by Communications and Corporate Relations & Business Strategy Staff
Even practitioners who take precautions to avoid insurance payment pitfalls sometimes find themselves faced with a claims denial. Handling denied insurance claims can be a frustrating, time-consuming and complicated process for practicing psychologists and their administrative staff.
Knowing some basic strategies for resolving claims denials can save practitioners time and improve their practice’s cash flow. Some basic pointers for handling claims denials are outlined below.
Carefully review all notifications regarding the claim
It sounds obvious, but it’s one of the most important steps in claims processing. When you receive a remittance advice, explanation of benefits, or other notification from an insurance company regarding a claim, review it carefully.
The notification should indicate whether the claim was paid in full, delayed, partially paid or denied. If the claim is determined to be “unclean” or contested, follow the carrier’s instructions for resubmitting the claim along with any missing or corrected information. (Tip: For pointers on submitting clean claims, read "Insurance Claims 101: Avoiding Common Payment Pitfalls.") If the claim is partially paid or if payment is denied, the notification should specify the reason(s) and outline the specific procedures and documentation required to resubmit the claim or file an appeal.
If the notification is not clear, call the carrier for more information. In addition to eliciting a stated reason for denying a claim, you may find out that the claim was adjudicated incorrectly because of an administrative error on the part of the payer. You might also discover that your submission procedures do not match the company’s requirements but that you can make some simple adjustments to your procedures to streamline future claims submissions.
If your resubmitted claim is denied and you believe the denial was improper, you may appeal the decision according to the carrier’s guidelines. Make sure you know exactly what information you need to submit with your appeal. Keep in mind that appeal procedures may vary by insurance company and state law.
Your appeal should include an explanation of your reconsideration request, along with any necessary supporting documentation, such as a copy of the claim in question and copies of earlier communication to the company about the matter. If your claim is denied on the grounds of “medical necessity,” you may need to submit additional information to demonstrate necessity. Be aware that it is crucial to meet your obligations under the Health Insurance Portability and Accountability Act (HIPAA) to protect psychotherapy notes and to provide only the “minimum necessary” information.
You may need to resubmit the claim or file an appeal more than once to reverse a company’s decision, but don’t give up. Your persistence can demonstrate to the insurance company that you are serious about resolving the problem and getting paid.
It is important to submit and resubmit claims in a timely manner, within the timeframe specified by the company or the applicable laws in your state. Otherwise, the claim may be adjudicated based only on the information you already provided, or any requests for reconsideration or appeal may be denied as untimely.
Get to know the appeals process
When you submit an appeal, make sure you are familiar with the company’s appeals process. When you know your carrier’s policies, you are in a better position to respond to the carrier’s actions. Keep current information regarding the claims adjudication and appeal processes for each carrier with whom you work. Carriers often include this information on their websites and, if applicable, provide hard copies of the information each time you sign a new contract with them.
Maintain records on disputed claims
When you call an insurance company for more information about a claim, keep a record of the information you are given, along with the full name of the representative with whom you spoke. Store this information with other key information about the claim, including: why the claim was partially paid, delayed or denied; the actions your office took to follow up on the claim; and the outcome.
These records can play in important role in future actions, such as taking your appeal to higher levels, submitting complaints to the state insurance commissioner and/or pursuing subsequent litigation. The records can also serve as a helpful file of sample appeals letters and documentation that can aid your office in avoiding or resolving future claims denials.
Remember that help is available
While handling claims denials can be a frustrating process, it can save you time and money in the long run by alerting you to the expectations and requirements of the insurance carriers you contract with. By ensuring that your billing procedures are consistent with the company’s requirements, you may be able to reduce the occurrence of rejections and denials in the future. However, if you continue to encounter reimbursement problems with a particular insurance company, contact your state insurance commissioner’s office for assistance.
For additional pointers related specifically to Medicare claims, see “How to Avoid and Handle Medicare Claim Denials.”