Out-of-network hospitals have much different appeal rights with commercial plans than in-network providers, which are governed by contracts with lengthy dispute resolution provisions outlining step-by-step procedures to follow. In the revenue cycle management arena, it is critical for providers to know a health plan’s appeal procedure as well as time requirements for an appeal.
The health plan’s appeal process is a critical tool providers have to receive payment in an era of reduced reimbursements, service limitations, bundled payments based on specific codes, stalled payments, denied claims, take backs, and whatever new foil the health insurance companies concoct.
For out-of-network providers, hospitals do not have a formal appeal process with the health plan to dispute a wrongful denial or underpayment. Out-of-network hospitals receive only one level of appeal from commercial health plans. That means the pressure is on to make that appeal count.
It is common practice for a provider with a denied claim or a disputed reimbursed claim to send in medical records for reconsideration of the denial. Given the expense and having only one bite at the apple with only one opportunity to appeal, it is critical to make the appropriate points for the record.
First, the appeal letter should clearly state the obvious fact that it is an “APPEAL LETTER.” It is not uncommon for a provider to forget to make sure these two simple words are at the top of the letter to properly identify the correspondence. This omission could be a point of contention if the matter were to be tried in civil court, so best to make it crystal clear. The word appeal should also appear several times in the body of the letter.
While I am a disciple of ‘shorter is better’ for the appeal letter, there are exceptions to the rule when a dispute involves medical necessity and/or the level of care received. In such cases, it is best for the hospital to have a physician or registered nurse review the medical records for a written opinion as to why the services were necessary as well as the justification for the level of care for the patient. This medical-review analysis should be the meat of the appeal letter’s body. To make sure the health plan’s appeal department reviewer can make it through the dense body of analysis, make sure the paragraphs are kept to no more than two to three sentences.
Second, the ‘potatoes’ of the written appeal are all the additional documentation that should be included with the medical records. These documents would include: the UB-04 form, the itemized statement, the health plan’s explanation of benefits form, any health plan correspondence and, if provided, a copy of the verbal/written authorization from the health plan. Below the signature of the letter writer, the documents list should appear, listing all the attachments that are included with the letter.
It is best practice to both fax and mail the appeal letter. This will provide peace of mind that the appeal is received (fax confirmation receipt should always be obtained) and that a legible copy has been received by the health plan. On high-dollar claims, it is helpful to send to the health plan via United States Postal Services’ certified mail option. This will provide physical evidence that may be needed by the hospital at later a date, showing that the provider did appeal in a timely manner and submitted the necessary documentation to review the dispute.
Lastly, don’t forget: Since the average millennial has the attention span of eight seconds, it is best to avoid thick blocks that somewhat resemble paragraphs in the appeal letter. Shorter is better, and two sentences is industry standard with good correspondence. You will find that shorter may often be sweeter.