Medical Claims Appeal Processes: How Healthcare MSOs Can Streamline

As a management services organization, your value comes from hunting down and capturing revenue with processes beyond the time and skill of your practices or physician groups. 

One promising path to this revenue is medical claims appeals. 

Researchers in one study of 516 hospitals across 36 states found that 54% of private payer denials were ultimately overturned and the claims paid. In the ACA Marketplace, KFF found insurers approved 41% of all appeals. We call that promising.  

Still, MSOs tackling appeals face significant complexity. While some MSOs keep their portfolios limited to a handful of providers with 10,000 patients, others contain over 100 providers serving millions of patients. The diversity of insurer plans, varying state regulations, and medical procedures involved in a large number of patients and plans inflames complexity. 

Here, you can survey the landscape of appeals and fashion your best use of automation and integration to make winning that revenue attainable. 

What are medical claims appeal processes?

Medical claims appeal processes are formal procedures that allow patients, healthcare providers, or their representatives to challenge claims denials and coverage decisions made by health insurance companies. These claims (not prior authorization) processes typically involve two main stages: internal appeals and external reviews.

Internal appeals are the first step, where the insurance company is asked to reconsider its decision. This usually involves submitting a written request along with supporting documentation, such as medical records or a letter from the doctor, within a specified timeframe (often 180 days from the denial). The insurer must respond within set deadlines: 72 hours for urgent care, 30 days for pre-service claims, and 60 days for post-service claims. If the internal appeal is unsuccessful, patients or providers can then request an external review, where an independent third party evaluates the case. This external review provides an unbiased assessment and can overturn the insurer's decision, ensuring a fair evaluation of the claim.

Why streamlined appeals processes are important for MSOs

Once the MSO stabilizes a new acquisition, they move to optimize revenue cycle processes. (Explore why stabilizing a new acquisition must take place before growth initiatives in MSO Operations: Follow the Stabilization-Optimization-Growth Model for Success.) Pursuing appeals is worthwhile because it leads to: 

Financial stability

Denials can deplete up to five percent of provider net revenue, according to a recent HFMA study. Nearly 60% of healthcare providers surveyed in Georgia, Illinois, California, New York, FL, and Texas consider denials their greatest revenue cycle challenge. 

Consistent appeals not only claw back a portion of that revenue, but they also put payers on notice that you will insist on accurate reimbursement. Timely payments and improved revenue cycle management reinforce financial stability. 

Patient advocacy

Providers’ prime directive and motivation is providing excellent care. They can’t carry out their work when claims are denied.  Appeals allow patients to contest insurance company decisions that deny coverage for treatments or services they believe should be covered. Further, filing appeals is a necessary aspect of consumer protection. It provides a safeguard against arbitrary or incorrect denials of coverage, especially with the introduction of external reviews by independent third parties. 

Compliance and fairness

Appeals ensure that insurance companies adhere to their policies and legal requirements, promoting fair treatment of patients and providers.

Quality assurance

The appeals process can highlight systemic issues in claims management, leading to improvements in overall healthcare delivery and billing practices.

Improved communication

The appeals process facilitates better communication between providers, patients, and insurers, potentially leading to a clearer understanding of coverage policies.

6 steps to streamlining the appeals process  

1. Centralize appeals management. Create a dedicated team or department to handle appeals across all practices in your portfolio. Taking this step has several advantages. It allows for:some text
   1. staff to develop specialized expertise in appeals management which leads to higher success rates and faster resolution times.
   2. the creation of documented best practices and procedures across all practices, improving consistency and efficiency. 
   3. better data collection and analysis, so that MSOs can identify trends in denials and address recurring issues. 
   4. cost savings by reducing redundancies, leveraging economies of scale, and optimizing resource allocation.
2. Standardize the appeals framework and workflow.some text
   1.  Implement a uniform procedure across all practices within the organization, ensuring compliance with ACA regulations and ERISA requirements.
   2.  Establish clear timelines. Set specific deadlines for each stage of the appeals process, adhering to regulatory time limits for responding to both claims and appeals.
   3. Develop payer-specific strategies. Recognize and adapt to the distinct appeal policies of different insurance providers.
   4. Ensure legal compliance: Maintain a thorough understanding of healthcare laws and insurance regulations to minimize legal risks associated with the appeals process.
   5.  Implement a disclosure system: Create a process for mandatory disclosure of evidence and rationale for decisions made by plan administrators, as required by the ACA.
   6. Establish a review mechanism: Regularly assess and refine the appeals process based on success rates and identified trends to continuously improve the framework's effectiveness.

