Denial Management

MedNexa Health - Service - Denial Management

Identify, appeal, and resolve claim denials to recover lost revenue.

Claim denials are a significant source of lost revenue for medical practices. On average, 5-10% of claims are denied on first submission, and many practices write off these denials without attempting recovery. Our denial management team systematically works every denied claim, appeals with thorough documentation, and implements preventive measures to reduce future denials.

What’s Included:

Denial Identification & Triage:

  • Daily electronic remittance advice (ERA) denial review
  • Paper EOB denial identification and entry
  • Automated denial alerts from practice management system
  • Prioritization by denial amount and recoverability likelihood
  • Time-sensitive denial flagging (approaching appeal deadlines)
  • Denial reason code analysis and categorization
  • Preventable vs. non-preventable denial classification

Root Cause Analysis:

  • Systematic investigation of why claim was denied
  • Payer policy review for specific denial reason
  • Medical record review for documentation gaps
  • Coding accuracy verification
  • Eligibility and benefits verification review
  • Authorization status confirmation
  • Timely filing date calculation
  • Provider credentialing status verification

Denial Resolution Workflow:

Administrative Denials:

  • Missing or invalid patient demographic information
  • Incorrect or terminated insurance identification
  • Duplicate claim submissions
  • Timely filing violations
  • Non-covered provider or facility
  • Service not covered under plan
  • Coordination of benefits issues
  • These denials are typically corrected and resubmitted

Clinical Denials:

  • Medical necessity determinations
  • Lack of supporting documentation
  • Experimental or investigational service
  • Cosmetic or not medically necessary
  • Incorrect diagnosis-procedure linkage
  • These denials require appeals with clinical documentation

Appeal Preparation:

Level 1 Appeals (Initial):

  • Comprehensive appeal letter preparation
  • Clear explanation addressing specific denial reason
  • Supporting clinical documentation attachment
  • Medical necessity rationale with evidence-based guidelines
  • Provider specialty and qualification documentation
  • Alternative treatment failure documentation
  • Clinical notes, operative reports, and diagnostic results
  • Medical literature and clinical guidelines when relevant
  • Submit within payer deadline (typically 30-180 days)

Level 2 Appeals (Reconsideration):

  • Enhanced appeal with additional documentation
  • Addressing specific reasons for Level 1 denial
  • Stronger medical necessity argument
  • Peer-reviewed studies and clinical evidence
  • Expert medical opinions when appropriate
  • Escalation to supervisory review

Level 3 Appeals (Independent Review):

  • External third-party review request
  • State insurance department complaint filing
  • Independent medical review (IMR) submission
  • Attorney involvement when warranted
  • Persistent advocacy until all options exhausted

Peer-to-Peer Reviews:

  • Scheduling physician-to-physician discussions
  • Medical director call preparation and provider briefing
  • Clinical rationale preparation materials
  • Real-time support during peer-to-peer calls
  • Documentation of conversation and outcomes
  • Follow-up letter reinforcing discussion points

Documentation Gathering:

  • Complete medical record retrieval
  • Operative reports and procedure notes
  • Diagnostic test results (labs, imaging, pathology)
  • Progress notes documenting medical necessity
  • Treatment plans and ongoing care documentation
  • Previous treatment failure records
  • Specialist consultation notes
  • Hospital records and discharge summaries
  • Patient history and physical examination
  • Consent forms and informed consent documentation

Appeal Submission:

  • Timely submission before appeal deadline expires
  • Payer-specific appeal form completion
  • Certified mail for tracking and proof of delivery
  • Electronic appeal submission through payer portals
  • Fax confirmation for urgent appeals
  • Tracking number and submission date recording
  • Follow-up call to confirm receipt

Appeal Tracking & Follow-Up:

  • Appeal status monitoring and follow-up every 10-14 days
  • Payer contact for status updates
  • Escalation when appeals exceed timeframe
  • Additional documentation submission upon request
  • Second-level appeal preparation if first denied
  • External review requests when appropriate

Denial Prevention Program:

Denial Trend Analysis:

  • Monthly denial reports by payer, provider, and service
  • Denial reason code frequency analysis
  • High-frequency denial pattern identification
  • Provider-specific denial trends
  • Service-specific denial hotspots
  • Payer-specific denial patterns
  • Time-period trend analysis (are denials increasing?)

Process Improvement:

  • Root cause identification for preventable denials
  • Workflow adjustment to address systemic issues
  • Payer policy education for billing staff
  • Front-end process improvements (eligibility, authorization)
  • Documentation improvement initiatives
  • Coding accuracy enhancements
  • Authorization compliance monitoring

Staff Training & Education:

  • Monthly denial trend review with team
  • Payer policy updates and changes
  • Common denial scenario training
  • Documentation requirement education
  • Authorization requirement updates
  • Coding guideline changes
  • Best practice sharing

Payer Communication:

  • Direct contact with payer representatives
  • Policy clarification for ambiguous requirements
  • Recurrent denial pattern discussion
  • Appeals process optimization
  • Feedback on denial accuracy and appropriateness

Denial Types We Handle:

Registration/Eligibility Denials:

  • Patient not eligible on date of service
  • Incorrect insurance information
  • Terminated coverage
  • Missing referral or authorization
  • Out-of-network provider
  • Service not covered under plan

Authorization Denials:

  • No authorization on file
  • Authorization expired
  • Services exceed authorized units
  • Different procedure than authorized
  • Authorization for different provider

Coding & Billing Denials:

  • Incorrect or invalid codes
  • Unbundling/bundling edits
  • Modifier errors or missing modifiers
  • Duplicate claim submission
  • Timely filing violations
  • Medical necessity not established

Clinical Denials:

  • Not medically necessary
  • Experimental/investigational
  • Cosmetic procedure
  • Insufficient documentation
  • Diagnosis doesn’t support procedure

Coordination of Benefits:

  • Other insurance primary
  • Workers’ compensation related
  • Motor vehicle accident related
  • Third-party liability

Contractual Denials:

  • Non-covered service per contract
  • Benefit limitations exceeded
  • Provider not credentialed
  • Facility not contracted

Performance Metrics:

  • Appeal success rate: 50-65% of appealed claims overturned
  • Appeal turnaround time: <30 days for standard appeals
  • Denial rate reduction: 20-30% reduction within 6-12 months
  • Denial recovery rate: 50-60% of denied amounts recovered
  • Preventable denial reduction: 40-50% decrease

Reporting:

  • Monthly denial rate by payer and reason
  • Appeal success rate tracking
  • Denial trend analysis with action items
  • Financial impact reporting (dollars recovered)
  • Denial prevention progress tracking
  • Top denial reasons with improvement plans

Benefits:

  • Recover 50-65% of denied claim revenue through successful appeals
  • Reduce overall denial rates by 20-30% through prevention
  • Improve cash flow with recovered payments
  • Identify and fix systemic billing problems
  • Ensure you’re paid fairly for services provided
  • Maintain compliance with proper appeals processes
  • Hold payers accountable for incorrect denials

Appeal Timeline: Most appeals resolved within 30-60 days; complex cases may take 90-120 days