It is annoying and very time-consuming, but it is very important to appeal denied claims. Insurance companies count on providers not pursuing appeals — only 35 percent of providers do. Yet, many times appeals can be successful, so they're worth the time. They are also a valuable tool for determining what needs improvement in the business office.
Common reasons for Medicare claim rejections
When auditing watch for errors payers find easy reasons to deny claims:
- Patient ID/subscriber number is incorrect, missing or placed in the wrong claim field.
- Provider's signature on the claim is missing.
- Date of Service or required dates are missing or incorrect on claim.
- Diagnosis code is invalid, lacks specificity, does not correspond with or does not support the procedure(s) billed.
- Procedure codes used on claims are missing, incorrect or unlisted CPT codes were used, without justification/explanation given.
- Provider's fee on the claim is blank.
- The referring/ordering physician's name and/or NPI number are missing from the claim.
- Sending in another claim on a previously-filed claim (duplicate claims).
- Claims not being filed in a timely manner (within 12 months for traditional Medicare – Medicare HMO plans have tighter timelines).
- Provider tax ID number missing or incorrect.
Billing tips
- Review explanation of benefits/remittance advice for denial reasons revealing problems with insurance verification, coding and the billing at your facility.
- Carefully check Medicare Bulletins monthly for changes to existing policies and new policies (local coverage determinations) for procedures performed in your ASC, which list covered diagnoses and must be followed carefully.
- When physicians list codes on operating reports, coders should still review the entire report to confirm the codes given are correct.
- Check every field on a claim to assure they are completed properly prior to transmitting the claim electronically or submitting it via paper.
- Make sure insurance and demographic information on patients is correct. Perform thorough insurance verifications and check on pre-certifications for every case performed.
- To avoid duplicate claim denials, do not submit another claim for the same services if previously submitted without checking the first claim's status with the payor.
If claims are subject to a post-payment audit, expedite the process by responding to these audits as follows:
- Submit all records requested promptly.
- If operative reports or pathology results are requested, be sure the lesion or pathology in question is easily identifiable.
- Submit only records for the case in question and don't send any non-relevant records.
Appeals of denied claims
Appeals of denied claims are always an unwelcome challenge. When claims are denied, we encourage vigorous appeals. Insurance companies are banking on stringing things out and making the "hassle factor" so high that you will give up. All payors have appeal processes, which differ based on the payor and are outlined in the payor's provider manual. These must be followed closely. If your facility does not have a contract with the payor and your claim is denied, your appeal rights are more restricted.
Medicare's appeal process has five levels:
1. Redetermination
2. Reconsideration by Qualified Independent Contractor (QIC)
3. Administrative Law Judge hearings
4. Departmental Appeals Board/Appeals Council reviews
5. U.S. District Court review
It is very important to include additional documentation to support your position when moving to a higher level of appeal. Get the surgeon to help by writing a medical necessity letter.
Medicare says that 85 percent of claims denied for Medical Necessity reasons are denied because of the diagnosis code billed. For Medicare claims, check to see if there is an LCD policy for the procedure listing the diagnosis codes allowed. If there is not a covered diagnosis on the operative report, consult the pathology report or H&P. If the denial reason involves the ASC's procedure coding not matching the physician's codes, do some research and see if your coding was correct. If it is obvious that the physician coded the claim incorrectly and you feel your coding is correct, pursue appeals based on your correct coding. Do not follow the physician's coding if you know it is incorrect.
Ms. Ellis (sellis@ellismedical.com) is president of Ellis Medical Consulting, a healthcare consulting firm providing chart audits for coding and documentation issues, business office operational assessments, research of coverage issues, fee and coding revisions, litigation support, reimbursement research, coding/billing training, and the development and implementation of billing compliance programs for healthcare providers.