Supporting Patients in Appealing Claim Denials Is Worth the Effort
By Joy Stephenson-Laws, Managing Partner
Providers are now reaching some level of “new normal” with the pandemic becoming more of an endemic. They can identify challenges to improve their margins as quickly as possible.
Many are seeing a concerning picture.
Before the pandemic literally threw providers into operational survival mode, I wrote about the importance of partnering with patients to reduce pre-certification denials. In that blog, I talked
about how payor-denied claims continue to top the list of threats to a healthcare provider’s financial wellbeing and how working with patients to avoid pre-certification and pre-authorization denials can positively impact a provider’s bottom line.
And while this effort is indeed important, it is usually limited to what a provider can do before medically necessary services are billed. Just as critical to protecting a provider’s financial health, and something that data indicate is greatly underutilized, is working with patients to appeal
insurance denials after a service has been submitted for reimbursement.
Some hospitals have been reporting an increase in denial rates with over a third reporting rates approaching 10 percent. Given these denial rates, what is quite surprising is that only about 0.2 percent of medical insurance denial claims are appealed by patients. It also is counterintuitive given that, by some estimates, around 50 percent of these appeals are eventually successful. This success rate may even be higher for self-insured employer plans.
If you consider that roughly 95 percent of patients do not pay their hospital bills in full, resulting in provider write-offs and reduced margins, anything that may reduce that percentage is worth considering. These write-offs can easily top $3 million per median-size provider and this amount can make the difference between a healthy margin and one that could threaten the viability of a provider.
Unfortunately, the current situation of patients not being able to pay their medical debt is not about to end any time soon. According to the U.S. Census Bureau, 19 percent of American households could not afford to immediately cover their medical care. Another alarming statistic is that at least 50 percent of all Americans now have some medical debt and almost 60 percent of these owe at least $1,000. More than half of consumers now have “high deductible” insurance plans so the potential exposure for providers could readily increase in the coming years.
The good news is that many patients nationwide have the right to appeal a health insurance claim denial and the process is deliberately simple and straightforward with patients being able to submit the following two types of appeals:
Internal appeal: A patient may appeal a health plan’s decision through an “internal appeal.”
This is the first step and is a process in which the patient asks their insurance company to do a full and fair review of its decision. The appeal should always be submitted in writing (and the patient should retain a copy for their files). When the health plan receives the request, it is required to review and explain its decision. The health plan must also let the patient know how to disagree with its decision. The plan is required to start and complete this process in a timely manner.
External review: If the health plan still denies payment or coverage, the law usually permits the patient to have an independent third party uphold or overturn the plan’s decision. This final process is often referred to as an “external review.” A health plan must include
information on the denial notice about how to request this review. Note that some group plans may require more than one level of internal appeal before a patient can request an external review.
Many states have agencies that will help patients file an appeal or request a review of their health plan’s decision.
So Why Don’t Patients Appeal the Denials?
Given the potential financial benefits of appealing a health insurance claim denial, and the relative ease of doing so, why do most patients just accept the denials at a great financial cost to them and to their providers? One is that many probably simply do not know that they have this right. While claims denial notices are supposed to let them know about this right, not all do and if they do, it may be included in a way that a patient may overlook it. A payor has little incentive to draw attention to this right let alone promote it.
Another reason is that while the process may be straightforward, understanding exactly why the claim was denied and then gathering all the information needed for an internal or external review can be daunting to most patients. A cursory look at a typical explanation of benefits report (EOB) lists no fewer than 12 different codes with some specific to the patient’s individual plan and others used as industry standards. The patient also will need to put together all supporting information as to why they believe the denial was in error and should be reversed. To successfully do this, the patient will invariably need to reach out to their provider(s) to help prove medical necessity, for example. It is also possible that the denial is the result of miscoding on the part of the provider, which they would need to correct.
A patient should also work closely with their physician and/or hospital on a denial as the provider may be submitting its own appeal as well. Very often a dual appeal by both a patient and provider increase the likelihood of having a health plan overturn its initial decision.
