Executive Summary

Some denied claims are can be successfully appealed fairly easily — if a certain piece of documentation is provided, for instance. Others are far more challenging. These “uncollectible” claims include denials for lack of medical necessity, failure to preauthorize treatment, untimely filing, and failure to update Coordination of Benefits.

“In most cases, these are claims that have been through at least the first level of appeal by the hospital unsuccessfully. They are either deemed uncollectable or are outsourced to a partner,” says George Abatjoglou, CEO of Kemberton, a Brentwood, TN-based provider of specialized revenue cycle management services.

To get results with the second round appeal, a new approach is needed. “It is a continuously evolving process to make progress, reformulate or reposition the argument — as well as to find someone at the payer to listen,” says Abatjoglou.

Abatjoglou finds two factors create obstacles in collecting complex claims: 

• the volume of denials from both commercial and governmental payers;
• ever-changing reasons for denials.

Providers often use standard appeal language instead of taking the time to formulate case-specific arguments. This approach is typically unsuccessful.

“Once that initial appeal is rejected — which is often standard protocol for many payers — there is even less time to create a more thoughtful second appeal,” he says.

Need Unified Approach

Payers are constantly coming up with new reasons to deny claims. “As a result, new documentation requirements are necessary to overturn those denials,” Abatjoglou says.

Some of these are very specialized. “They are not in the typical workflow for a provider’s denial processing organization — but can be very meaningful from a dollars perspective,” Abatjoglou says.

The best approach: A single, unified team acting under the same set of goals. “However, this is generally not the case,” says Abatjoglou.

Most hospitals do have the right resources, but different departments are not acting in unison. For instance, case management handles the clinical aspect of denials, compliance handles the legal aspects, and finance handles the follow-up.

“In order to be effective at getting past first-level appeals, organizations need an interdisciplinary team that marches to the beat of the same drummer,” Abatjoglou says.

Some hospitals choose to outsource the problem, by working with third-party vendors with an in-depth knowledge of payers. “These organizations can leverage their relationships to get to the right person with the right information in the right format, to reposition the claim and have the claim reviewed and accepted,” Abatjoglou says. He suggests the following steps can lead to successful appeals on previously denied claims:

• Confirm the reason for the denial with the payer.
• If at all possible, resolve the issue over the phone on the initial call to the payer.

“The person or company handling the claim should leverage a rules-based knowledge base of prior successful outcomes when speaking with the payer,” says Abatjoglou.

• If the call does not get the claim sent back for reprocessing, ensure the necessary documentation is available to submit a second-level appeal.

An aggressive approach is sometimes needed, says Abatjoglou: “If necessary, involve a legal team to enforce the legal merits of the situation.”