Pulmonology Coding Alert

Stay aware of the appeal window to improve your success.

Winning appeals can result in a significant increase to your practice’s bottom line. If you feel your practice deserves reimbursement even after a denial, apply these five practice-proven tips to give your appeal its best shot.

Benefits of Appealing Your Practice’s Denials

“Denials are rising. Since 2016, the average denial rate was 9 percent and as of the second quarter of 2020, it had risen to 10.8 percent,” said Holly Ridge, BSN, RN, CPC, CPMA, manager of medical necessity and authorization denials for Duke Health in Durham, North Carolina, during AAPC’s HEALTHCON 2022 session, “Medical Necessity Denials — When and How to Appeal.”

Ridge explained that even though the denial rates are increasing, practices who appeal their denials are successful, on average, approximately 40 to 45 percent of the time. This high success rate can translate to a substantial return on investment (ROI) depending on the services your team is appealing.

Tip 1: Ensure Your Codes Help Show Medical Necessity

A provider must show the medical necessity in the documentation and coding to receive reimbursement for the services performed. Without that crucial information, Medicare or commercial payers won’t authorize payment and may deny the claim. When a denial comes across your desk, you should review the information, include any missing information, and ensure the codes assigned show medical necessity for the procedures.

Example: During an evaluation and management (E/M) visit, a patient experienced an acute exacerbation of their moderate persistent asthma. The physician administered albuterol, which the patient responded to well. On the report, the coder assigned the following codes:

• CPT^®: 99213 (Office or other outpatient visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and low level of medical decision making. When using time for code selection, 20-29 minutes of total time is spent on the date of the encounter.)
• CPT^®: 94640 (Pressurized or nonpressurized inhalation treatment for acute airway obstruction for therapeutic purposes and/or for diagnostic purposes such as sputum induction with an aerosol generator, nebulizer, metered dose inhaler or intermittent positive pressure breathing (IPPB) device)
• HCPCS Level II: J7609 (Albuterol, inhalation solution, compounded product, administered through DME, unit dose, 1 mg)

The patient’s commercial insurance denied the claim because the claim didn’t show medical necessity for the albuterol administration. By revising the claim to include J45.41 (Moderate persistent asthma with (acute) exacerbation), you’re showing the reason for the albuterol administration.

“There are some medical necessity denials that are going to need an appeal and medical records to support reimbursement, but sometimes your medical necessity denials may be able to be corrected by taking a second look at that coding and see if there are any coding updates you can make,” Ridge says.

Tip 2: Promote Consistency With Templates

“I very strongly recommend having templates. It makes it easier on yourself, it also provides ease of workload,” Ridge said. By having templates available, your staff will be able to plug the necessary information into the appropriate places and ensure each appeal is formatted similarly.

Examples of templates for different types of denials include:

• Authorization denials
• Medicare denials
• Commercial payer denials

“Templates look cleaner, more organized, and can look more professional. Templates can also help provide content reminders to staff as they write their appeals,” Ridge added.

Tip 3: Prepare Your Case

Before submitting your appeal, you’ll need to defend your reasoning for reimbursement. “You really want to pull in any argument you can find that supports the safety and efficacy of providing the service that you’ve rendered,” Ridge stated.

Types of resources to use in your appeal with examples include:

• Payer policies: Medicare national coverage determi­nations (NCDs) and local coverage determinations (LCDs), commercial payer policies, Medicare Advantage policies
• Nationally recognized criteria: InterQual, Milliman
• State and federal regulations: Affordable Care Act (ACA), state definition of medical necessity, Emergency Medical Treatment and Active Labor Act (EMTALA), state laws
• Society guidelines/medical literature: AMA, American Lung Association, National Comprehensive Cancer Network (NCCN)
• Miscellaneous: NCCN guidelines, peer-reviewed journals, extenuating circumstances

As you compare the different resources available to back up your appeal, you may need to consider costs of information. Some nationally recognized criteria may require a subscription fee, but medical literature and medical society guidelines could be available free of charge.

“[Medical literature and society guidelines] are free, they’re very reputable, they’re widely accepted as the standard of care, and they’re accessible,” Ridge said.

Tip 4: Stay Aware of Your Appeal Window

When a claim is denied, you’ll have a certain timeframe in which you can appeal the denial. This appeal window may be between 60 and 180 days, or it could be as short as 30 days. The appeal window timeframe varies by payer, so it’s crucial to examine the information you receive with the denial as well as the individual payer’s preferences.

Work queues may allow you to use a type of scoring to prioritize payers with a short appeal window. However, if you work manually, you’ll want to educate your staff on which payers have shorter appeal windows, so your staff doesn’t miss the deadline.

Tip 5: Analyze Your Denials

One of the easiest ways to reduce your denials is by preventing them from the start. This can be done by analyzing your denials data. When you examine your data, you may find denials that were avoidable and preventable by making minor changes before the claims were originally submitted.

At the same time, your analysis could show which types of appeals were successful and which denied services payers approved after a successful appeal. In those instances, you should continue to appeal those denials.

Plus, by analyzing your denials, you can focus on what to prioritize during appeals, as well as what improvements your practice can make on the front end through education, proper coding, and documentation to reduce the number of denials you receive.