Empowering
Our Team at SAC with Peter Crone, The Mind Architect.
At the Law Offices of Stephenson, Acquisto & Colman, we believe that supporting our team is essential to the exceptional service we provide our clients.
How Providers Can Support Patient Appeals of Claim Denials
Since providers have a financial stake in a patient’s winning a claims denial appeal, they should not only take steps to ensure that patients know they can appeal a denial but also be willing to do what they can to facilitate any appeal. Some steps they can take include:
Have an established patient advocate program with a multi-lingual, multicultural team that is well versed in all areas of claims management, including appealing claim denials, and participating in “peer-to-peer” insurance reviews
Produce and distribute materials explaining the appeals process as well as the types of denials that may be appealed, for example, pre-existing condition, outside-of-network care, “experimental” treatment, or not “medically necessary” treatment and include them with patient statements
Produce and provide necessary support documentation in a timely manner to patients at no cost to them (this is a small investment on the part of a provider which can generate an attractive ROI especially given that in one state 80 percent of cases denied as “experimental” or “investigational,” for example, were reversed) Offer to serve as the patient’s representative for filing an external review on their behalf and then follow-through with the process and especially keeping an eye on time limits for appeal filings
While supporting patients in their individual claim denial appeals processes – or taking over the processes for them – places an additional burden on a provider’s time and human resources, the odds for success are clearly in the patients’ favor. So, if faced with the choice of leaving millions of unrealized revenues on the table or investing in helping a consumer win a claims denial appeal, the latter is clearly the right path for provider and consumer alike.
In October, we offered our staff—and their loved ones—a unique experience with Peter Crone, The Mind Architect, at our Breaking Barriers: A Mindset Breakfast. Known for his transformative approach to personal growth and mental resilience, Peter joined us to guide over 140 staff members and their guests through meaningful conversations on managing stress, cultivating positive thinking, and harnessing the power of language to shift mindsets.
This quarter’s Spotlight is on Partner, Charles J. Acquisto.
What is your area of expertise within SAC?
I am overseeing our Third-Party Liability and Workers Compensation departments while expanding our law firm’s footprint in the Southeast.
What one piece of sage advice can you offer to our clients that can help them in the future?
There is no such thing as too much documentation and nitty-gritty detail when it comes to claims. The secret sauce to achieving a better revenue cycle is making sure all active claims are timely submitted, documented and, if denied and underpaid, moving quickly with appeals to possible legal action. It is vital to know the appeal and legal deadlines as outlined in the contract’s Dispute Resolution Provision.
Can you talk about a recent success story of yours?
What was the challenge and how were you able to overcome it?
In our age of technology, we often forget how effective a telephone call is. I just resolved a claim that was underpaid by seven-figures by making a call to the Department of Labor, speaking with an adjustor to discuss and listen to how the claim could be resolved. Working with our client, I was
Throughout the morning, Peter shared insights on how shifting mindsets can positively impact our work, well-being, and relationships. His approach encouraged our team to reflect on the words they use and the beliefs they hold, empowering them to reframe challenges into opportunities for growth. While Peter led the session, there were opportunities for participants to chime in, ask questions, and engage directly, creating a rich and interactive experience. Our staff left with valuable tools to bring
able to move the claim thru the process to achieve the desired expected reimbursement. We can all be guilty of falling into modern technology that removes the personal human element out of solving a problem.
Do you have any hobbies or interests outside of work?
I love to run as a way to enjoy the great outdoors and stay healthy. I consider myself a bit of a modern shutterbug, as my old Canon 35mm camera has now been replaced by my iPhone camera. I combine my love of photography with the joy of travel, having ventured to England, Scotland, Greece and Croatia in the past year. I am spoiled living in a vacation destination, so I love escaping to Kiawah and Folly Beaches. I still have a sports passion, having been a newspaper reporter in a past life. Finally, live country music has been a huge part of my life since moving to Charleston in 2021. There is nothing like catching the magic of an engaging, talented musician or band. I have been fortunate in the last few years to catch Kenny Chesney, Luke Combs, Dierks Bentley, Lainey Wilson, Old Dominion, Jason Aldean, Eric Church, Tyler Hubbard, Bryan Adams, Niko Moon, Luke Bryan, Tim McGraw and Sam Hunt in concert.
