August 12, 2008 Bottom Line

Bottom Line: How to Win Private Plan Appeals

Have you had a reimbursement claim denied by an insurer? You may ultimately have the last word, but you must understand the insurer's logic to effectively counter the denial. This column focuses on why claims are denied and what you can do to minimize denials and mount successful appeals.

Q: What are the most common reasons claims are denied?

Health plans deny reimbursement claims for a number of reasons: missed deadlines, billing errors, coverage exclusions, or medically unnecessary services or items. A denial notice should include a full explanation of the basis for the denial. If it doesn't, ask for clarification—preferably in writing.

Q: What if I miss a submission deadline? Are exceptions allowed?

Provider contracts set a deadline to submit reimbursement claims; the insurer is not obligated to reimburse you for claims submitted after that date. However, there may be certain exceptions for dire events (e.g., natural disasters or medical emergencies) that make deadline compliance impossible. Check your contract for exceptions; if none are listed, describe the event with details and documentation, such as medical records and witnesses' statements (signed and notarized).

Q: If I make a coding error, can I resubmit the claim?

Incorrect reimbursement amounts or billing codes, data-entry errors, or omissions can all trigger denials. In the case of incomplete forms, an insurer may allow resubmission of corrected forms. It is not possible to give a blanket statement about when plans allow simple resubmission, but it is more likely with data that is nonsubstantive or unrelated to the claim itself, such as a missing name.

Noncoverage of a service represented by an American Medical Association Current Procedural Terminology (CPT) code, rather than a coding error, may be the reason for denial. For code controversies, reference patient records to support your choices. Private plans use the CPT codes for billing. They are not obligated to adopt CPT coding rules of major public plans, such as Medicare, but those rules may persuade an insurer to cover the claim, especially in the absence of a plan rule.

Q: How can I minimize billing errors?

To avoid making coding errors, ask for copies of the plan's coding rules, policies, or guidelines when you first sign on as a provider. (This information may be available on the insurer's Web site.) Common coding errors include failure to select the most specific diagnostic code (International Classification of Diseases, 9th Revision, Clinical Modification or "ICD-9" code) available for a disorder, or confusing primary and secondary diagnoses when coding. Use your patient's medical records, which should support your diagnostic code choice, to dispute a denial based on incorrect ICD-9 coding.

Q: Is there any way to challenge broad exclusions of services not considered "medically necessary?"

A health plan may exclude coverage for specific treatments or medical devices. For example, many plans exclude treatment for a speech-language disorder categorized as a developmental delay or related to a specific etiology, such as autism. The individual plan contract always controls coverage. You can refer to the policies of the plan or its parent corporation to bolster your position. You can emphasize why the plan's approach is inconsistent or in conflict with established medical knowledge and provider practice.

Q: What medical necessity criteria do insurers use to determine coverage? What strategy can be used to appeal decisions based upon these criteria?

In the absence of coverage exclusions, insurers apply "medical necessity" criteria to each case to determine coverage. Some reasons for denials include:

  • Categorizing a disorder as a developmental delay on the basis that it will, theoretically, resolve without medical intervention
  • Determining that a treatment or device is educational, rather than medical, when it results in a patient's behavioral changes that improve the disorder (for example, treatment for voice disorders to correct behavioral habits that stress vocal cords)
  • Characterizing a treatment or device as "experimental" or "investigational" because it is not current practice in the field and/or because available data are insufficient to prove medical benefits to the patient

In challenging a denial of a service deemed "medically unnecessary," a provider must demonstrate that: the treatment or device is required for a particular patient to improve or not backslide; it constitutes medical, rather than educational, treatment; and it is an accepted, medically beneficial practice backed by quantitative and/or qualitative data. (For more general information, see "Medical Necessity for Speech-Language Pathology and Audiology Services" [PDF] on the ASHA Web site.)

Q: How can I appeal a denied claim? Shouldn't my patient, as the insured person, appeal?

