Struggling with prior authorization denials? Check these quick improvement tips!

Tired of the denial merry-go-round with payers? Is your staff tearing their hair out, along with you? In today’s healthcare landscape, receiving a denied claim can be tricky business if you don’t understand how to appeal a claim. To appeal a denied claim, one must first understand the type of denial you have received, administrative or clinical. Each presents its challenges in the appeal pipeline but can be overcome. Due diligence with back-office staff is paramount to achieving a good ROI on appealing denied claims.

An administrative denial will typically arise from errors in documentation, such as an incorrect identification number on the claim or other technical mistakes. Generally, one can correct the administrative denial via a phone call. If the claim includes an error related to information or a number that was entered incorrectly, it can be corrected and reprocessed without requiring a formal appeal.

A clinical denial typically occurs when insurance companies question the medical necessity of a procedure or treatment or classify the procedure as investigational or experimental. Another common reason for a clinical denial is the absence of prior authorization. Many insurance companies require prior authorization for certain treatments, and providers, as well as staff, may not be aware of this requirement or understand how to request one. If a claim has already been submitted, authorization cannot be submitted or requested retroactively in most cases, however, I always recommend trying, some payers will allow it.

Generally, clinical denials require a lot of steps to complete an appeal within a specified timeframe for consideration. Each state and payer has its own laws/rules for timely filing of an appeal, and it can be anywhere from 30 to 90 days from the date of the denial.

Denials of prior authorization occur generally due to incomplete information, lack of medical necessity, or coding errors. However, there are other frequent causes, such as administrative errors, and everyone’s favorite, Non-Covered Services. To assist providers and their staff through this maze, The American Medical Association (AMA) is proactively working to help regulate these ongoing issues with prior authorization denials across the healthcare landscape.

Let’s take a more detailed look at the ongoing challenges facing providers and staff:

• Missing or incorrect patient data, such as dates of birth, insurance details, or demographic information, can cause delays or denials.

• Lack of clinical detail: Denials happen if the request doesn’t provide enough information about the patient’s condition and the need for treatment.

• Coding or billing errors: Incorrect billing codes or modifiers can result in claim denials.

• Lack of Medical Necessity: If the insurance company assesses that the proposed treatment is not medically appropriate or lacks support from evidence-based guidelines, the treatment may be denied.

• Administrative Errors: Lack of or expired prior authorization: Not obtaining prior authorization before the procedure or treatment can result in a denial.

• Plan Coverage Limits and Non-Formulary Issues:

• Non-covered benefits: Certain procedures or medications may not be included under the specific insurance plan coverage.

• Non-formulary medications: If a medication is not listed on the insurance company’s preferred formulary, it may necessitate prior authorization or face denial.

• Out-of-Network Providers: Utilizing providers who are not within the patient’s insurance network may necessitate prior authorization or result in denial of the request.

• Insufficient capacity for managing prior authorizations: Certain practices may not possess the necessary resources or adequate staffing to efficiently handle the prior authorization process.

Then there are the five levels of CMS appeals – not for the faint hearted!

Medicare has broken appeals into five (yes, five), levels of appeals for those who are unfamiliar with this process:

• Redetermination – Doctors submit proper appeal paperwork within 120 days. This appeal is made by the Medicare contractor that denied the claim in the first place.

• Reconsideration – The appeal must be submitted 180 days from the date of receipt of the redetermination. The claim is reviewed by a Qualified Independent Contractor (QIC). Two QICs in the country work solely on Medicare Part B reconsiderations.

• Administrative Law Judge (ALJ) Hearing – The deadline for filing a request is 60 days from the date of receipt of the reconsideration notice. The case file is prepared by the Qualified Independent Contractor (QIC) and forwarded to the Department of Health and Human Services (HHS) Office of Medicare Hearings and Appeals. Cases are assigned to Administrative Law Judges (ALJs) by the Centers for Medicare and Medicaid Services (CMS), and ALJs have 90 days to issue a decision. This process provides beneficiaries with the opportunity to appeal to an unbiased individual rather than an insurance carrier.

