Top 4 Denial Appeal Success Factors: Mastering Revenue Recovery in Healthcare
Medical denials have reached all-time highs and now rank as one of the top concerns for healthcare leaders. Medicare Advantage (MA) plans are particularly problematic for providers. Research now indicates that MA denials have increased by nearly 56%, while commercial denials have increased by more than 20%. MA denials related to net patient revenue have increased by more than 63%. Additional research shows that private payers are now denying 15% of first-pass claims.
22% of healthcare organizations report losing more than $500,000 annually due to denials, while 10% report losing more than $2 million. The average amount lost per denial is $14,000 or more.
As provider organizations continue to grapple with rising costs, staffing shortages, and sluggish margins, they must address denials head-on. This means aggressively shoring up the appeals process to make it as efficient and effective as possible. This blog outlines four opportunities to do just that.
A recent survey found that 54% of private payer denials are eventually overturned but only after numerous attempts. The same survey found that providers spend nearly $44 on each appeal, which equates to almost $20 billion annually. With the current billing staff shortage, many providers lack the resources to effectively manage the appeals process, which has created significant backlogs. Therefore, taking the steps to ensure the most compelling and complete appeals is vital to a provider’s revenue stream, and it all begins with documentation.
Providers must be extremely diligent in compiling complete, accurate documentation when developing an appeal case. This requires thorough research and root-cause analysis. For example, if the denial is due to medical necessity issues, appeal information should include every aspect of the diagnosis and care plan, including clinical best practices and any relevant research. Involving a clinician can be helpful in pulling together the documentation for these types of appeals.
Automation technology can also help by prioritizing denials, determining which are most likely to be overturned, and what steps must be taken to ensure a successful appeal. It can also automate the actual appeals process, especially for bulk denials from a single payer. This can help providers more effectively assign staff to work appeals with the most financial returns.
Each payer has its own timeline for filing appeals, which is usually 180 days but can vary widely, even within a payer’s individual plans. Unfortunately, appeals that are not submitted within the allotted timeframe are unlikely to be successful. Therefore, it is vital that providers develop a streamlined process for tracking and managing denial notifications. Leveraging denial management tools such as automated reminders is one of the best options for avoiding missed appeal deadlines. Making individual staff members responsible for a specific payer or set of payers can also help.
According to the American Academy of Professional Coders (AAPC), providers must make it clear to the payer exactly what needs to be reviewed. If the provider believes the payer is at fault, this should be supported by relevant information such as state or federal laws or the payer’s own internal policies.
While appeal letter templates are great at cutting down on manual effort, every letter should be customized with as much information as possible. The AAPC also suggests appeals be sent via certified mail. This allows the provider to track that it was received and who signed for it in case a payer denies having received it. For appeals that are submitted via portal or fax, providers should ensure they have appropriate proof of submission, such as portal tracking numbers.
One of the most effective ways to ensure more successful appeals is to get to know payers and create collaborative relationships, which means establishing clear communication pathways. Providers should identify the appropriate person to speak with for escalating issues or following up with denial submissions. Payers are experiencing staffing shortages and high turnover rates, too, so the person answering the phone may genuinely not know who does what within their organization. Therefore, providers must work to establish their own communication channels and not rely on the customer service line.
Another way to improve payer collaboration is by identifying which payers deny the most claims and whether there are typical patterns they follow. For example, MA payers are notorious for medical necessity denials. By tracking which MA payers deny and then overturn specific types of claims, providers can target those payers for regular communications, including calls, emails, portals, or other channels. Providers should also take the time to understand each payer’s contract so that any contractual inconsistencies can be called out and proactively addressed.
Next Steps
As payers deny a record number of claims, providers must readdress and streamline their appeals process. This means taking steps to ensure appropriate documentation, meet timely appeals deadlines, create successful appeal letters, and establish better payer relationships. Another great option is to partner with industry experts who understand the appeals process and have a proven track record of success. Conifer Health is an excellent choice.
Conifer Health’s Denials Management solution empowers providers to successfully appeal inappropriate clinical, technical, and administrative denials and capture every penny they’re owed. The solution includes the following:
- Clinical denial prevention, reviews, and appeals
- Clinical and technical underpayment reviews and appeals
- Government audit reviews and appeals
- Automated workflows, worklists, and predictive modeling to expedite cash collections
- Trending of account metrics, performance, and payer behavior
With the Conifer Health Denial Management, providers can achieve the following benefits:
- Data-driven insights for denials reduction with a continuous feedback loop
- Root-cause analysis tool to allow the creation of specific action plans to prevent denials
- Improved payer insights using payer scorecards and benchmarking
- Expedited response to denials through a combination of automated and smart text appeals
22%
decrease in overall denials
133K+
automated first-level technical appeals
47%
recovery rate from pre-demand payer escalations
Learn how Conifer Health can help your organization achieve greater financial viability through more successful denial appeals. Let’s Talk.