3 Ways to Improve Your Clinical Appeals Success Rate

Posted by Advent Health Partners on Aug 9, 2017 2:30:00 PM

# Ways to Improve Your Clinical Appeals Success Rate (2).png

Hospitals and other healthcare providers are using substantial amounts of resources and losing money from costs and inefficiencies within their revenue management cycles. The AMA estimates that as much as 25–30 percent of national healthcare expenditures are directly due to these transaction and related costs, with up to 15-20 percent of submitted gross charge claims being denied by payers. Given that the industry standard of expected denials is in the 3-5 percent range, anything significantly higher is cause for concern.

Most denials are due to several factors, almost all of which are preventable:

  • Lack of transparency
  • Administrative inefficiency
  • Inaccurate payments
  • Lapses in payment reconciliation and follow-up on claims

While patients themselves are frequently on the hook for dealing with denials, often turning to the provider for help only after other attempts to negotiate with the insurance companies have failed, hospitals, physicians’ offices and other clinicians are becoming more proactive in both preventing and managing denials and improving their clinical appeals success rate.

 

[DOWNLOAD]  Appeal Letter Mistakes to Avoid for Maximum Revenue

 

Understand the reasons behind the denial

  • Read and understand the Explanation of Benefits (EOB) or letter of Advance Beneficiary Notice of Noncoverage – contact the payer for clarification, if necessary.
  • Is the payer’s denial based on needing more information or is it simply not covered under any circumstances? If the former, billing may have overlooked this before submitting; if non-payable, your system or front desk failed to flag this before services were performed.
  • A large dollar amount may be flagged and pended by the payer’s adjudication system for hands-on review. This doesn’t necessarily mean it has been or will be denied – the payer is simply taking a closer look before making a payout. Head these off by thoroughly documenting all charges at first submission.
  • Lack of standardized claims processing, reports Healthcare Finance News, is also part of the problem – some (mainly smaller, rural) providers are still submitting paper claims due to fewer financial resources. These can slow down the process and contribute to errors and delays.

Know what’s payable and what isn’t

  • To improve your clinical appeals success rate, review your payer contract for information on which treatments or diagnostics are covered, under what circumstances, whether pre-authorizations needed, the maximum number of allowed treatments and so on.
  • Contracts should also clarify whether coverage is limited to in-network as well as circumstances permitting using out-of-network providers.
  • If a charge is for a non-covered service there is not much you can do to appeal, except to chalk it up to an expensive lesson.
  • In what is probably a typical scenario, one Orlando, Florida health system found that authorization problems topped the list in denials, followed by requests for additional information and medical necessity.

Best practices for appealing a denial

  • Have all of the necessary documentation to support your appeal: contracts, policies, physician’s notes and anything else that can bolster your case.
  • The Healthcare Financial Management Association (HFMA) estimates that approximately 67 percent of denied claims are appealable, so the numbers are on your side.
  • Most payers have time limits so be sure that you are appealing within the payer’s designated appeal period.
  • Have a well-organized appeal letter detailing all relevant claim information, while ensuring that payer contact information is correct.

Takeaway: "the best defense is a good offense"

Have a plan in place to prevent denials by tracking them for three or more months to get a baseline ratio of denials against charges. Review dollar and volume data for top payers and denials, using the 80/20 rule. With analytics, corrective actions and best practices, hospitals can improve their clinical appeals success rate to collect and retain more of the revenue they deserve.

appeal letter mistakes

Topics: Healthcare Providers, Claim Denials