10 Best Practices for Working Insurance Denials
10 Best Practices for Working Insurance Denials

March 6, 2019

Denials can seem like a way of life in any revenue cycle. In this blog, we tackle the 10 best practices for working insurance denials.

1. Quantify the denials.

“You cannot manage what you do not measure.” In order to develop a solid denials management program, quantifying what the denials are and the volume of those denials is paramount. There are two general approaches for reporting denials. The first is using denial reports from the practice management system (PMS). However, this does require that all denials are posted in the PMS (see number 2 below). An alternative reporting mechanism is using the denial reports from the clearinghouse. The drawback to the clearinghouse reports is that it only captures information from electronic remittance advices (ERA). Denials received from paper explanation of benefits (EOB) would not be included. With any denials report, be sure that contractual adjustments (CO-45), Medicare’s sequestration adjustment (CO-253), and any penalty or bonus from Medicare programs are excluded as these are not denials.

2. Post $0 denials.

The benefits for posting denials with a $0 adjustment are two-fold. First, it allows for better reporting as described in number 1 above. Second, it facilitates better denial management by utilizing the features of the PMS. Rather than printing an ERA, highlighting the denial, and passing it off to another staff member to work, by posting the $0 denial, the denial can be moved to a work queue for action, eliminating paper that is subject to getting lost in the shuffle. A bonus benefit is that it’s easy for anyone viewing the account to see why charges weren’t paid without having to retrieve the EOB. Simply put, posting $0 denials is more efficient and reliable.

3. Route denials to the appropriate team members.

Create work queues to route denials based on reason code. Route demographic denials to a front desk work queue, coding denials to the coding team, and other denials to the billing team, based on payor. Set a performance expectation that denials are worked within 24-48 hours of receipt.

4. Develop a plan to avoid denials.

Review the denials reports and ask the question, is there anything we can do internally to avoid these denials? In our experience, most denials can be avoided with new workflows in place. At KZA, we reviewed the most common denial reasons and across specialties, the results are similar. Much time is spent fixing incorrect patient insurance information. These denials can be avoided by performing eligibility verification at the time of the appointment. Other common preventable denials include missing referring provider, missing authorization number, and missing modifiers.

5. Use PMS tools to avoid denials.

Most modern PMSs allow the practice to create custom payor edits to alert the user of a potential problem. For example, if billing a procedure and E/M service together, ensuring a modifier 25 is appended to the E/M. Another example is billing a consultation code to Medicare or other plans that do not accept them.

6. File a corrected claim electronically.

Many common denials can be fixed by submitting a corrected claim. Corrected claims can be submitted electronically, no need to print a CMS-1500 and stamp corrected on it. Most payors will accept a claim code of 7 (replacement) as long as the DCN (original claim number) is also on the claim. Save reconsiderations for true appeals.

7. Submit appeals/reconsiderations online or use payor forms.

Follow payor guidelines when appealing denials. Many payors now allow for online submission of claims reconsiderations. It’s faster, easier, and claims are generally resolved quicker than had the appeal been mailed or faxed. Plus, the appeal is usually trackable in the online portal. In the absence of an online platform to submit reconsiderations, use the payor provided form to submit the appeal. Not following the specific payor’s guidelines for submitting appeals results in denied or delayed appeals.

8. Write better appeal language.

Appeal language that states “read op note very carefully” is generally not sufficient to overturn a denial. Stating that a code is a payable code or that NCCI edits do not exclude the codes to be reported together also do not overturn a denial. Keep in mind the objective with an appeal is to overturn the previous decision from the payor. It’s our job to illustrate why we are right and frankly why they are wrong. Successful appeals describe the why and how the services are substantiated. For example, when appealing an E/M service that has been denied with a procedure performed on the same day, good appeal language describes why the E/M service is a separately reported service and how the separate service is substantiated.

9. Track appeals.

Some PMSs allow for custom claims status such as “appealed.” This allows separate work queues to be established to monitor and track appeals. In the absence of such a system, create an Excel spreadsheet to monitor the volume and success of appeals.

10. Celebrate success.

Nothing is more gratifying than getting a hard denial overturned and paid. Some denials require perseverance, tenacity, and patience and can take months to resolve with lots of back and forth with the payor. Take a moment to celebrate these successes.
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