The appeals process is an essential component of revenue cycle management (RCM), ensuring that healthcare organizations recover reimbursements for denied claims. However, navigating this lengthy, complex, and nuanced process often presents a myriad of challenges that can end in inefficiencies and lost revenue.
Below are key insights and strategies to help strengthen your appeals process, optimize resources, and improve outcomes.
Common Pitfalls in Appeals Management
Many organizations fall into avoidable traps when managing their appeals processes.
The first major pitfall is failing to conduct regular reviews of their appeal strategies. With payors frequently altering their requests, it’s essential for staff to regularly review their documented playbook for handling appeals by payor, denial code(s), and CPT/ICD-10 codes—and also the success rates of their appeals. Without this routine review, organizations risk falling behind on best practices and emerging trends in denial management.
Another common mistake is automatically sending medical records in response to an appeal denial. In today’s environment, this approach may not result in payment. Many payors are now sending letters instead of or in addition to electronic remittance advice (ERAs), which often include additional requests for specific information or instructions for sending appeals to alternative addresses. In some cases, the payor does not even require medical records to overturn a denial. Organizations must carefully review payor requests to ensure success of the appeal.
Lastly, a common pitfall is not prioritizing appeals. Revenue cycle team members often juggle multiple responsibilities, and without prioritization, high-value appeals or those with a high chance of success may be overlooked. Incorporating prioritization into a denial management strategy based on dollar amount or historical success is key to maximizing recovery rates.
Some organizations have seen the benefit of using automation and AI to assist with their appeals, which significantly streamlines the process.
For example, we handle approximately 40,000 appeals a month, leveraging automation to generate appeals quickly and efficiently. By using large language models to create tailored appeal responses, we help our clients improve efficiency when managing large volumes of claims.
Whether an organization operates as a lab, ambulatory surgery center (ASC), or urgent care facility, the core challenge remains the same: an increase in denials along with the time required to handle appeals.
Key Strategies to Strengthen Your Appeals Process
To improve your organization’s appeals process and reduce the burden on your team, consider implementing these key strategies:
1. Adopt a Data-Driven Denial Management Strategy
A data-driven approach is the foundation of an effective appeals process.
Analyzing denial trends by payor, denial or remark codes, diagnosis codes (DXS), and CPT codes can provide valuable insights into recurring issues and help you craft targeted responses. Build a denial resolution playbook based on this data, so your team can proactively address common issues before they escalate into full-blown appeals.
2. Create Fixes Based on Historical Data
Learning from the past is essential in denial management.
By reviewing the history of denials and appeal success, your organization can create standardized fixes for recurring issues. This allows you to resolve claims faster and prevent denials from occurring in the first place. Actions can then be performed in bulk to increase efficiency while reducing the effort required. Tracking which appeals have been successful can also help you refine your approach over time, ensuring continuous improvement in your denial management process.
3. Automate Where Possible
Automation is a game-changer in managing the overwhelming volume of appeals.
Automating the generation of appeal letters, tracking responses, and managing denials can free up significant time for your revenue cycle team. Incorporating AI into this process can further streamline operations, allowing you to tailor responses based on payor requests or denial reasons. As the number of denials continues to increase, automation is an important strategy when managing a large volume of claims, as it ensures that every appeal receives the appropriate level of attention without overburdening staff.
4. Monitor Success and Payor Correspondence
Once you’ve implemented fixes and automation, it’s crucial to monitor the success of these strategies.
Regularly reviewing the outcomes of your appeals will help you assess the effectiveness of your denial management process. Additionally, it’s important to watch for paper correspondence from payors, as many requests for additional information are sent via letters rather than electronic channels. Missing these requests can result in missed appeal opportunities, so it’s vital to stay vigilant.
5. Prioritize High-Value Appeals
Not all appeals are created equal.
To maximize the effectiveness of your revenue cycle team, focus on high-value appeals or those with a higher likelihood of success. Prioritizing these appeals means your team can spend their time on cases that are most likely to yield a positive financial outcome, which can significantly improve the overall recovery rate and streamline the appeals process.
Strengthen Your Appeals Process With The Right Technology and Expert Guidance
We help our clients create a strong appeals process through a combination of AI-driven technology and our team of appeal experts.
Looking to strengthen your RCM? We’d love to chat about how we can help.
Or, we can put together an opportunity assessment for you (here’s more information on what’s included).
