Medical denials and appeals can be an expensive and/or time-consuming part of medical practice management depending how they are handled. Knowing the legal requirements and contractual performance standards that help improve your practice’s appeal efforts and escalating claims to higher-quality reviewers is important in today’s healthcare industry, according to Tammy Tipton, president, Appeal Solutions, Blanchard, Okla.
Tipton, who spoke on the topic at MGMA18 | The Financial Conference in Orlando, Fla., said while denial management is usually a “well-established business practice” for healthcare organizations, practices that handle it internally need to create a revenue cycle “dream team” that pairs staff who can make clinical arguments in support of appeals with specific legal expertise for the process.
The Employee Retirement Income Security Act of 1974 (ERISA) applies to many commercial payer health claims, as well as group self-funded plans and larger employer plans since the passage of the Patient Protection and Affordable Care Act (ACA). ERISA gives “employers a lot of discretion in designing these plans that exempted them from a lot of state laws [regarding] how those plans are processed,” Tipton said. “So it really left you open to whatever that plan said about claims payment and review policies.”
While payers have a degree of leverage over providers when it comes to denied claims and appeals, as well as subsequent litigation, patients still can file a claim with their insurance carrier for prompt evaluation. This is where it becomes important for practices to understand the legal requirements for being part of the process.
“What you have to do to really have full authority to appeal is to attain authorization from your patients to represent them in the appeals process,” Tipton said.
While each stage of denials management — eligibility, referral/preauthorization, claims and even refund requests — has specific legal requirements and contractual performance standards, patient authorization is crucial, because practices “have very limited rights under your provider contracts to litigate or to pursue disclosure demands on denials.
“If the patient signs their right to appeal to you, case after case that have gone to litigation states that the provider has the right to stand in the shoes of the patient and exercise any of the legal remedies that the patient has or enjoys [regarding] their case,” Tipton said. “You’re really supposed to be able to go right up to litigation and handle the litigation for them.”
But all that work begins filing appeals on time. “In an effort to secure all the information you need for a quality appeal, you’re gathering clinical information, you’re maybe getting a letter of medical necessity from a provider or even perhaps a referring provider,” Tipton said. “And in your efforts to do a really high-quality appeal you blow past your filing deadline. If you do that, you really get no kind of quality review process by the payer, if any.”
Tipton recommends that practices maintain a database of high-quality appeal letter templates: “This not only allows [your staff] to more easily appeal those denials within a timeframe, but it also allows you to incorporate” legal information that includes components such as disclosure requests, as state and/or federal claim processing disclosure laws may compel the company to provide requested information about their decision-making.
Tipton outlined a sample paragraph to include in level-one appeal letters to implicate disclosure law:
It is our position that failure to provide the requested information may violate state and/or federal claim processing disclosure laws or, in the minimum, nondisclosure reflects a poor quality medical process which discourages treatment provider input. Disclosure standards are meant to ensure that all qualified parties have access to the information necessary to properly appeal an adverse determination.
“You’re not just presenting your argument and your clinical information that supports that argument,” Tipton said. “You also need to be asking the payer to provide their justification for the denial.”
These payer compliance efforts are intended to escalate your appeal to the point at which you are getting beyond the bias of an internal review process and possibly to an external review process, where federal law includes protections regarding reviewers’ credentials and experience, especially for subspecialty claims.
When requesting clinical review following a denial, requests for specialty-specific criteria to establish a denial’s accuracy can include:
- The name of the board-certified reviewer who oversaw the claim and any advanced training he/she has related to the type of care reviewed
- The reviewer’s recommendation for alternative care
- Copies of internal clinical guidelines, including the source and date of development
- An outline of specific records reviewed and descriptions of any records necessary to justify coverage of treatment
- Copies of peer-reviewed literature or expert medical opinions/assessments regarding the type of treatment reviewed and its efficacy
Such requests should also be customized to include:
- A summary of a patient’s condition and care (medical records may be attached)
- Citations of clinical criteria used in developing the treatment plan
- Citations of managed care medical necessity review requirements that specify the criteria to use in decision-making
As you work toward higher-level appeals, making disclosure requests specific to the denial will be important so you can “compare … their component decision-making tools with your own,” Tipton said. For example, appealing providers are often told that plan benefits are calculated according to the Usual, Customary and Reasonable (UCR) fee schedule. If a plan offers mental health benefits, there are strict protections afforded under the Mental Health Parity and Addiction Equity Act (MHPAEA). Tipton noted: If the UCR calculation falls under the MHPAEA, “it has to be on par with medical benefits.” If a payer used a specialized database to only compare your provider with very few in-network providers, they may not be compliant.
Ultimately, Tipton said if you follow these steps on the front end of your denials management, it will result in better outcomes as you escalate your patients’ claims.
“If you’ve taken all this time to do a great level-one appeal, go ahead and submit it for your level-two appeal and at least put the payer through the sort of management resource pain of having to process it again and make a higher-level decision on it,” Tipton said. “It does take a lot of our time; it is costly to have people available for doing that [but] there are intangible benefits to patient advocacy.”
When your practice staff are trained on these issues, it then becomes important to convey to patients what those steps are, as well.
“Caring about the patient does include caring about the appeal,” Tipton said. “It’s really important that if you’re going to [manage appeals] on their behalf, they understand what you’re doing, how far you’re going and that they’re made aware of that.”
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