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, you may request to your third party plan administrator (TPA) that your case be sent out for external review by an independent review organization (IRO).  How to tell? If your policy document is called a "certificate of coverage," it's a fully-funded plan; if instead you get a "summary plan description," it's a self-funded plan. 

Assemble the Team  Physicians and practice staff should all participate in the audit process, but most invaluable to a successful internal audit are physicians and practice staff with a strong knowledge of CPT codes, guidelines and conventions; the Resource-Based Relative Value Scale (RBRVS); and the payer’s medical payment policy, contracts, fee schedules and reimbursement guidelines. This is the primary audit team.

Depending on the size or complexity of your practice, hire or appoint one or more practice staff with coding knowledge and experience to be responsible for auditing health insurer payments and performing appeals. Though your practice has a hectic schedule, you can successfully find time to appeal claims by managing staff time and resources. Allocate existing staff time for
these important tasks. For instance, set aside scheduled time to work on
medical claim appeal preparation
of every denied claim
 appeals (e.g., one afternoon per week, the last hour 
of everyday, etc.) or identify a fixed time each day to post health insurer explanations of benefits (EOBs) when you can focus without too many interruptions.
Collect Auditing Resources  The practice’s designated staff for claims auditing  will find it necessary to have the full compliment of reference sources including current copies of:
  • Current Procedural Terminology (CPT) book
  • Healthcare Common Procedure Coding System (HCPCS)
  • Medicare RBRVS: The Physicians’ Guide 
  • Principles of CPT Coding 
  • Principles of ICD-9-CM Coding 
  • Medicare’s National Correct Coding Guide
It is also important to have access to all health insurer contracts and relevant source documents your physician or physician group has signed, along with the patient’s benefit verification information. This information is critical to understanding the coverage and payment policies in each health insurer contract and the patient’s benefit verification information.You will find it beneficial to locate and record the following information from each contracted health insurer in your health insurer reference log:
  •  Contract effective date
  •  Fee schedule (e.g., fee-for-service, discounted fee-for-service)
  •  Reimbursement methodology
  •  Name of claims-editing software, if applicable
  •  Multiple procedure/service payment policy
  •  Bilateral procedure payment policy
  •  Claims prompt payment policies and penalties in the contract
  •  Claims submission policies, including the timely filing limits specified in the contract
  •  Medical review policies
  •  Claims appeals processes
  •  Medical necessity definition
  •  Global period definition
  •  Health insurer contact information
You should obtain a copy of your fee schedules during the contracting process. If you do not have access to the fee schedule, call each health insurer to obtain the current fee schedule payment for your 20 most commonly used CPT codes. Getting this in writing or via e-mail from each health insurer will prove extremely helpful for future compliance challenges and for documentation to submit with appeal letters.Obtaining copies of each health insurer contract and keeping them filed in a centralized place will assist you in your claims auditing and appeals processes. When tracking down contract agreements, there may be copies filed in the physician’s office or home and that you cannot locate. If so, call the health insurer’s provider relations department to request a copy.
Denial Management   
Typical problems (with solutions as indicated) are:
Rejected claims: A claim that is not paid due to incorrect information must be corrected and sent to the payer according to its procedures.
• Procedures not paid: If a procedure that should have been paid on a claim was overlooked, another claim is sent for that procedure.
• Partially paid, denied, or downcoded claims: If the payer has denied payment, the first step is to study the adjustment codes to determine why. If a procedure is not a covered benefit or if the patient was not eligible for that benefit, typically the next step will be to bill the patient for the noncovered amount. If the claim is denied or downcoded for lack of medical necessity, a decision about the next action must be made. The options are to bill the patient, write off the amount, or challenge the determination with an appeal.  Some provider contracts prohibit billing the patient if an appeal or necessary documentation has not been submitted to the
To improve the rate of paid claims over time, medical insurance specialists track and analyze each payer’s reasons for denying claims. This record may be kept in a denial log or by assigning specific denial-reason codes for the practice management program to store and report on. Denials should be grouped into categories, such as:
• Coding errors (incorrect unbundling, procedure codes not payable by plan with the reported diagnosis codes)
• Registration mistakes, such as incorrect patient ID numbers
• Billing errors, such as failure to get required preauthorizations or referral numbers
• Payer requests for more information or general delays in claims processing
The types of denials should be analyzed to find out what procedures can be implemented to fix the problems. For example, educating the staff members responsible for getting preauthorizations about each payer’s requirements may be necessary.