3. Transition all provider EMR and PM systems to your preferred provider. Review information about EMR integration after acquisition and healthcare data integration of multiple PM systems. Both resources cover MSO challenges and opportunities. As the source of efficiency and cost savings, you are obligated to use one EMR  platform and one PM system for all of your providers. After all, you create an economy of scale that lowers costs. 
4. Double down on provider documentation practices. While pinpointing which denials result only from poor documentation issues can be tricky, most estimate they are behind 20 to 30% of denials. Create protocols and best practices across your acquisitions to ensure all provider claims are supported by comprehensive clinical documentation to substantiate medical necessity. 
5. Leverage denials and contract management automation: Employ software that automates denials management, facilitates communication with payers, and provides insights into denial trends. Use the software’s advanced analytics to identify patterns in denials and predict potential issues before they occur
6. Provide thorough training: Educate staff on common denial reasons, proper coding practices, and effective communication strategies with payers.

Streamline with appeals automation software

A revenue cycle staffing shortage along with the acceptance of the inevitability of a transformation to digital operations has prompted many healthcare organizations to adopt AI- and automation-driven software in claims and denials management. 

The bane of revenue cycle staff existence, claims management (which encompasses denials and appeals management to varying degrees) was one of the first areas pioneering RCM software engineers tackled. Today 98 percent of providers use fully electronic claims submission processes, according to CAQH. Advanced technologies leverage AI and automation to streamline claims processing across all payers and include features for audit responses, appeal submissions, and ADR tracking. Telemedicine platform Doximity recently rolled out a generative AI tool that can even draft appeal letters.

If your MSO uses an end-to-end RCM solution and you are not appealing a reasonable amount of denials, charge them with improving their performance in this space. As mentioned above, you should be getting 54% of your denials overturned. Should your comprehensive solution fail at this task, consider a point solution. Point solutions are built from the ground up to aggressively tackle individual points in the revenue cycle. A denials and appeals software specialist can tell you how they go further to capture your revenue and get your patients the care they need. 

Given the significant impact of denials on healthcare revenue and the ongoing staffing challenges, the adoption of AI and automation in claims and appeals management via proven RCM software is not just a trend, but a necessity for modern healthcare organizations. These advanced technologies not only streamline processes and reduce administrative burden but also have the potential to significantly improve appeal success rates and overall revenue cycle performance.

Streamline appeals with contract management software

Where claims management software focuses closely on the figures and timelines involved in denials and appeals, contract management software puts providers and their MSOs firmly in control of contract terms and rates. It impacts appeals recovery because it:

• facilitates provider and MSO access to relevant contract clauses - contracts are centralized and digitized
• compares reimbursements against agreed rates and identifies underpayments
•  generates data-driven evidence to support appeal cases
•  provides detailed insights into contract terms - unfavorable terms are flagged
• supports contract-based appeals - by providing proof of established terms and rates
• using AI and automation to determine which denials have the most chance of winning their appeals 
• providing insights that can be used to negotiate better terms with payers, reducing the need for appeals in the first place

With thorough, simplified access to contracts your payers have signed, staff can marshal key data and generate appeals quickly and with confidence. 

Take a quick, self-guided tour through a powerful contract management tool that puts agreed-upon terms and rates at your fingertips:

Let contract management software support your appeals success

As MSOs lead practices and physician groups into the digital era, they must integrate advanced technologies, and centralize appeals processes, EMRs, PM systems and RCM platforms. The increasing adoption of AI, automation, and specialized software solutions offers unprecedented opportunities to improve revenue and get patients care. These advances also reduce administrative burden, critical in an RCM staffing shortage. 

MD Clarity’s contract management tool, RevFind, processes, digitizes, and analyzes payer contracts. It compares each payment coming against contract terms and lists all discrepancies in user-friendly charts. Clients have identified millions in underpayments while streamlining their contract management workflows. RevFind also models proposed payer changes so you can go into contract negotiations understanding which rates and terms you must have and which you can compromise on. 

Request a demo today to simplify and monetize contract management and chargemaster optimization.