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How to Appeal Denied Claims

Julie McCoy, for HealthLeaders Media, January 10, 2011

Sloppy errors account for a substantial number of denials, Gilbert says. Many claims are submitted to the wrong carrier, for instance. The problem is not just one insurer versus another, but also submitting a claim to a commercial carrier when it should have gone to the patient’s workers’ compensation insurer.

“It’s fairly common to see claims denied on the first round because you simply didn’t send it to the right place,” Gilbert says. “Accuracy in your billing office has to be a top priority because even if you eventually get the claim paid, bouncing it back and forth a few times before you get it right will cost you money.”

Many medical necessity denials also can be traced to incorrect or insufficient information, Gilbert says. He recently saw a claim for anterior cruciate ligament surgery that had been denied as medically unnecessary, but he found it was rejected because the claim did not outline all the previous steps that had been attempted in treating the patient’s shoulder injury.

“When an amended claim was resubmitted with updated information, the claim was paid,” he says.

Sometimes the reason for the denial is not clear. Gilbert recently addressed a problem in which a practice was seeing multiple denials for the same type of claim although virtually identical claims were being paid. “It turned out the ones that were being denied were all coming from the same claims processor in the carrier’s office,” he says. “That one person was denying the claims—incorrectly—and when we pointed out to the carrier that they were being inconsistent, they fixed it.”

If a claim or set of claims are important enough, you usually have the option of suing the carrier, says Eileen Parsons, JD, an attorney with Ver Ploeg & Lumpkin in Miami. Going to court is a big step, but it sometimes is worth it when the potential revenue is high enough, Parsons says. 

Making that decision, however, can be difficult.

“That’s what still puts payers in such a terrific position,” says Parsons. “Their goal is to keep your money and force you to sue, knowing that it is only 1% of 1% that are in a position to do that and make it all the way through. I have providers who say that their denied claims are a significant part of their business—$100,000 or $200,000—but the price of going through the legal process to collect it is so high.”

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