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, you may request to your third party plan administrator (TPA) that your case be sent out for external review by an independent review organization (IRO) How to tell? If your policy document is called a "certificate of coverage," it's a fully-funded plan; if instead you get a "summary plan description," it's a self-funded plan.

Know Your Coverage and Your Rights Before you call customer service or ask for an internal review, make sure you know what your health plan does and does not cover -- and what procedures you must follow in order to get coverage in the first place. Carefully read the Certificate of Insurance (if it's a fully-insured group)) or Summary Plan Description (self-insured group) as well as the plan's Evidence of Coverage, the detailed description of the plan. You can get the Evidence of Coverage from your employer. If you are self-insured, get a copy from your insurance company.
Make sure you have the most recent copy of your plan's benefits booklet, which should include the specific exclusions and limitations to your plan.
Once you've armed yourself with the appropriate information, you can:
  • decide whether your complaint is worth pursuing (for example, if your health plan requires you to get a referral before seeing a specialist, and you failed to do so, your attempt to get coverage for the specialist's visit will most likely be a waste of time), or
  • point to the relevant part of the contract when arguing that the health plan erred in denying coverage.
Keep in mind that you can avoid some health plan disputes by learning about the details of your health plan before you use it.
Call Customer Service  If you disagree with a health plan charge or coverage decision, you should start by calling customer service. Customer service agents may be able to reverse an erroneous charge or approve services that were originally denied. If the agent can't help, ask to speak with a supervisor. Sometimes the agent will ask you to submit more documentation (like a letter from your doctor) or resubmit documents the plan claims not to have received.
Notice of Denial  If your complaint involves a denial of coverage or refusal to authorize services, ask the health plan for a letter that gives you notice of the decision and an explanation of the health plan's position. Is it urgent? If the denial is for a pre-service and the doctor believes the situation is urgent, the insurer will review the appeal faster than if it's not an urgent medical situation. This is called an "expedited" appeal. These could be handled by the insurance company or sent for an external review by an Independent Review Organization (IRO).

An expedited appeal can be filed if the patient is currently receiving or was prescribed to receive medical services or treatment; and has a situation that is described as "urgent" by the doctor. Urgent means he or she believes a delay in getting these services could seriously jeopardize the life or overall health, or the ability of the patient to regain maximum function.

An expedited cannot be filed if the patient already received the services or treatment and your health insurance company denied claim or the situation is not urgent. The doctor or medical provider decides if the situation is urgent The patient or someone authorized can call the health insurance company to file an appeal verbally or in writing. The health plan may respond with a verbal decision but must put that decision in writing within 72 hours of receiving the request.

Internal Review  If you believe your health plan was wrong in making a coverage or payment (you received a denial EOB) decision -- including denying coverage, refusing to authorize certain treatment, or billing for questionable charges -- you have the right to formally request that the health plan take another look at your situation with a internal review. All health plans are required to provide the opportunity for an internal review or appeal if a plan participant disputes a course of action. If you disagree with a decision made by your health plan, an internal review is an excellent (and often necessary) first step toward getting the results you're looking for.

Before you file for an Internal review, there are some preliminary steps you can take to resolve your dispute informally and ensure that you have all the information that's necessary for a proper appeal

  • Create a phone log including:
  1. The telephone number and date
  2. Who you talked to
  3. What was said regarding
    medical claim appeal preparation

  • Gather personal information:
  1. Patient contact information (name, mailing address, phone number)
  2. Contact information for the person representing, if applicable (such as an attorney, parent or guardian
  3. Name of the company or group providing the health plan
  4. Policy number and, if it applies, claim numbers
  5. If the plan is through an employer, the name and location of the employer
  6. Names of doctors or providers who provided care or who gave an opinion or recommendation
  7. Any explanation of treatment or services from the medical provider's office.
  8. Criteria the insurance company used to base its decision. This is shared with the doctor in order to provide the information needed for the service to be covered.
  9. Any research to support the opinion that the denial should be overturned  

Develop Appeal Letter(sAfter you have the generic internal appeal letter, add the appeal letter that addresses the specific denial reason:

Related Resources:
2. "Fighting health-insurance claim denials", Larry Getlen, Bankrate (2010).

Bonnie Drew was a successful attorney working for the federal government authorizing benefits for people with disabilities and social security. After developing a rare disease and being denied adequate health insurance coverage, she now finds herself in the same boat as many of her former clients - how to properly go about medical claim appeal preparation for her denied claim. She is advocating for a single payer healthcare system in the U.S.