Denial Management:
Disputing the Decisions that Affect Your Bottom-Line
Overview
Presented by
Patrick Gauthier, Director
Presentation Outline
1. Context: Denials, Appeals and the Law
2. Appeals Process
3. Questions & Answers
Part 1: Background/Context
Denial is not just a river in Egypt
The context is vast and complex
Health Insurance Law,
Regulations, and
Managed Care Policies
Therapeutic
Relationships,
Treatment Plans &
Continuity of Care
Evidence-Based
Practices and
Guidelines
Your Organization’s
Revenue Management and
Financial Future
Our Goals for
Denial Management
Laws, regulations and
policies that are understood
and complied with
Effective treatment
that produces
positive outcomes
Guidelines that clinicians on
both ends of the equation
understand and agree to
Unfortunately,
we can’t rely
on X-Ray
images
Fair reimbursement and
consistent cash flow so all
of your financial
objectives can be met
Appeals Protections
• The Mental Health Parity and Addiction Equity Act of 2008 (Parity)
guarantees patients and providers access to the medical
necessity guidelines used by managed care entities that deny
coverage
• The Patient Protection and Affordable Care Act of 2010 (Reform)
assures patients and providers of fair, professional, and unbiased
review of their appeals and grievances via an external or thirdparty reviewer should the appeal process necessitate escalation.
The law affects all new plans beginning on or after September 23,
2010
• Your State may have additional regulation concerning appeals
such as a requirement that reviewers be located in the same state
as the patient and provider
Denials in Context
Denials of reimbursement can occur
for administrative and/or medical
necessity reasons at the time of
claims adjudication/processing
Pre-Authorization
Concurrent
Review
Concurrent
Review
Retrospective
Review
Denials of coverage and/or benefits can occur at
various Utilization Management or UR junctures
throughout the episode
Denials and
Appeals
Denials
• Important Distinction: Insurers may refuse access to
benefits and reimbursement, but do not deny access to treatment.
Only a provider can do that. Insurers simply don’t pay in the case
of denied benefits.
• Common Types of Denials:
– Administrative - patient or provider failed to follow plan rules
and broke with required processes. Can include ineligibility.
– Policy: plan has pre-determined exclusions and limitations
on reimbursable procedures and providers
– Clinical - plan deems recommended treatment is inconsistent
with generally-agreed upon standards and guidelines
Administrative Denials
• The majority of claims denied
reimbursement are denied based on
administrative reasons
–
–
–
–
–
Missing information
Inaccurate information
Time span issues (dates of services, authorizations)
Ineligible patient, service or provider
Coding errors with diagnosis, patient identifier #,
NPI (provider identifier), procedure code
These are relatively easy to
correct and re-submit
Policy-Based Denials
• Plans’ policies – ideally aligned with State and Federal
laws – are found in their documentation, on their web
site, and in the Provider Manual.
• Policies will describe requirements for utilization
review, financial and service limitations, billing
procedures, and other aspects of the benefits such as
drug formularies.
• Policies will also define those services and providers
that are specifically excluded from coverage.
• Your Best Defense: READ plan policies, manuals
and newsletters. Develop summaries of key points for
clinical and relevant administrative staff
Clinical Denials
•
When a plan doesn’t concur with admission or
treatment based on its understanding, interpretation
of, and application of medical necessity standards
and guidelines, it’s quite possible that one or more
things are going on:
1.
The denial is justified and will be upheld
2.
The provider’s request for coverage is flawed
3.
The reviewer’s judgment or interpretation is flawed
4.
The plan rules are out of step with the law
5.
The guidelines are out of step with reasonable, community, and
professional standards for the practice of mental health and
substance use disorder treatment
First Things First
• Establish the following before proceeding:
 The request for treatment coverage is/isn’t sound and
consistent with plan rules and generally-accepted professional
standards for medical necessity
 The plan reviewer’s clinical and/or procedural judgment is/isn’t
inconsistent with the law and/or generally-accepted professional
standards for medical necessity
 Plan’s rules and policies are/are not consistent with Federal
and State laws, rules and regulations
 Plan’s medical necessity and level of care guidelines are/are
not consistent with generally-accepted standards
Part 2: The Appeals Process
Remember:
•
Appeals can and should be made by patients and
providers but not by both at the same time.
•
Your patients will need your guidance and tools when
making appeals. You may want to dedicate resources
and develop patient tools such as template letters.
Important Stakeholders Include:
1.
2.
3.
The plan’s Customer Service department, Utilization
Reviewers’ supervisors, the Medical Director and
Director of Appeals and Grievances
Insurance Agents and Brokers representing the
patient’s employer
The Department of Insurance (Commissioner) in your
state
Appealing Decisions
•
Three Levels
1. Level One (internal)
2. Level Two (internal, escalated to medical director)
3. Level Three (external review)
Expediting Appeals: Appeals can move more quickly (1) if the
patient is in the hospital or (2) if the service has not yet been
provided.
Emergent/Urgent Appeals (concerning the life and wellbeing of
the patient will be “fast-tracked” by the plan in order to respond
within 1-3 days depending upon circumstances. If the need is
emergent or urgent, use this mechanism and be sure to let the
plan know.
Appealing Decisions
• Plans must provide written appeals instructions.
