April 2013

The Art of the Appeal Letter
By Lindsey Getz
For The Record
Vol. 25 No. 6 P. 14

Follow these pointers to make this not-so-appealing task less laborious.

Writing appeal letters to dispute a rejected claim is no easy task but instead a complicated process that requires time and dedication. Sometimes there are simple answers—for example, a benefits verification process may rule out denials based on eligibility, essentially eliminating the need for a letter. But if an organization deems it worthwhile to go through the appeal process, then it must follow several steps to make the most of the opportunity.

The approach toward penning an appeal letter, a robust denial management stance, and learning from mistakes are all critical components of an effective revenue cycle plan.

It Takes a Certain Type
The type of appeal carries a lot of weight in determining a viable strategy. Before putting pen to paper, so to speak, review the claim for hints about why it was rejected, says Guy Nesbitt, a global business development leader for healthcare at Genpact, a business process management and technology services company. “There are many reasons that a claim can be denied—though typically falling into the clinical vs. nonclinical categories—and the first step should be determining the reason,” he says. “As you begin to write the appeal letter, you want to focus on detail. Include documentation of exactly what took place, including the clinical outcome. The goal is to show that you followed procedure.”

However, that often is easier said than done. Understanding the denial can be a task in itself, Nesbitt says. “The denial is often a brief statement as to why it was denied, so you have to do your homework in trying to understand the motivation behind that denial,” he says. “Oftentimes the denial is just the first of many. The payer may give you a brief reason why it was denied, which turns out to be only the first reason. For example, if I were to say you couldn’t drive a car because you weren’t tall enough and you came back with an appeal that you could sit on a booster seat, the next denial might then say that you also aren’t old enough. So you have to consider that the first denial may be only one part of the total reasoning. Think about that as you start the writing process. If they approve your supporting documentation in the appeal, you still have to consider if there is anything else they can say no to.”

Of course, there’s nothing stopping providers from calling a payer directly. Sometimes that can help answer basic questions and get the appeal letter headed in the right direction. The key when calling a payer is to have your questions already lined up, Nesbitt says. “The person who answers the phone is more likely than not going to try their best to help you, but you need to have all your questions ready to go and make it easy for them,” he says. “You want to have a series of questions already put together that they can answer simply yes or no to.”

Nesbitt also recommends gathering all documentation prior to starting the writing process. “Unless you collect absolutely all of the paperwork, your claim is just going to get denied again,” he says. “Look at exactly what the procedure was and then look at other examples of claims for that same procedure which were reimbursed successfully. What were the differences?”

Any good appeal letter requires a few basic necessities, including the background information/scenario, the issue at hand, the request to return to the initial Medicare-severity diagnosis-related group (MS-DRG), and a detailed explanation regarding the request, says Donna Rudolph, RHIT, CCS, an ICD-10-CM/PCS leader at Health Revenue Assurance Associates (HRAA). “The letter should also include any and all documents of the record that can support the request, including Coding Guidelines and Coding Clinics,” she says. “An outpatient appeal letter should include any pertinent CPT Assistants, Medicare transmittals, and local and national coverage determinations.”

The type of appeal also will dictate how the process is handled, she adds.

A Detail-Oriented Approach
According to Jacqueline E. Poliseno, RN, BSN, CPHM, a case management manager at Craneware, which provides automated solutions for healthcare revenue integrity, there are three basic types of appeals: medical necessity, administrative, and coding, each of which require a unique approach.

Medical Necessity Appeal
In this situation, where denials typically are focused on short stays, Poliseno recommends beginning the appeal letter with a recap of the rejection. “Next, include a paragraph that talks about the hospital’s process for assessing admissions for level-of-care [site-of-service] decisions,” she says. “You must make clear, comprehensive arguments.”

When writing the appeal, focus on engaging the reader. Poliseno says this can be accomplished by “telling the story” behind the appeal. This includes talking about who the patient is through details such as age, sex, and medical history. Also chronicle the circumstances that led up to the admission. “For example, has the patient been followed for weeks or months in the outpatient setting or recently seen in the emergency department with the same issue that prompted the admission?” Poliseno says.

Don’t scrimp on the details, she says, and be sure to include the following points when pertinent:

• What did the patient look like at the time of presentation?

• What treatment did the patient receive in the emergency department?

• What symptoms remained after treatment?

• What treatment was intended for the admission?

• What happened each day of the stay? (Talk specifically about what the patient looked like clinically and the treatments/services provided.)

“Then end your story with discharge information,” Poliseno says. “Include any new medications, treatments, and/or services that will be provided after discharge. Once your clinical story is written, add references that speak to the standards of care and/or community norms. For instance, does the patient meet InterQual, Milliman, or Heart Rhythm Society guidelines? Or does the patient meet hospital-specific inpatient guidelines that have been approved by the hospital’s utilization management committee?”

Poliseno recommends referencing the Medicare Benefit Policy Manual and devoting a paragraph to physician intent, including the physician order for inpatient care and the assessment and plan. “Then close with a summary that highlights how your arguments support Medicare’s definition of an inpatient,” Poliseno says. “You want to include all possible relevant information in this level 1 appeal letter, that way if you do need to go to level 2 or level 3, you will only need to update dates and references related to the unfavorable decisions received.”