A patient has the right to pursue direct reimbursement from the insurer, including appealing a claim denial, if the patient has paid the provider for covered services or items. A patient may choose instead to transfer (assign) reimbursement-claim rights (with the right to appeal) to the provider or designate the provider to pursue reimbursement on the patient's behalf. The provider may then legally claim direct reimbursement from the patient's insurance company. Patients may assign their payment rights under private or governmental (Medicare, Medicaid, TriCare) insurance. Governmental programs require a special claim form and have special claim dispute/appeal processes. Private-sector insurers may require providers to use specific claim and dispute forms or allow the provider's own forms.

Q: How does the appeal process work, and who reviews the appeals?

Federal and state laws allow you to appeal claim denials. The denial notice should explain the procedures. They may also be in the provider contract or manual, typically given to providers when they sign contracts or available on an insurer's Web site. Claim denial reviews may be internal or external. Internal reviews are performed by the insurer or its third-party administrator for claims processing. Typically, the insurer's entire internal review process must be completed before the case is eligible for an external review.

External reviews are conducted independently by third-party organizations without the insurer. These review programs are controlled by state laws and are often operated by state insurance departments, which assign an independent review organization (IRO) to each case.

Q: What are my chances of winning an appeal?

A 2006 report from America's Health Insurance Plans (AHIP) analyzed more than 6,000 cases from 2003–2004. AHIP found that independent reviewers backed the plan's denial in about 60% of cases and supported consumers in about 40% of cases. Providers appeal on many of the same bases as patients, so percentages are likely to be similar for providers. If an IRO review is unavailable or an IRO denies the claim, the next avenue of redress after that process is completed is a lawsuit.

AHIP also noted that employer-owned (self-insured) health plans fall under federal law, so are typically outside the scope of state external review laws. Your access to external review, therefore, depends on your state and the type of insurer that denied your claim.

Q: How can I prepare an effective appeal?

Put your dispute in writing. State your position up front with details later. Use "buzz words" familiar to the insurer to avoid misunderstandings. Include key information and attach copies of the claim, denial notice, and documentation to support your appeal. Refer to claim and denial numbers, dates, the insurer's procedural rules by number and title, and other identifying information. Address the insurer's decision-making criteria point by point to move your argument forward. Keep your narrative clear and short; refrain from rambling or including extraneous details.

Use visual aids like bullet points, a matrix, or tables to make points clearly. Be polite. Make your case a relief to the claim reviewer, not a burden.

Q: Are there other documents I should review or present for the appeal?

In addition to the patient's medical records, which establish the disorder's nature and treatment, other documentation can help your case. Include a table of contents. Number and title documents and refer to them in the dispute form or letter. A provider contract, provider manual, and billing rules may be useful. Major health plans such as Blue Cross Blue Shield (BCBS) have a "parent" corporation—coverage policies from both are commonly on the Web.

The ASHA Web site has position statements, practice guidelines, research documents, and other information to prove which provider practices are accepted in the field. Clinical practice guidelines (from ASHA's National Center for Evidence-Based Practice in Communication Disorders) are also available on the ASHA Web site. Other valuable documentation includes efficacy research results and medical journal articles found on Medline and other Internet sites. ASHA's efficacy papers can be used to support medical necessity for speech-language and audiological services and devices.

Studies from pediatricians, neurologists, or psychologists related to your patient's condition may also prove useful. You can also include anecdotes about similar patients who improved with the treatment or device at issue in the dispute and are your basis for a patient's improvement and prognosis.

To paraphrase inventor Thomas Edison, winning appeals is 98% preparation and 2% perspiration.

Angela Foehl, director of private health plans advocacy, can be reached at afoehl@asha.org or 800-498-2071, ext. 5677.

cite as: Foehl, A. (2008, August 12). Bottom Line: How to Win Private Plan Appeals. The ASHA Leader.

  

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