Denied ClaimsThe Medical Group Management Association actually put a price tag on the cost of managing each denial in your organization’s denial queue: $25-$30 a piece. That cost adds up when you consider that up to as many as a quarter of all claims get denied – meaning that for some hospitals, that $25 per claim price tag could become overwhelming pretty quickly.


The first step in the case of denied claims is determining why they were denied. This isn’t always obvious, and if you are manually managing your claims, it can be a daunting task to sift through all the documentation. Utilization of an electronic claim management tool will cut down on the “hands-on” time required with manual claim management and provide the technology necessary to look back at denials longitudinally and perhaps identify trends. When it comes to reducing denials, data is your best friend. If you can narrow down certain areas of medical practice or even specific procedures that are denial prone, you can hone your focus in on addressing those areas of vulnerability.


Of course, there will also be times when you review a claim only to determine without a shadow of a doubt that it was denied in error. You always have the ability to appeal denied claims, but you have to be prepared with adequate documentation. You also have to make sure that you file in a timely manner. Denied claims are liable to stack up: either in an electronic queue or physically on someone’s desk. This is the first misstep that will end up costing you money. Appeals can only be filed in a particular window of time that is determined by the insurer. If you use software to manage your claims, chances are it is already set up to auto-calculate when the deadline for appealing would be. Otherwise, you’ll have to dig out your desktop calendar and figure it out by hand. Typically, it’s somewhere between 15-30 days, with some cases requiring attention within just 72 hours (for urgent medical treatment) or longer periods, like 90 days, as determined by the insurer.


It wasn’t always this way – before the ACA, claims could only be appealed if a certain predetermined dollar amount was at stake. The ACA gave the right for claims to be appealed based on much broader criteria. This has been particularly helpful to organizations that have long been prepared to fight the battle of claim denials, but were not permitted to do so even though they kept impeccable records. Stellar record keeping is to be commended, because as we know now it is often what makes or breaks the appeal of a claim denial.


In some instances, the reason for the denial is obvious and a relatively simple fix. If it involves a clerical error that can be easily corrected and resubmitted, the problem is fixed almost as quickly as it is identified. But if it’s a question of medical necessity, additional documentation from the physician will be required to support the treatment. Part of the reasoning for this is that it used to be relatively easy for physicians to file fraudulent claims and receive payments that they weren’t actually entitled to. As you can imagine, this bred discontent within the industry, and also cost it a lot of money. By putting stopgaps in place that could protect against this type of abuse of the system, it also made it more difficult at times for physicians to get the payments they were entitled to. Overall, though, it has reformed what was formerly a corrupt system.


If you’ve submitted an initial appeal and it is denied then you can request an external appeal. This invites a third party in to the conversation who is independent from the payer and the provider in question. If you decide that you need an external review, your insurance company is required to walk you through the steps as it applies to the case you’re appealing. The ACA has put a cap on how long an external review takes – in most cases, it’s less than 60 days.


When you think about all the time and energy required of the appeals process, you’re probably asking yourself if it’s worth it. The short answer is, it depends on the organization but in most cases, yes. As Michael Scott said, “You miss 100% of the shots you don’t take.” – and so to, you miss out on 100% of the overturned denials you don’t appeal.