July 13, 2020


The passage of the 2010 healthcare reform meant fundamental changes to medical claim appeal preparation that providers need to be aware of and follow when preparing to appeal a mispaid claim. Depending on whether the patient is insured under a fully-funded or self-funded healthcare plan, different laws regulate the appeal process. For fully-funded health plans, the appeals process eventually goes through the state bureau of insurance. For self-funded health plans, The plan is administered by a Third Party Administrator and ERISA oversees the appeals process including external review by an independent review organization (IRO). If that's confusing (most likely), see below and refer to your policy document. It's in there. Also, if the document is entitled "certificate of coverage," it's a fully-funded plan. If instead you have a "summary plan description," it's a self-funded plan. 

 Question:    Fully-funded Plan: Self-Funded Plan:
Who decides on the internal 
appeals process?
Your health insurance providerThird-party administrator (TPA) working on behalf of the self-funded employer 
Who conducts internal appeals?Reviewers employed by your health insurance provider or an IROClinical reviewers working for a third-party administrator or an IRO
Who regulates external reviews?Your state insurance commissioner except for Alabama, Mississippi, Nebraska and North Dakota which follow federal external review 
Regulated by ERISA under the U.S. Department of Labor
 Who conducts external reviews? An IRO approved by your state 
insurance commission
An IRO accredited by URAC or other credentialing organization
Life of a Claim (Part 3)


1. Assemble the Appeals Team Appoint the auditing staff and educate them.

2. Collect auditing resources - CPT book, ICD-10 book, insurer fee schedules, etc.

3. Run monthly collection reports - The report lists each claim that the health insurance company denied or has mispaid.

4. Review the EOB collection report By closely reviewing the health insurer’s explanation of benefits, the auditor(s) designate the denied or underpaid claims that are worth taking further action on under their appeal guidelines.

5. Identify the health insurer basis for the denied, delayed or partially paid claim - Physician practice audit team sees the health insurer’s rationale for their partial payment, delay or denial. 

6. Gather supporting documentation- Any applicable information to help to corroborate reversal of the health insurer’s determination through the health insurance appeals process is researched and assembled.

7. Develop an appeal letter  - After you have the generic internal appeal letter, add the letter of appeal to insurance that addresses the specific denial reason:

External Review

8. Maintain a health insurer follow-up log - This contains all the appeals that have been submitted and are currently pending.

9. Hold claims processing and review meetings - This keeps the team and other practice staff on the same page regarding appeals and provides improvement opportunities.

10. Appeal Again. - If inappropriately denied, delayed or partially paid again, make use of the external independent grievance mechanism.

Related Resources: 
2 "Insurance Claim Denied? 4 Ways to Fight Back and Get Health Insurance Coverage" , Allie Mendoza, S F Examiner (March 18, 3012).
Changes to the health insurance appeal process according to the 2010 Patient Protection and Affordability Act are explained. Don't forget to use the correct letter of appeal to insurance.