November 20, 2017


 
Internal Appeal

   Providers

An internal appeal is a first request to have a claim reconsidered after the health insurance company denied it. It is usually conducted “in-house” using the healthplan's clinical reviewers. Some plans now outsource their internal appeals to an independent review organization (IRO). Internal appeals for fully-insured plans are self-regulated by the health plan. On the other hand, self-funded plans are controlled by a third party administrator (TPA). To get ready to file an internal appeal, they must follow the Department of Labor - Employee Benefits Security Administration (DOL-EBSA) regulations. See the box here.

 
Run Monthly Claim Report  The report lists each claim that the health insurance company denied or has not paid beyond the state statutory time requirement as well as detailed information regarding the claim. It may be based on the patient’s date of service or the claim bill date. It is useful in detecting a health insurer’s chronic non-payment practices that may warrant further action. A health insurer follow-up log is the next step in the process in order to review the health insurer Explanations of Benefits (EOB's) and identify the reasons for non-payment. Then final reports are generated regarding these submissions and distributed to the auditing team to ensure appropriate attention to the delinquencies.
 
Review the EOB's  By closely reviewing the health insurer’s explanation of benefits, the auditor sees the health insurer’s reason for their partial payment, delay or denial of the claim. The first priority in determining the basis of a claim denial is to identify each EOB that lists a zero amount as the approved charge for a procedure or service. This means the health insurer did not make a payment for the claim submitted. Next, find out why the health insurer determined a charge for the submitted claim was not allowable by reviewing the EOB’s remarks or description field.
 
The second priority is to review the claims that list a payment adjustment and determine whether the health insurer made the appropriate adjustment. The provider can determine whether the health insurer’s adjustment was appropriate based on the health insurer discounted payment fee schedule.Keeping a health insurer reference log that lists the agreed upon discounts for each health insurer may prove helpful in identifying so-called rental network PPO activity and other inappropriate discounts. 
 
Identify Denial Reasons  By accurately auditing the EOB's, the reason the initial claim submitted was either inappropriately reimbursed, denied, delayed or partially paid becomes clearCommon reasons include:
  • Physician practice processing error(s) and/or lack of supporting documentation
  • Health insurer processing error(s)
  • Application of a CPT modifier, code, or guideline for each procedure the physician performed (e.g., downcoding, bundling, lack of recognition of a modifier)
  • Application of fee schedule allowance when there is a contract with the health insurer
  •  Application of PPO discount when you do not have a contract with the health insurer (e.g., rental network PPO)
  • Medical necessity denial
Gather Supporting Documentation  To corroborate reversal of the insurer’s determination through the claims appeals processes,  the practice reviews the recommended health insurer auditing resources. These resources will help develop the supporting rationale for the appropriateness of the procedures recorded on the initial submitted claim, such as the:
  • Health insurer contract or medical payment policy that supports the procedures listed
  • CPT guideline 
  • Operative note that explains the separate and identifiable procedures and services reported
  • Previously approved claims that are similar to the those that the health insurance company denied to support overturning a health insurer’s frequent partial payments or denials are also sited. 
 
Develop an Appeal Letter The steps: 
  • review the contract for the claims appeals processes and monitor the health insurer’s compliance. Some health insurers may require specific forms for submitting claims appeals. 
  • Prepare a  generic internal appeal letter that includes the patient’s name, subscriber’s name, health insurer identification and insurer numbers, date of service and the reason that the denial is being challenged.
  • Add/ incorporate the letter below that addresses the specific denial reason:
  1. Non-Covered Cosmetic 
  2. Drug Denial 
  3. Drug Non-Formulary 
  4. Out of Network 
  5. Timely Filing
  6. Non-Covered Service
  7. Incorrect Procedure Code
  8. Incorrect Diagnosis Code
  9. Incorrect Place of Service
  10. Bundling
  11. Wrong Plan
  12. Usual and Customary
  13. Emergency Room
  14. Non-Participating Provider
  15. No Authorization
  16. Not Medically Necessary 
  17. General Exception 
Submit Documents  When you file your internal appeal, be sure to include the above letter(s) and all documents that support your position. These may include:
 
  • additional research on your medical condition (including treatment guidelines and medical journal articles)
  • additional research on the cost-effectiveness of the applicable treatment or procedure, and
  • evidence of payment (for billing disputes).
  • medical records
  • letters from your doctors (i.e. explaining why certain treatment or procedure should be covered)
  • second opinions (opinions from doctors other than your own as to what treatment or procedure is necessary)
  • explanation of benefit (EOB) forms applicable to your claim
  • references to the applicable sections of the Evidence of Coverage
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    Insureds
     

    If customer service does not reverse the health plan's decision, it's time to file a formal internal appeal. Health plans - be they self-insured or fully-insured - must provide members both an internal and an external appeal process. The internal appeal may have no more than two steps: a first-level and a second-level (if required) internal appeal. In many health plans, internal appeals are reviewed by clinicians and staff who are employed by the health plan. (See the box here for the specifics of your plan and consult with the plan administrator). 

    Getting Ready  The key to success in an internal appeal is preparation (see previous page). Review your plan contract (Evidence of Coverage). It will contain details on how to file for an internal review. Be sure to comply with all of the requirements, otherwise you'll give the plan an easy way to deny your request. 
     
    Know the time limits because the time period in which you must file your appeal varies between health plans. Make a note on your calendar, and then file your appeal within the specified period. If you miss the deadline, you may lose your right to fight the decision, and you may be barred from a later external review as well. 
     
    Submit Documents  When you file, be sure to include the internal appeal letter(s) and all documents that support your position. These may include:
     
  • additional research on your medical condition (including treatment guidelines and medical journal articles)
  • additional research on the cost-effectiveness of the applicable treatment or procedure, and
  • evidence of payment (for billing disputes).
  • medical records
  • letters from your doctors (i.e. explaining why certain treatment or procedure should be covered)
  • second opinions (opinions from doctors other than your own as to what treatment or procedure is necessary)
  • explanation of benefit (EOB) forms applicable to your claim
  • references to the applicable sections of the Evidence of Coverage
  • Attend the Hearing  Some health plans hold a hearing at the second level of internal appeal. Get someone -- a friend, family member, advocate, or even a lawyer -- to help you prepare for the hearing. This person can also attend the hearing to support you. Sometimes arbitration replaces one of the review levels in an internal appeal. In arbitration, you and the health plan make arguments and present evidence to a neutral third party who then makes a decision as to how the dispute should be resolved.

    The Health Plan's Response  The health plan is required to respond to your appeal within a certain time frame. Again, check the Evidence of Coverage for specific time limits under your plan. Federal law governs response times for certain health plans: 30 days if the disputed medical service has not been provided and 60 days if it has been provided. You can ask for an expedited response if you feel you will suffer adverse health effects by not receiving treatment under the timelines specified in your plan. 
     
    Usually, the health plan must respond within 72 hours to an expedited appeal. If the health plan does not respond to your appeal within the specified time limits, go ahead with the next step in the appeal process (the second level of the internal appeal or an external appeal).  If your request is denied at both levels of the internal review process, you may be able to obtain an independent review called an external appeal. 
     

     
    Related Resources:
     
    1. "

    Appealing Health Plan Decisions"

     , Healtcare.gov (2011)
     

     
       
    After a health insurance company denied a claim and if the internal appeal was also unsuccessful, an external appeal with an Independent Review Organization (IRO) is next on the appeal trail. This video explains the functions of the IRO.