• Third-level appeals may be heard by a panel
consisting of other providers and professionals
requiring you to appear before them to make
your case.
• Third-level appeals may be reviewed by a
qualified medical professional assigned by the
state.
• Some plans in some states may require
arbitration to settle disputed appeals
External Review
• Under the new Federal law, plans will have to:
– Allow claimants the opportunity to request an external
review within four months of adverse determination
– Complete a preliminary review within 5 days
establishing:
• That claimant is/was covered by the plan
• That claimant exhausted internal processes
• That claimant provided all necessary information
Then, within 1 day, the plan must indicate to the claimant
whether the appeal meets criteria for external review. If
information is missing, the plan must enable the claimant by
providing instructions and time to re-submit the appeal
correctly.
Once the claim is deemed appropriate for external review, the
plan will forward it within 5 days to an Independent Review
Organization (IRO) for their review. The IRO has 45 days.
External Review
• External Review (3rd level appeals)
almost always require that the dispute
concern the medical necessity of
services
• Also, External Review cases almost
always require that services have been
provided
Fast Facts
• Experts agree that claims denials
represent 15%-20% of your revenue
• More than 50% of appeals are won by
patients and providers
• Residential, Partial, IOP and services
that exceed 15-20 visits are among the
most often denied for coverage
Appeals Processes
 Coordinate with patient. Only one of you should
appeal.
 Note the kind of insurance coverage the patient is
covered by (fully-insured, self-insured plan, individual
policy, etc.) as some of these are exempt from parity,
for instance.
 Request and review plan policies and other
documentation (be prepared!)
 Request and review the medical necessity criteria
used by the plan to arrive at their decision.
 Request and review the specific justification for the
denial. Does it align with the plan’s criteria?
Appeals Processes
 Document the name and telephone number of the
individual you spoke with and note date and time. Ask
if they are recording the call and make a note of the
answer.
 Keep all correspondence including email together.
 Verify that pre-authorization is clearly required for
your services.
 Verify your services are not clearly excluded from
coverage.
Appeals Processes
 Request and review the timetable for
submitting an appeal and that of the entire
process. Some plans require that appeals be
made within 180 days of the adverse
determination.
 Plans are required to respond within a certain
timeframe depending upon circumstances. If
you don’t get a timely response, follow-up!
Appeals Processes
 Precisely follow the process, instructions and use
any forms required by the plan.
 Identify the appropriate person for your appeal.
 Prepare to write a letter with specific consideration
for the clinical needs of the patient as well as the
clinical justification for the service you want covered.
 Include references to standardized screening and
assessment results as well as the individualized
treatment plan.
Appeals Processes
 Include any appropriate references to the parity
law or health care reform. Make sure you
understand what you’re positing.
 Verify that comparable medical services require
comparable utilization review and are subject to
comparable guidelines. It’s the health plan’s
responsibility to demonstrate to you that MH/SUD
services are managed “no more restrictively than”
medical and surgical services.
 Verify that financial and frequency of treatment
limitations are not more stringent for MH/SUD
conditions and services than they are for
medical/surgical.
Appeals Processes
 Request and review the plan’s policies concerning
“scope of service”
 the list of covered conditions
 the list of covered services
 verify that you are a covered provider
 Your appeal will document that you (provider), the service you’re
requesting (level of care) and the condition (patient’s diagnosis
and severity of illness among other factors) are all covered per
the law and the plan’s Evidence of Coverage or Summary Plan
Description.
Request for
Medical Necessity Criteria
• Your name, credentials, business (facility) name,
National Provider Identifier (NPI), physical address,
phone number, email address
• The appeal liaison’s name, address, phone number,
etc.
• The patient’s name, subscriber number (insurance
policy #)
• Date of request for coverage
• Name of UR staff who denied coverage
• Level of Care Requested/Denied
Request for
Medical Necessity Criteria
• Statement that a licensed clinician has determined—using
standardized screening, assessment and diagnostic tools and
evidence-based treatment protocols—that a particular level of care
and course of treatment was medically necessary.
• Statement of need (what would happen if patient did not receive
the treatment services requested).
• Formal request for the medical necessity criteria relied upon by
plan’s utilization review staff in order to reach a decision resulting
in denial of coverage for requested treatment services.
• Request that plan explain clearly how the managed care
processes (including pre-authorization), strategies (including
concurrent review), and evidentiary standards used in making the
adverse determination are/were applied no more stringently for the
MH/SUD services you requested than they are for medical and
surgical coverage requests.
Appeal Letter
• Tailor your wording to use terminology used by plan in
the Explanation of Benefits, Provider Manual, and
Medical Necessity Criteria
• Include references to scientific and professional
evidence supporting the level of care requested.
Sources include ASAM and CSAT.
• Include clinical/medical details supporting your
patient’s condition, diagnosis and need for the service
you are requesting
• Refer to your analysis of the plan’s policies, the law
and the plan’s evidentiary standards in contrast to your
request. Point to what you believe to be the
fundamental problem with the denial and support your
conclusion using the plan’s terms.
Persistence
• Remember there are three levels of
appeal and external review is
increasingly available
• Appeal a second, third and fourth time
• Your state may have an Ombudsman
• Every state has an Insurance
Commissioner
Thank You! Questions?
Patrick Gauthier
Director
888-898-3280 ext. 802
pgauthier@ahpnet.com