Do you have any charitable causes that interest you and events you have participated in recently?
As a member of the Knights of Columbus and a chancellor, it is wonderful to find local charitable causes to assist. Most recently my local Knights council has been working hard to assist relief efforts for victims of Hurricane Helene in the Carolinas and Georgia. We also assist many of our local causes in the Lowcountry. I have donated proceeds from the sale of my books Wisdom to Grow
a mindset of positivity, resilience, and focus into their daily lives—qualities that they carry forward in the dedicated work they do for our clients. This is just one way we invest in our team’s growth, knowing that a fulfilled, focused team is at the heart of our firm’s commitment to providing exceptional support and service to you, our clients.
On and Wisdom for a Young Golfer to The Good Tidings Foundation and The First Tee respectively.
Do you have family and/or pets you’d like to tell us about?
I have a son who is living and working in New York City after graduating from Fordham in 2023 and a beautiful daughter who is a junior at Cal Poly San Luis Obispo. Sadly, my dog Casey recently journeyed over the Rainbow Bridge after giving me the most amazing 14 years of friendship and love. Our cross-country trip in 2021 was straight out of John Steinbeck novel.
Do you have any guilty pleasure television shows, movies or other activities to tell us about?
Guilty pleasure would be watching The Golden Bachelorette/Bachelor show with my girlfriend. My favorite TV shows are Mad Men, Spin City, Cheers, Rescue Me and Yellowstone. I am a sucker for Christmas movies, Bill Murray flicks and historical films. Of course, every time I see My Cousin Vinny, I think of my late Dad. He proclaimed the film his all-time favorite, bumping out The Wizard of Oz. I would be remiss to leave out my mom’s all-time fave, The Sound of Music.
What are your favorite foods? Colors? Other favorites?
I am a pizza hound, preferring a great New York City-style with Grimaldi’s being my go-to here. I love a hamburger, French fries, southern barbeque, beer-steamed shrimp with Old Bay, Maryland crabcakes and Mexican food. Now you understand why I still run. I tend to wear a lot of blue colors, but do not have a particular favorite as the season dictates color choices. Living in the South, we have two seasons: long pants with shoes and shorts with flip flops.
December
11,
2024 – Illinois AAHAM 2024 Annual State Institute
SAC attorney, Kenneth Dusold, will be speaking at the IL AAHAM 2024 Annual State Institute on December 11, 2024. Kenneth will provide valuable updates from the Illinois Health & Hospital Association for 2025, offering insights to help healthcare organizations prepare for the year ahead.
Location: Holiday Inn & Suites East Peoria, an IHG Hotel, 101 Holiday Street, East Peoria, IL 61611
To register, please visit: illinoisaaham.com/meet-reg1.php?id=7
Richard Lovich Appointed to Shape Healthcare Law with ABA
We’re excited to share some exciting news from our team! Our Co-Managing Partner, Richard Lovich, has been selected to serve on the American Bar Association’s Health Law Section Policy Working Group!
In this esteemed role, Richard will contribute to developing critical lobbying positions on healthcare law for the ABA, helping shape the future of healthcare legislation. Congratulations Rich on this incredible achievement!
All articles are written by the SAC Litigation team. The SAC Litigation team includes attorneys, nurses and physicians with extensive experience in all areas of law related to healthcare matters. Additionally, SAC partners hold legal advisory positions with healthcare organizations and sit on the boards of numerous healthcare-related organizations, and monitor all outgoing SAC client marketing materials and related content.
We would love to hear from you! If you have questions, comments or feedback, please email us at SACReview@sacfirm.com.
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