How often does your health system submit an appeal to an insurance company, call to check on the status, and hear, “We cannot locate your appeal on file”? Tactics like this one can be used by insurance companies, which makes it critical to have a solid denials and appeals follow-up process in place to expedite the appeal and avoid costly delays in reimbursement.

Why do denials keep happening?

There are many different factors that can lead to rising audits and denials within any healthcare organization. Even when all the boxes seem to be checked, denials continue to rise.

Denials and audits are often triggered by automated electronic system for most payers. A majority of hospital admissions stem from the emergency department, in which an unexpected medical condition results in a needed admission. Generally, an admission with a length of stay less than three days and with a diagnosis of congestive heart failure (CHF), chronic obstructive pulmonary disease (COPD), Asthma, Syncope, hypertension, or Transient Ischemic Attack (TIA) sets off automatic triggers for payers to request records for a medical necessity audit review. 

Utilization management teams provide the necessary clinical information during the hospital stay, and the payer provides authorization for services with the caveat, “authorization of services is not a guarantee of payment”. The claim is then submitted with the authorization number and 30 days later a request for records is received. The payer needs to verify that the clinical information provided meets inpatient status or the diagnosis codes used are clinically validated.

If a hospital misses the 30-day time limit for a records request, most payers will issue an automatic denial. From there, the appeals process must be initiated to receive payment for the claim. If the hospital submits records within 30-days, the payer will provide a limited summary on why they felt observation was more appropriate or why some codes are being removed from the claim. Rarely are there credentials on the denial letter for the person conducting the review. The hospital receives the denial and submits an appeal, then specifies the evidence-based criteria used in which the patient met inpatient criteria or why the diagnosis codes are clinically valid based on the information located in the chart.

How can I expedite the appeal process for more timely reimbursement?

After submitting an appeal, it is best practice for the hospital to consistently follow-up payer for a response to the appeal. It is likely that during this follow-up you’ve heard this response:

  • “We cannot locate your appeal on file. You can resubmit to this address and fax number.”
  • “There is no appeal on file.”
  • “It was sent to the wrong department, and I will re-route it.”
  • “Please allow 30 to 60 more days for processing.”

Suddenly a simple 30-day window for an appeal has turned into 6-month process and not much has changed. Behavioral health researchers have agreed to a general principle in changing unhealthy patterns of behavior consisting of three steps. This same principle can be applied when faced with a denial and pursuing an appeal.

  1. Acknowledgement – becoming aware of the patterns of behavior
  2. Acceptance – accept the detrimental nature of that behavior
  3. Action – taking active steps to end the unhealthy behavioral patterns

More than likely you have already completed steps 1 and 2. Now, what action can you take to end the unhealthy pattern?

Keep proof of appeals submission by fax, portal or certified mail.

Can you confirm the fax went through? Did you receive a tracking number in the payer’s portal? If you submitted via mail, who signed for it and when was it received? This information should be readily available when calling to check on the status of an appeal. When a payer states they do not have it on file, quote the date it was received per USPS tracking number and who signed for it, offer to share the screen shot of confirmed portal submission, or fax confirmation. The customer service representative will then reluctantly locate the appeal that previously could not be found. If the customer service representative indicates that you can expect the claim to be processed within 30-60 days, remind the customer service representative that the date of the appeal started when they received it and despite internal issues they may have, this process must be expedited and you expect a response within 7 days.

 Know your contract and provider manual

Hold the payer accountable to the terms of the contract. Most contracts give precise details on time limits for an appeal, where to submit, and when to expect a response. Contracts will also state the payer has 30 or 60 days to respond to an appeal. If you are non-contracted, review your state law by visiting the insurance commissioner website. Many states have adopted state laws that dictate an insurance must respond to an appeal within 30 days.

Collect your data

If you notice a pattern of behavior by the same payer, collect your data and locate your provider liaison to submit a formal inquiry. Payers must be held accountable for following the contract and state laws applicable to the appeals process. If you miss a deadline for appeal or records, rarely will a payer extend you the courtesy of submitting the case late. As a provider, more than likely you want the same level of accountability. While both payers and providers are experiencing staffing shortages,  pandemic related issues, and internal delays, it’s expected that only providers meet deadlines. Continue collecting data from payers to start mitigating these ongoing problems.

Report the payer to the corresponding agency

If you are unable to resolve the claims with your payer liaison, then report the payer to the appropriate oversight agency. Medicare Advantage plans which do not adhere t0 provider contracts should be reported to CMS as a grievance. Any Medicaid Advantage plans not meeting obligations should be reported to the state Medicaid office for oversight. Commercial plans receive oversight by the insurance commissioner of the state, who have a website and portal dedicated to quick submissions of complaints. Medicare, Medicaid, and insurance commissioners will then reach out to the payer and request a resolution within 30 days. If these plans continue to receive complaints, additional actions can be taken by their respective oversight organizations.

Raise concerns with other providers

Whether in your area or state, continue to raise concerns and compare efforts with your peers of other providers. Encourage others to file complaints and grievances to end these unhealthy patterns. This is not just a one payer issue or one provider issue. This is a pattern of behavior that has allowed most insurances to obtain record profits while providers have seen increased denials.

With these five action items, providers should see reduced denials and payers will be forced to follow processes. The issue has been collectively acknowledged by hospitals and health systems, but action must be taken to come to a resolution.

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McBee Denials and Appeals Management Services

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