Administrative Appeal
In the event of a weak clinical argument, it may be wise to write an administrative appeal focused on the physician’s intent to admit the patient as an inpatient. “In this appeal, the basis for the medical necessity determination is whether the services provided were consistent with Medicare’s definition of an inpatient admission,” Poliseno says. “Highlight the principles articulated in the Medicare Benefit Policy Manual that provide Medicare’s definition of an inpatient.”

She also suggests focusing on documentation that supports the argument that the treating physician intended the patient to be admitted to the hospital for inpatient services.

Coding Appeal
These denials typically are related to documentation, Poliseno says, adding that the arrival of ICD-10 will have no effect on the process. No matter if it’s ICD-9 or ICD-10, writing an effective coding appeal letter requires the author to have extensive coding knowledge. Like the other appeal processes, gathering the appropriate support materials is essential.

“Again, you must write a clear, well-organized letter that provides the documentation that supports the DRG billed,” Poliseno says. “Take the time to research coding rules, research coding updates, and request letters of clarification from physicians, which must be filed as late entries to the medical record. Also, plan to research and include any other rules or definitions that may be pertinent.”

Managing Appeals
Poliseno says organizations must have a system in place that allows them to track and monitor denials and appeals. This will help ensure that appeal letters go out in a timely manner to meet payer deadlines. Nesbitt suggests keeping an ongoing assessment of your “pile in queue” to maintain a sense of order.

The decision to pursue a denial can be difficult. In a recent RACTrac survey summarized by the American Hospital Association (AHA), 84% of hospitals indicated that medical necessity denials were the most costly complex denials, making healthcare organizations think twice about initiating an appeal. Several factors must be weighed to deem it worthwhile.

“You have to assess what you already have in queue, asking ‘How old is it?’ and ‘How small is it?’” Nesbitt says. “These are the questions that will help you determine if it’s truly worth pursuing. There are cases where it simply is not worthwhile to pursue it—what we call partial denial low-balance claims. The time involved in pursuing appeals can be arduous, and it makes sense to focus that attention on the larger balances.”

Each case should be reviewed individually, adds Rachel Beard, RHIT, CCA, HRAA’s director of coding services. “Obviously if the recommended change is correct and there’s nothing to stand behind the initial DRG, then that’s a place to stop,” she says. “You should ask yourself ‘Is the reimbursement difference worth the appeal?’ ‘Is the topic of appeal something that could be an ongoing issue that would also affect a lump sum of money going forward?’ and ‘Is this definite disregard of coding guidelines and coding advice?’ If any of these are true, you would want to appeal.”

Nesbitt recommends prioritizing claims based on dollar value to determine whether they are worth going through even one round of appeal. Then look at the age of the denial, whether it’s a clinical or nonclinical category, and whether it’s federal, government, or commercial insurance. Breaking it down by those criteria can help bundle similar denials.

Tackling the appeal-writing process in batches also is a sound strategy, Nesbitt says. “As you begin to tackle them, they’re easier to do in groups where your approach is the same,” he explains.

Organizing appeal letters can help ensure they go out in a timely manner. Rudolph suggests using a template that contains all pertinent information that would be considered “necessary and consistent,” such as the account number, medical record number, patient name, visit dates, and both the original MS-DRG and any changes (or if it’s an outpatient setting, all the initial suggested changes).

A standard introductory paragraph can save time too, Rudolph adds. “And use a database or some type of similar software to track when an appeal is received and its due date so that the software could be used to select the appeal that is due next rather than in the order in which they were received,” she says.

Once the decision has been made to pursue the appeal, it’s time to select the best person to write the letter. The type of appeal often is the biggest factor in determining the author. For medical necessity and administrative appeals, Poliseno says there are particular skill sets that lend themselves to better written appeals. She suggests enlisting a candidate with excellent analytical writing skills, experience with level-of-care assignments and guidelines, a strong clinical background, familiarity with Medicare rules and regulations, billing expertise, legal knowledge, and solid management skills.

That in and of itself is a tall order, she says, adding that whoever qualifies for the position also must be able to set aside significant chunks of time. “The entire process can be quite time consuming, and you need someone who has the ability and the desire to complete letters in a timely way,” Poliseno says.

For coding appeals, the list of skills is slightly more forgiving but no less challenging. Instead of an impressive clinical background and experience with the level-of-care guidelines, the candidate should be well versed in coding intricacies. And just like with writing medical necessity and administrative appeals, the author must be dedicated to the process, have the time to follow all the necessary steps, and provide thorough documentation.

Lessons Learned
The entire claim, denial, and appeal process can be incredibly frustrating. For example, according to the AHA, hospitals report that nearly three-fourths of appeals are sitting in the appeals process. Becoming a student of the process and preventing repeat mistakes are critical because unresolved claims can have a detrimental impact on a hospital’s cash flow. While there certainly are issues involved with denials that could not have been prevented or were no fault of the provider’s, there also are plenty of mistakes that could have been avoided in the first place.

“My parting advice to anyone preparing appeals would be to try to include everything you can possibly think of,” Nesbitt says. “The key is to be as thorough as possible. As we look at the lessons learned in managing denials, we come back to the importance of getting it right the first time. Learn as much as you can from any mistakes you’ve made so that you don’t make them again.”

— Lindsey Getz is a freelance writer based in Royersford, Pennsylvania.