Managed Care Contract Negotiations
Jul 07

Scrutinize denials for reasons, check plan procedures

The following is an excellent article from the Managed Care Contracting and Reimbursement Advisor.

Managed Care Contracting & Reimbursement Advisor tells you exactly what you must know and do to successfully negotiate the best deal with HMOs, PPOs, and other payers – and get bigger and faster reimbursement!

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If you receive a denial based on medical review (i.e. utilization management and/or medical necessity review), there is something you can do. If you detect that a plan is cutting corners, you can take certain steps to improve your chances of successfully appealing the denial, or even getting the claim paid in full without having to appeal

The plan should specify when a denial is based on medical review. But it may not, and the Explanation of Benefits (EOB) may not make the reason for denial obvious. So you should carefully review all denials to identify those based on medical review.

Such denials may include:

  • Denials based on medical necessity, such as denying plastic surgery as elective, not reconstructive;
  • Recharacterizations of a claim to a lower paying level of service, such as downgrading an office visit as less comprehensive;
  • Recharacterizations of claims from “inpatient” to “outpatient” or “observation”;
  • Denials of readmissions to the hospital;
  • Denials of emergency services on the grounds that there was no emergency; and
  • Combining different treatments or procedures, such as bundling an admission with a previous admission.

Also, be sure to check whether plan followed denial procedures. Once you identify a claim that has been denied on the basis of medical review, check to see if the plan complied with all state laws, accreditation requirements, internal procedures, and other applicable requirements when it denied the claim.

For example, if your state requires the plan to supply you with a copy of your state’s independent review procedures with the denied claim, did the plan give you that copy?

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →