A recent report from the Advisory Board Survey at Healthcare Financial Management Association of the USA revealed that the success rates of appeals for medical bill denial have gone down significantly in the last two years. While the rate dropped from 56% to 45% for private networks, the Medicaid appeals showed a drop from 51% to 41%. The appeals process in medical billing is a highly complicated affair that takes up too much of the billing team’s time. However, if you are aiming to maximize your revenue and keep the cash flow strong, it is good to master the appeals process in medical billing.
The medical billing does not stop at capturing the codes, entering the charges, and submitting the claim to the insurance networks. A competent and experienced billing team is always prepared with a robust strategy to counter any denial that might come their way. The appeals process in medical billing shields the providers from unnecessary revenue loss. Here are the answers to some top frequently asked questions that you should know.
1.When can a provider apply for an appeal?
- Healthcare providers can apply for an appeal process when the insurance panel or the patient has denied their submitted claims.
- In most cases, the insurance companies or patients do not agree with the medical services mentioned in the claim, which leads to grounds for dispute for a particular claim.
- There are different processes for a provider to file an appeal, and often these rules are highly crucial for the letter to go through and fetch any results.
- Even patients can file for an appeal if their insurance company denies covering any particular medical procedure. However, the process is significantly different from the provider’s point of view.
- The providers cannot file an appeal independently if the denied claim pertains to insurance membership, benefit limitation or exclusion, and patient deductible issues.
2.What are the different types of the appeals process in medical billing?
- The reasons for the appeals process can be broadly classified into three types. Each one has a unique cause and different success rates.
- The most common type of appeals process in medical billing arises due to incorrect medical claim formatting.
- The most common cause of incorrect claim formatting is the use of erroneous coding.
- Errors in coding include upcoding or under coding or simply codes that do not correctly convey the meaning of the diagnosis.
- Lack of updated coding also leads to incorrect formatting. At times it is challenging for a short-handed billing team to keep up with the latest guidelines of the federal and state authorities.
- In this case, outsourcing your medical billing to leading revenue cycle management companies can save you a lot of time and resources.
- The second most common reason for the appeals process is the failure to show medical necessity for the procedures performed.
- Prior authorization of medical procedures can keep you from facing denials and filing subsequent appeals to the insurance company.
- Unless it is an emergency, it is advisable to check in with the insurance eligibility of the patient and the services covered to ensure that the claims are not denied.
- The other reason for appealing a denied claim could be non-coverage of the medical procedures.
- This one has significantly low success rates, though in some cases,it might get a win due to a competent appeal letter.
- In any kind of appeals process, having the correct documents along with a well-written appeal letter is crucial to get your claim through.
3.Is the appeals process in medical billing the only way out in case of denied claims?
Absolutely not! The appeals process in medical billing is best described as a tier II procedure for getting your claims accepted. Here are the first procedures that you should adopt:
- The medical bill denial can come from several reasons that have different levels of complexity.
- The insurance panel sends a detailed note for the reason of denial for any particular claim. The first step is to go through the same and prepare a strong argument against it.
- The billing team can then calls up the insurance company and speak with one of the representatives regarding the claim details.
- In some cases where the errors are minor, you can get your claim judgment reversed on the phone call itself.If the phone call is not successful, then you should prepare for the appeals process.
- It is advisable to keep a recording of the call for any future reference that you might need during the appeal.
4.What are the details needed in the appeal letter?
Different kinds of appeals need particular types of appeal letters. However, some general details should be well furnished in the letter to avoid any future issues. They are:
- Name of the healthcare provider who rendered the services
- NPI number of the concerned provider
- Tax ID of the clinic or the provider organization
- Date of the service
- Name of the patient
- Demographic details of the patient
- Insurance ID number of the patient
- Amount of the medical bill as mentioned in the original claim
- A clear argument to support the acceptance of the claim with federal or state rules that apply to the case
5.How to decrease the incidence of denied claims?
The appeals process in medical billing is complex and time-consuming. The billing team needs to invest a significant amount of resources to get a success rate. It is always advisable to decrease your claim denial rate to ensure that you do not have to go through the appeals process. Here are few best practices followed by the industry leaders:
- Conduct frequent checks on your denial metrics to understand the most common reasons for your claim denial.
- Ensure that the billing team is following updated codes with the correct format of the separate insurance companies.
- Conduct staff training programs to help your billing executives stay on top of the new federal guidelines.
- In case you are suffering from a staff shortage, consider getting in touch with a leading RCM company to solve these issues for you.
We hope this blog answered your FAQs related to the appeals process in medical billing. If you have any other question, you can comment it down below. We will get back to you soon. For more updates on healthcare news, technology and management, please subscribe to our blog. Follow us on Twitter, Instagram, Facebook, and LinkedIn for regular updates.