• Medicare Appeals Council (MAC) Review – DCs have 60 days from the date of the ALJ hearing decision/dismissal to file a request to the Department Appeals Board (DAB) for an MAC review.

• Federal Court Review – DCs have 60 days after the DAB decides or declines review to file a request for a federal court review.

Receiving denied claims can be daunting, and the process of appealing them may appear challenging. Nonetheless, it is crucial to dedicate time to this endeavor. So what do you do if you and your staff are not up to the task? Simple, hire us, ZENMED Solutions, INC., to assist you with these time-consuming and often confusing tasks. We are experts in the industry and have years of experience working denied claims through appeals for a positive outcome, whether it is a commercial payer or Medicare.

To remain competitive, medical coding teams should monitor key performance metrics such as MGMA:

MGMA Benchmarks for Medical Coding in 2025

• Coding Accuracy Rate >95%

• Claim Denial Rate <10%

• Days in Accounts Receivable (AR) <30 days

ZENMED Solutions, INC., adheres to performance metrics to ensure compliance across the healthcare landscape for its clients. Non-compliance can result in significant consequences. That includes continued denials and incorrectly coded claims. With increased funding for healthcare fraud detection, agencies such as the OIG, CMS and state Medicaid Fraud Control Units are enhancing their activities. Non-compliance may lead to financial penalties and legal actions.

Partnering with a reputable billing company such as ZENMED SOLUTIONS, INC. can enhance your Compliance Program, along with your Revenue Cycle Management (RCM) processes, including Denials and Appeals, through our advanced AI software, BLISS.

ZENMED Solutions, INC., has developed an RCM tool named BLISS – “Barometric Live Intuitive Solution(S).” This intuitive tool can track, categorize, strategize, correct, and learn (TCSCL) the specifics of any practice in real-time, thereby improving all aspects of RCM. We specialize in automating back-office tasks within the healthcare industry. The team at ZENMED Solutions Inc. understands the challenges a practice faces when trying to submit clean claims, which directly impacts the coding and billing departments. Our teams are available to assist with these challenges as needed.

Some of these processes BLISS can assist with include the following:

• Correct Procedure code(s)/CPT

• Correct Diagnosis code(s)/ CD 10CM /ICD 10PCS

• Correct HCPCS codes

• Correct Modifier(s)

• Keeping abreast of Payer Reimbursement policies and LCD/NCDs for CMS

• Date of denial/rejection, if a denial is received, as the payer only allows a certain amount of time to appeal

• Description of Denial / Rejection Code(s)- coding error, patient registration error, precertification

• Remittance identification number

• Charge capture, a crucial step in the revenue cycle.

• Automating and tracking claims submissions

Establish a “Culture of Compliance” by prioritizing the daily tasks needed to achieve a good ROI and paid claims, without worrying about Prior Authorization Denials or Retroactive denials. Establishing compliance within the practice’s core principles through well-defined policies, procedures, and leadership support. This approach ensures the protection and integrity of your practice, in other words, “Bulletproof Your Practice”!

“A little knowledge that acts is worth infinitely more than much knowledge that is idle.” Khalil Gibran

ZENMED SOLUTIONS, INC., is based out of Diamond Bar, California and we have over 75 clients around the U.S. If you are tired of sleepless nights worrying about revenue bleeding out of your practice, we can help, take the first step and call us at (844)-307-0806, or email us at: Info@ZenMedInc.com.

RESOURCES:

• https://www.ama-assn.org/practice-management/prior-authorization/when-health-plans-delay-and-deny-they-must-say-why

• https://www.ama-assn.org/practice-management/prior-authorization/how-ai-leading-more-prior-authorization-denials

• www.acatoday.org/appeals

• NAIC – Supporting Insurance, Regulators, & Public Interest