An ASC’s 5-Step Guide to Quick & Accurate Denial Appeals
Healthcare claim denial rates are on the rise, with up to 20% of all claims getting rejected and nearly 60% never resubmitted. While ambulatory surgery centers (ASCs) have a much lower denial rate of 4%, this figure still represents thousands of dollars left on the table. To make matters worse, every denied claim can cost between $25 and $181 to appeal, contributing to billions in annual administrative expenses.
While up to 70% of denials are recoverable, many appeals fall short due to factors like:
Poor documentation
Missed deadlines
Improper coding
Payer-specific complexities
Ambulatory surgery centers typically recover between 60% to 80% of denied claims through proper appeals processes.
These challenges delay revenue collection while diverting resources from patient care operations. So, how can ASCs quickly and accurately turn denials into payments? Our expert framework below can streamline your appeals process, help you recover funds faster, prevent future revenue loss, and focus your operations on outstanding patient care.
Failing Appeals? It’s Time to Rethink Your Strategy
“Many ASC appeals fail due to missed deadlines, weak documentation, and failure to address denial reasons. A structured approach and stronger clinical justification can significantly improve success rates.” — Alisha Rabel, AT&C Revenue Services, CEO
When Your Claim Is an Easy Fix
With many denied claims, the cause can often be a simple matter of demographic data errors or missing referral numbers. Other basic denial reasons can include:
Under-preparation. Missing prior authorizations or poorly organized evidence can lead to a rejected appeal.
Coding errors. Appeals with incorrect, incomplete, outdated, or missing coding or omitted modifiers will be denied. If the diagnosis and procedure codes don’t align, this is also grounds for rejection.
When Your Claim Requires Strategic Reconsideration
When the denial isn’t a matter of simple coding or documentation, it may be that your traditional approach just isn’t sufficient for today’s appeal requirements. Here’s why even the most recoverable claims end up repeatedly denied:
Overly reactive approaches. Treating denials as a problem to fix rather than an avoidable issue leads to rushed, incomplete appeals that repeat the same mistakes.
No payer-specific knowledge. Those who lack payer-specific knowledge default to one-size-fits-all appeals that usually fall short.
Generic denial codes indicate rejection for a reason the payer is unable or unwilling to explain. You may need to contact them directly for clarification.
Lack of collaboration and centralized planning. Disjointed systems and siloed teams make it harder to see patterns in denials and track the success of appeals. Written communications are also easily misinterpreted in cases of complex claims. Streamlined collaboration is key during the appeals process.
Failure to analyze trends. Denials can be valuable learning opportunities. If you don’t track trends and look at previously attempted appeals, your ASC might miss the chance to address root causes and take preventive action for the future.
If your ASC is lacking in any of these areas, it’s time to rethink your appeals strategy — and we can help.
5 Steps for Turning Denials Into Wins
After three decades in revenue cycle management, we know what works, so we’ve compiled our best recommendations for successful appeals. This timeline-driven framework is designed to help you quickly and efficiently correct denied claims.
When you get a denied claim back, the American Health Information Management Association’s (AHIMA) recommendation is to begin these steps within one week to give yourself a buffer time for delays and other setbacks.
“Timely claim denial resolution is crucial to maximizing collections and maintaining financial health for our clients… The faster we act, the better the results.” — Alisha Rabel, AT&C Revenue Services, CEO
Before beginning an appeal, you must understand the reason for the claim denial. The entire process is based on building a case against this reasoning. Then, quickly initiate the appeal process to ensure it’s within the allowable timeframe.
Appeals are more likely to succeed when they include a clear narrative backed by supporting clinical or administrative evidence. In this stage, it’s helpful to adopt the mindset of a defense attorney, scrutinizing every detail you can find in favor of the claim.
Review the initial claim. Verify that the original claim, including codes and modifiers, was submitted correctly. Confirm that the required prior authorization was obtained and adequately documented.
Check denial codes and explanation of benefits (EOB). Check that the correct codes and modifiers are appropriately applied. This helps you identify which factors the payer is using to justify the denial so you can focus your review of the medical record to find supporting evidence that counters the payer’s decision.
Correct coding errors. Simple coding errors and missing authorization numbers are common causes of denials, and correcting them is essential for a successful appeal.
Determine your timeline. Make sure you’re within the payer’s specified appeal window. Depending on the case, most payers allow 30 to 180 days for appeal.
Review medical policies. If a denial is based on experimental status or medical necessity, review all pertinent medical policies before appealing the claim.
Gather comprehensive documentation. Compile relevant medical research and clinical data like labs, vital signs, and radiology reports to provide a thorough understanding of the case. For context, include any correspondence with the payer and previous denial notices. This builds the appeal on clinical facts and provides evidence to challenge the payer’s reasoning.
Use a Denial Tracker Template to Stay Organized
According to the Clinical Validation Denials Coordinator at Providence St. Joseph Health in Washington, using a denial tracker template is a strategy for a winning appeal. A tracker is a place to log details such as payer, diagnosis, denial reason, and appeal status and document findings as you go.
You can use a tracker to:
Save time
Stay organized
Maintain oversight
Track the status and variables of each denial
Prioritize cases based on urgency, payer, review agency, etc.
A well-organized strategy executed quickly allows you to address denials most effectively. We recommend spending most of your time on steps 2 and 3, conducting research and planning the best approach for your claim.
Assemble a dedicated team. Put together a team with representatives from all departments involved. This team’s collective expertise can most effectively identify denial causes, devise the best solutions, reduce backlogs, and set benchmarks for improvement.
Understand the claim format. Many healthcare billing systems use standardized formats, such as ANSI837, for claim submissions. Familiarity with these formats enables efficient troubleshooting using ANSI loops and segment references instead of manually navigating forms like HCFA1500.
