specific documentation related to the visit. If too much documentation is included, it may cause HIPAA violations by releasing excessive information on the patient’s health that is unnecessary for the insurance payer.
- Recruit a professional reviewer with experience in billing, coding, or utilization review. Such a person can supervise and manage the appeals process and contact payers directly.
- Create a contact list. Every healthcare provider’s billing team should have a formal list of contact information for the different payers, including the individual responsible for answering questions related to claim denials.
- Follow-up on each claim weekly until resolved. This will prevent claims from “falling through the cracks.”
Resubmission of a Claim
Resubmission of a claim means that the claim was originally denied due to missing documentation or incorrect coding and is now being resubmitted with the required information. When filing resubmissions, the billing team should include the following information:
An updated copy of the claim along with a copy of the original claim
A copy of the remittance advice on which the claim was denied or incorrectly paid
Any documentation required by the insurance payer
Identify each claim clearly as a “resubmission”
Good communication is key to any successful billing process and the appeals process in medical billing in particular. It starts with your understanding of your payer systems and requirements, travels through working with your patients to understand their financial responsibilities and coverage details, and ends with your team working doggedly to ensure your appeals don’t languish in forgotten (or ignored) piles of paperwork.
In between are the many layers and details, all of which play an important part in the appeals process, are best practices that can be learned from and improved upon to crystalize the overall process and ensure maximum reimbursement. As patterns emerge, i.e., missing prior authorizations, missing or incorrect codes, systems can be improved and accountability strengthened overall to bring more revenue directly to the bottom line with minimal rework.
If you don’t have the time or resources to ensure your automated appeals process is in good working order, contact Infinx to schedule a demo.