Appealing denied claims used to be a simple process. A biller working with a physician’s office would stamp "APPEAL" in big red letters on a photocopy of the claim, and mail it back to the insurance company. These days, you’d be wise to put the cost of that postage in the bank, and throw away both the APPEAL stamp and its red ink stamp pad. This sort of knee-jerk response won’t even make it past the insurance company’s initial computer screening; they’ll likely toss such "appeals" into the trash and you’ll never hear anything back from them.

To successfully appeal denied claims, you need to get your "A-game" on; otherwise, you won’t see a penny for your efforts.

Follow these steps to effectively appeal denied claims.

1. Recognize denials. Insurance companies don’t print the word "denied" in big letters across the top of the claim form. In fact, the word "denied" may never appear at all. The insurance company simply declares the reimbursement amount to be "$0" and enters an adjustment reason code next to the amount paid. The key is to identify it as separate and distinct from a contractual adjustment, which is – and should be – a write off.

2. Understand why the claim was denied. Before you pick up the phone and demand to speak to the claims representative, determine the root cause of the denial. You can’t effectively appeal until you know why payment for the service was denied. In addition to the reason code, there is a remark code. Look up the insurance company’s definition of that code to get details about the reason for the denial. WPC maintains a complete listing of standard reason and remark codes, available on their website.

3. Don’t procrastinate. There is often a timeframe in which you can resubmit a claim after it’s been denied. Pull the record, research the code, call the patient, etc., but don’t delay: most insurers only allow a few months to resubmit a claim for reconsideration.

4. Follow the insurance company’s rules. Each insurer has an appeal process. The Centers for Medicare and Medicaid Services (CMS), for example, has a form to complete when appealing the denial of a Medicare claim called the "Medicare Redetermination Request Form". Get familiar with the insurer’s protocols to understand your options if your first appeal is turned down. Don’t give up; most insurers have multiple levels of appeals and even a grievance process if you disagree with the outcome after you’ve exhausted the appeals process.

5. Make a compelling case. An appeal means that you disagree with the insurance company’s decision, so put your debate cap on and gather supportive evidence to present your case. Perhaps the most important aspect of your claims letter is the content. The letter should go well beyond stating, "please pay my doctor." Build a compelling case for why the claim should be paid:

• Develop a professional letter that begins by referencing the claim number, date of service and patient; then, briefly describe the particulars of the service in question.
• Use the insurer’s own language if possible. For example, to appeal a claim denied because the insurance company claims the treatment was experimental, quote from the insurer’s own marketing materials where it declares it seeks to provide the best medical care for its beneficiaries.
• When the insurer questions the necessity or separate payment for a distinct service, the physician should type or dictate a paragraph or two about the benefits of the service to the patient. Seek objective evidence to support your case from your specialty society and medical literature.
• Look to see if Medicare or Medicaid pays for the service; if they do, you can argue that even the government has determined that payment is appropriate.
• Copy and attach sections that support your case from coding manuals, including past issues of the American Medical Association (AMA) CPT Coding Assistant, a periodical that the AMA publishes to clarify CPT codes.
• For appeals that concern clinical issues (for example, medical necessity), send the appeal to the medical director of the insurance company.
• Look at the class action settlements between several large physician organizations and a number of national insurance companies; review those settlements to see if anything in there can support your position. See the HMO Settlements site for an up-to-date compilation of the settlements, as well as a list of pending lawsuits.

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