Coding Denial Trends—How to Create an Effective Appeal Strategy

May 15, 2019 3:42 pm

Question: As health care moves toward value-based payment, what trends are you seeing in coding denials and what strategies are most effective for handling appeals and preventing denials?

Answer: Ideally, we want to prevent denials. However, denials are a reality, even with the best intentions and dedicated staff. In fact, claim denials from Medicare, Medicaid, and health plans are on the rise. Understanding recent trends in denials is essential to the development of an effective and comprehensive appeal strategy. Among emerging trends, distinguishing coding denials from clinical validation denials (CVDs) is an ongoing challenge, and a good place to begin the discussion.

Coding Validation versus Clinical Validation

With the shift to value-based care, the difference between coding validation (DRG) and CVDs is no longer distinct. The preponderance of more CVDs in which providers use a combination of clinical and coding references is one major trend that makes it difficult to determine the type of denial. For example, a coding reference may be used inappropriately to support a clinical validation. This creates confusion that demands a dual approach to writing appeals, including determining the denial type and the most productive appeal strategy. While effective, this approach requires communication and collaboration between coding and clinical documentation improvement (CDI) staff. 

Incorrect Review Dates

Payers sometimes erroneously reference guidelines in place at the time of review but not in effect at the time of service. In some cases, the guidelines have changed by the time of review. Even if the reference is accurate, the guidelines must be applicable to the date of the claim.

If reference guidelines are not applicable to the date of the claim, this should be stated as part of the appeal rationale. Include a copy of each reference and point out how the reference is not applicable to the claim. For example, the reference may have been published after the dates of service.

Queries Subjected to Payer Scrutiny

Be on alert for gaps in documentation where additional physician queries may be necessary as payers heighten their scrutiny of queries. Make sure queries are appropriate and not leading. The American Health Information Management Association (AHIMA) provides guidance on appropriate and successful query writing, including practice briefs in AHIMA’s Guidelines for Achieving a Compliant Query Practice (2019).

Creating a Successful Appeal Strategy

To ensure health systems and medical practices get paid for services rendered and patients’ office visits and medical claims are handled correctly, it is important for health systems and medical practices to develop a useful appeal strategy. Implementing the following five steps for all denials provides a strong basis for an appeal strategy:

Ensure communication and collaboration between coding and CDI. Determining the type of denial—clinical validation, DRG validation, or a combination—requires combined expertise. True clinical validation is outside the coder’s scope and clinicians must rely on coders for DRG validation. As we see more denials with a combination of clinical and coding issues, CDI and coding must work together to answer critical questions. Is the denial correctly documented and clinically supported? Does it meet the definition of secondary diagnosis? Is it coded correctly? Look at both clinical documentation and coding rules. Documentation should reflect the severity of patient conditions, for both patient care and proper payment. The coder is crucial to the scenario as medical language does not always equate to coding language. In addition, here are two examples of how coding and CDI staff can collaborate to resolve issues:

  • Hold meetings between coding and CDI staff on a regular basis so coders can share the coding specificity required to capture the severity of patients’ conditions. Some of this can be captured concurrently in queries by the CDI professionals.
  • Recruit a physician advisor or champion to raise awareness about these issues and train the medical staff directly.

Create a multidisciplinary approach that includes senior management in appeals processes. Involve leadership in critical areas—managed care, revenue cycle, clinical documentation, health information management, utilization review, legal, compliance—all departments involved in response to denials and audits. Pay attention to the language in health plan contracts in addition to Medicare and Medicaid contracts. For example, we often see denials that say “didn’t significantly increase resources” as the denial reason, which is hard to appeal if the contract allows that language used as a denial. Providers need to understand contract language and know their rights in the appeal process.

Secure administrative support for tracking denials and monitoring timelines. Appeal coordinators and administrative assistants are invaluable to an efficient appeal process. Money is lost when the process is not managed in a timely manner.  Even one high-dollar claim denial that is not appealed within the proper time frame could equal an appeal coordinator’s annual salary. And with an increased volume of denials, multiple small-dollar amounts can be equally devastating.

Never assume that a denial is correct, especially a commercial health plan denial. Denials are often signed by administrative personnel or staff in the audit department. Though health plans are not as bound by government regulations, the appropriate credentialed individual should be involved in the denial, such as a certified coder. Even with that, incorporate the following steps for denials.  

  • Verify all references such as AHA Coding Clinic and other resources. The denial may include only a portion of the reference and key points may be missing.
  • Verify that references are applicable for your case, and if they are not, point out specifically why in your appeals.
  • If denials are not signed by clinicians or certified coders, request the appropriate credentials of the reviewer.

Provide ongoing education and training. Involve all stakeholders. Continue to evaluate contract language. Educate physicians. Promote CDI and coder collaboration. Assess the appeal process. If your processes are not successful, determine why, and make the required adjustments.

As health care makes the shift to value-based payment, awareness of the latest trends in coding denials and implementation of a strategy to review denials are essential for health systems to create best practices for combating denials and successfully managing appeals processes.


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