Medicare Compliance & Reimbursement

If your practice's rule of thumb is to write off all denials worth less than $10.00 or another low dollar amount, you may want to rethink that policy. It may be time to add up those claims and determine just how much money you could be pocketing through claims corrections and appeals.

To calculate this amount, "your practice could create a special write-off -- TCTA (too costly to appeal) -- to isolate those items that may have been appealable, but you wrote them off anyway, to find out how many low dollar appeals you let slip through your fingers," suggests Barbara J. Cobuzzi, MBA, CPC, CPC-H, CPCP, CENTC, CHCC, president of CRN Healthcare Solutions in Tinton Falls, N.J.

"This is part of denials analysis," Cobuzzi adds. "You may find several claims of a particular type that you can systemize with form letters and fight the denials."

"An appeal is a formal request to the insurance company addressing the denial, describing the proper processing, and submitting documentation for the service and its appropriateness," says Zia Clarkson, a coding, reimbursement, and practice management consultant in Long Island, N.Y. "Not all wrongfully denied claims require that formal process; some just require contacting the payer and having an error reprocessed."

A claim that requires a formal appeal also requires the time to assemble the appeal and track it.

"Therefore, the time investment needs to be worth the reimbursement," Clarkson says. "A $10 denial is worth the telephone call to the payer to have fixed but may not be worth the formal appeal unless there is a large volume of $10 denials."

Keep in mind: "Payers are making millions of dollars just by shorting practices by a few cents here and a few cents there off a fee schedule," Cobuzzi points out.

"Picture them doing this for every procedure they pay and it adds up."

Some practices use sophisticated practice management systems that allow them to enter their fee schedule with a payer and calculate whether the carrier reimbursed them per the fee schedule. If not, the system would alert you that you were shorted, Cobuzzi says.

"When you are being shorted, you can appeal the claims in bulk," Cobuzzi explains. "Call the payer on the carpet for the month's worth of claims that are not paid true to the fee schedule and ask them to account for the disparity in the fees."

"Filing an appeal is a time-consuming process because it must be assembled and tracked," Clarkson says. "If someone is not watching that those appeals are received, processed, and resolved, it is wasteful to send them in the first place," she adds.

Easy tracking tip: If your practice has a billing and collections department, Clarkson suggests that the work of filing and tracking denials can be split among that department's members.

"If the department is small or if there is only one billing person, then an experienced staff member needs to take on those projects. It can't be rotated to other types of staff members," Clarkson says.