Check similar previous appeals. TheAHIMA suggests learning from previous rejections and wins. Reusing solid strategies can help you save time and refine your approach.
Find legal precedents and local rulings to cite. Strengthen your case by referencing relevant state rulings or legal decisions that support your position, demonstrating how the denial contradicts established guidelines.
Research state regulations and payer nuances. Each state and payer has its own set of rules, policies, and processes. Ensure you’re familiar with state- and payer-specific guidelines, such as bundling policies or pre-authorization requirements, that could influence claims and denials.
Align appeal with payer policies. Structure your appeal to address the denial directly and align with the payer’s policies. For example, clarify how services qualify for separate reimbursement if bundling policies are in question.
Keep a cheat sheet of each payer’s rules. Maintain an accessible reference of payer-specific guidelines to streamline your appeals process.
Document your appeal strategy. Keep a clear record of your appeal plan, including key arguments and supporting documentation, to maintain consistency and effectively track progress.
Now that you have your denial reason, documentation, research, and appeal strategy, you’re ready to start the appeal process. This step involves organizing your information into a clear and persuasive case, highlighting evidence that directly counters the denial, and ensuring your appeal is thorough and submission-ready.
Strengthen your submission with AI. Integrating AI tools can transform your appeals workflow by detecting errors before submission and predicting which claims might face denial based on historical data. All tools must comply with HIPAA, ERISA, and other state or federal laws.
Write a compelling appeal letter. An appeal letter is a clear, concise, detailed explanation of why the payer should reconsider the claim, supported by relevant medical records, payer policies, and clinical guidelines. It can also include legal precedents, industry standards, and other documentation to strengthen the argument.
Appeal Letter Example
The appeal letter is the cornerstone of a successful appeal case, so it’s crucial to get it right. Kimberly Huff, COC, CCDS, a clinical validation denials coordinator at Providence St. Joseph Health, recently shared her methodical approach to tackling denials with the Association of Clinical Documentation Integrity Specialists.
It starts by addressing the denial head-on, referencing the payer’s reasons for rejection. Then, she creates a bullet-point list of the reasons for the denial, followed by a table detailing the clinical evidence that supports her case. This makes it easy for the payer to understand the rationale for overturning the denial.
Here’s a breakdown of how Huff structures her letters:
Introduction: “I am writing to request reconsideration of the denial of patient [Name].”
Denial reasons: A list of bullet points explaining exactly why the claim was denied
Evidence: A table with specific parts of the record that counter the payer’s claims
Clinical references: Supporting references that reinforce the diagnosis
Patient summary: A comprehensive summary that ties everything together
We’ve attached an example letter for your reference.
Step 4: Submit the Appeal and Follow Up (5-7 Days)
By step 4, you’re ready to submit. Appeals are usually submitted directly to the payer’s claims or appeals department, which may have a specific mailing address, email address, or online portal for submission.
Initiate a first-level appeal. Start with a first-level appeal submission through the insurance company that originally denied the claim. Becker’s ASC Review argues it’s important to first submit an initial reconsideration, as some payers may not evaluate no-authorization denials for medical necessity without it. This step sets the stage for further escalation if needed.
Set a schedule for following up. After submission, consistent follow-up is key. It’s appropriate to follow up the first time after 10 business days and every 5 to 7 business days for every subsequent follow-up. Be sure to document your communication attempts.
Foster accountability. Maintain a feedback loop between departments (billing, coding, and front-office staff) to address recurring issues and improve workflows.
Step 5: Be Prepared to Escalate Your Appeal (30-45 Days)
When your initial appeal falls through despite correct documentation filed within deadlines, it’s time to step up your game with a strategic escalation plan to keep things moving forward.
Initiate a second-level appeal. If the denial is upheld, you can submit a second-level appeal. This may involve escalation to a higher authority within the payer organization or an independent review entity.
Work with payers. Payers want to resolve issues, too, and open communication can speed things along. If a first appeal is denied, try reaching out to supervisors, specialized claims departments, or even medical directors.
Escalate to legal or administrative authorities. If appeals at all levels are unsuccessful, you can try filing with a state insurance board, seeking arbitration, or engaging other third-party experts. This can mean filing a complaint with the state insurance commissioner and referencing relevant court cases and legal precedents. Taking this approach with cases involving large sums or systematic denials is wise.
Document escalation attempts. In your denial appeal tracker, note every step, response, and outcome in detail. A clear paper trail can make a big difference.
Follow through. Many denials are successfully overturned on the second or third appeal, so don’t give up at the first hurdle. Continue to escalate and resubmit appeals as necessary, following up regularly and exhausting every option.
Outsource as needed. If your team is stretched thin, outsourcing medical billing and coding can provide the extra support you need. These experts focus on resolving denials, freeing your internal staff for high-quality patient care and other priorities.
How Spindletop Recovered $500K in Lost Revenue
Spindletop, an ASC division, struggled with claim denials and billing issues due to ineffective traditional approaches. Everything changed when they partnered with AT&C Revenue Services.
We implemented targeted improvements across the revenue cycle to:
Improve billing accuracy
Streamline payer contract analysis
Establish robust reporting systems
Reduce the likelihood of future denials
Within three months, Spindletop recovered $500K in lost revenue, reduced denials, and stabilized cash flow.
This is just one example of how a strategic outsourced partnership can turn around a struggling revenue cycle and pave the way for sustained financial growth, read the case study here.
Take Control of Claim Appeals Today
Don’t let claim denials hold your ASC back. As you adopt a proactive framework with the right partner and tools, you can turn denials into opportunities for growth and efficiency. AT&C is here to help you overcome denials and achieve long-term success.
