Creating a denial management escalation process isn't just a luxury—it's a necessity for any practice serious about getting paid. Denials left unresolved tie up revenue and drain resources. Let's dive into how to build a tiered system to handle those stubborn denials that don’t bow to standard appeals.
Why Tiered Escalation Matters
Denials are inevitable. But not all denials are created equal. Some fall away with a simple claim correction or resubmission. Others? They dig in like ticks. These sticky denials require more than just routine attention. Without an escalation process, they may linger indefinitely, costing practices thousands—or even millions—of dollars in lost revenue.
Recognizing When to Escalate
Before diving into the mechanics, it's important to recognize when escalation is warranted. Payers can be notoriously opaque. But common scenarios that signal escalation include repeated rejections of the same claim, persistent requests for additional documentation (especially after you've already submitted it), or ambiguous denial codes that don’t quite match the situation.
Example: When dealing with denial code CO-197 ("Precertification/authorization/notification absent"), how many times have you resubmitted the necessary documentation only to face another denial? If you've crossed that line twice, it’s time to escalate.
Building a Tiered Escalation Process
Level 1: Initial Review and Correction
Start with the basics. Review the denial for any obvious errors or omissions. This often involves verifying patient information, coding accuracy, and ensuring all prior authorizations are in place. It’s surprising how many denials stem from simple data entry mistakes—an incorrect patient ID or transposed diagnosis code can create havoc.
Level 2: Peer Review
If initial corrections fail to resolve the denial, escalate to a peer review. Here, another biller or coder reviews the denial and the claim. A fresh pair of eyes can sometimes catch issues the original biller missed. This is also where you should reassess the denial code and documentation sent to the payer—sometimes, you’ll find a mismatch between the two that’s easily rectified.
Level 3: Supervisor Intervention
When denials persist after peer review, involve a supervisor. Supervisors often have more experience with complex issues and can spot patterns that suggest larger systemic problems, like payer-specific quirks. They can also authorize adjustments or write-offs when warranted.
A pro tip here: Have your supervisors maintain a "quirks list"—noting specific payer behaviors like Aetna’s tendency to require additional documentation for otherwise straightforward procedures. This can prevent future denials.
Getting Payers to Play Ball
Level 4: Payer Contact
Once the claim reaches this level, it's time to initiate direct contact with the payer. This stage requires a detailed understanding of the denial and all associated documentation. Be ready for long hold times—some payers seem to think the waiting game will discourage follow-up. Persistence is key.
When making these calls, always have claim details on hand—patient demographics, service dates, and proof of any prior communications are vital. If possible, record the call (where legal) or take detailed notes, capturing the representative's name and any reference numbers provided.
Level 5: Formal Dispute
Still not seeing movement? Launch a formal dispute. This is where creating a detailed appeal letter, outlining the history of the denial and every step taken to resolve it, pays off. Attach every piece of supporting documentation.
Use certified mail with return receipt requested to ensure the payer can’t claim they "never received" the package.
Level 6: Legal Involvement
For denials that persist through all these levels, legal intervention may be necessary. This isn’t about moving straight to lawsuits—rather, introducing a legal perspective often nudges payers towards resolution, especially when contractual obligations are involved.
Documentation: Your Best Ally
Throughout this process, meticulous documentation is crucial. Every action, every call, and every piece of correspondence should be documented and stored in an easily accessible format. This documentation serves as both a roadmap and a shield, protecting your practice if disputes escalate further.
An Ounce of Prevention
Finally, while a robust escalation process is crucial, prevention is better than cure. Regular training for staff on coding updates, payer-specific rules, and documentation requirements can reduce the volume of denials. Similarly, building relationships with payer representatives can provide insights that preempt unnecessary denials.
Creating a functional denial management escalation process is not about bureaucratic box-ticking. It’s about ensuring that when denials occur—as they inevitably will—your practice is prepared to tackle them head-on, safeguarding revenue streams and keeping cash flow steady. So, build these tiers, train your team, and stay persistent. It's the best way to ensure you're not leaving money on the table.
Related Articles
