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OverviewDenial Management:
Disputing the Decisions that Affect Your Bottom-Line
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
Therapeutic Relationships,
Treatment Plans & Continuity of Care
Health Insurance Law, Regulations, and Managed Care Policies
Your Organization’s Revenue Management and Financial Future
Evidence-Based Practices and
Guidelines
Effective treatment that produces
positive outcomes
Laws, regulations and policies that are understood and complied with
Fair reimbursement and consistent cash flow so all of your financial objectives can be met
Guidelines that clinicians on both ends of the
equation understand and agree to
Our Goals for Denial Management
Unfortunately, we can’t rely
on X-Ray images
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 third-party 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
Pre-Authorization Concurrent Review
Concurrent Review
RetrospectiveReview
Denials and Appeals
Denials of reimbursement can occur for administrative and/or medical necessity reasons at the time of claims adjudication/processing
Denials of coverage and/or benefits can occur at various Utilization Management or UR
junctures throughout the episode
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 ProcessRemember:
• 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. The plan’s Customer Service department, Utilization Reviewers’ supervisors, the Medical Director and Director of Appeals and Grievances
2. Insurance Agents and Brokers representing the patient’s employer
3. 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 informationThen, 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
