When a reimbursement denial is received, medical insurance billers (MIBs) may need to initiate an appeal process to collect disputed funds for practitioners. In this informative article, Nitin Chhoda reveals the most common reasons for denials and the best strategies for handling claim disputes.
Each insurance claim goes through an adjudication process at a clearinghouse to check the data for errors before forwarding it to the appropriate insurance carrier.
An insurance claim examiner conducts another exploration of the claim and renders a decision. The examiner can choose to pay the billed expenses, reimburse at a reduced rate, or deny the insurance claim.
Insurance carriers usually deny payment for one of six typical reasons. Some of the factors are the following:
- Carrier’s procedures
- Medical necessity
- Inactive policies
- Out-of-network
- Level of care
- Pre-existing conditions
- Pre-authorization
Unknown Carrier’s Procedures
MIBs should be aware of each payer’s procedures and policies for handling claims. Each insurance company has its own hierarchy and protocols for reviewing an insurance claim.
MIBs should also check the contract between the clinician and the insurance company to determine that all conditions have been met.
Medical Documentation is Necessary
When an insurance claim is denied on this basis, it’s up to the MIB to provide documentation, physical therapy documentation for example, that the appropriate diagnosis and procedural codes were employed. Sometimes a coding change and resubmitting the claim will result in a satisfactory resolution.
If the codes are accurate, a letter must be provided that clearly states why the treatment was necessary, along with any extenuating circumstances.
Patient’s Insurance Policy is Now Inactive
It’s essential that the MIB has proof that the patient has an active insurance policy at the time treatment was provided.
This can be accomplished through a copy of the individual’s medical card, a letter from their employer, or a statement from the insurer.
Out-of-Companies-Network of Physicians
Some carriers require patients to only see practitioners within the company’s network of physicians, but situations arise when an in-network clinician isn’t available.
A simple letter explaining, in detail, why the patient didn’t have access to the carrier’s network of clinicians can easily turn an insurance claim denial into a payment.
Having Too Much Level of Care
Insurance claim examiners may determine the level of treatment that was billed exceeded the usual care for a particular ailment. The culprit in insurance claim denial is usually a lack of documentation that fully explains why additional treatment or procedures were required.
Providing supporting documentation usually takes care of the problem.
The Most Common – Having Pre-Existing Conditions
Most insurance policies won’t cover treatment for conditions and diseases that patients were afflicted with prior to when their policy became active.
If treatment can be linked to any prior health problem, the need for an appeal is negated.
If it wasn’t related to a previous health issue, MIBs should provide a written explanation, accompanied in the insurance claim, as to why the ailment wasn’t related to a pre-existing condition.
Unable to Meet Pre-Authorization
A wide variety of treatments require pre-authorization for insurance claim reimbursements. MIBs can reverse a denial if they provide proof the treatment would have been approved, as in the case of an emergency.
A convincing argument can result in full payment and waiving of penalties for not obtaining the pre-authorization.
An insurance claim denial doesn’t always result in an appeal.
