How to Win More Denial Appeals: A Comprehensive Guide for RCM Professionals

If you work in revenue cycle management, you’ve seen it: Payers are denying claims today that they would have paid with no problem just a few years ago. And that means your team has probably been bogged down in the appeals process more times than you’d like to count. 

As a 2024 survey by Premier found, more than 15 percent of legitimate claims submitted to private payers are initially denied. Half of those are ultimately overturned—though not without a lengthy and costly appeals process. 

While the best way to deal with a denial is to prevent it from happening in the first place, that’s not always possible. Inevitably, you’ll need a strategic plan for how to write compelling appeals when denials do occur.

Here, we’ll go through the actionable steps your revenue cycle management team can take to win more appeals and keep your cash flow healthy.

The Fundamentals of Denial Appeals

When a denied claim cannot be overturned with a simple correction or additional information, the next step is to appeal it. 

Appealing a claim requires research, meticulous documentation, and the ability to make a compelling, well-supported case as to why the denial should be overturned. Each appeal is different, but in general, you should always include:

• A cover letter
• A copy of the denied claim
• The EOB, or Explanation of Benefits
• A copy of the medical records relevant to the claim
• A physician’s letter explaining the medical necessity of the procedure or service
• Your initial claim submission
• Verification of insurance
• Preauthorization number or documentation
• Coding information
• Any policies, guidelines, or industry standards that support your appeal
• Any additional supporting documentation
• Completed appeal forms required by the payer
• Records of any relevant communication with the payer
• Legal information if necessary

The amount of paperwork alone makes the appeal process a resource-intensive one. 

However, when you consider the need to obtain information, letters, and other documentation from physicians and medical staff while checking and double-checking any administrative data that the RCM team has regarding the claim, it becomes clear that the appeals process can sap a huge amount of your team’s time and energy.

Common Reasons for Claim Denials

While claims are denied for a huge number of reasons, most denials will fall into one of these categories.

Prior Authorization and Eligibility Issues

If prior authorization wasn’t obtained for a service that requires it, the claim will be automatically denied. The same is true if the procedure required pre-certification or notification, but the insurance company was not contacted beforehand.

Sometimes, a patient is not eligible for a particular service or procedure due to their insurance coverage: for example, if coverage has expired or a certain procedure is not covered. 

Coding and Documentation Errors

These types of denials make up a large percentage of preventable denials (which themselves account for nearly 90 percent of all claim denials). 

Coding and documentation errors can be due to something as simple as a typo or something more complex, such as the medical documentation not sufficiently supporting the level of care provided.

Medical Necessity and Clinical Validation Denials

Another cause that payers have increasingly used to deny claims is medical necessity, with insurers employing AI algorithms to deny thousands of claims per month, as a ProPublica investigation found in 2023. 

Clinical validation is related to medical necessity but refers specifically to a lack of clinical documentation that proves medical necessity.

Building a Strong Case for Your Appeal

A successful appeal strategy involves three critical elements: documentation, the appeal letter, and staying on deadline and organized. 

RCM teams know that a strong appeals strategy requires many staff members to collaborate with each other. From the medical staff who supply additional documentation to the back office staff who verify patient data, everyone needs to be on the same page regarding needs and deadlines. Communication is key.

Thorough Documentation and Evidence Gathering

Unsurprisingly, successfully appealing a denied claim requires extremely thorough documentation from the care team—even if the documentation originally supplied was thought to be sufficient. 

RCM staff must be prepared to work with physicians to get the necessary medical records, explanations of medical necessity, and any other information that would be relevant or helpful. Are there prior claims for this patient’s medical condition that were approved? Or prior medical records that support medical necessity? Proof that the physician was following clinical best practices can also be used as strong evidence to overturn a denied claim.

Likewise, RCM staff should collect and verify all patient data to ensure that names, addresses, insurance info, and other demographic data are accurate.

Structuring a Compelling Appeal Letter

A compelling appeal letter will lay out, in plain language, why the procedure or service was medically necessary and why it should be covered under the patient’s plan. 

You’ll want to keep the tone polite and professional, while firmly stating your case. The letter is a good place to introduce your supporting documentation, from the physician’s letter or explanation, to any journal articles or other supporting evidence that can help prove medical necessity.

Meeting Deadlines and Staying Organized

Each payer will have its own deadlines for the appeals process. 

Regardless of the timeline, staff should begin every appeal as soon as possible after the claim is denied. 

Not only does this help the physician and care team provide the most accurate patient accounts possible—since their recollections will be much more recent—but it also ensures that you won’t miss your window to appeal should there be any delays down the line. 

Depending on your team structure, it may be possible to appoint one person as the leader of the appeals team and delegate other information-gathering tasks to additional team members.

Navigating the Appeals Process: From Submission to Resolution

Once you’ve completed the hard work of compiling your appeal, it’s time to submit—and then comes the waiting. Depending on the complexity and dollar amount of the contested claim, you’ll likely wait anywhere from a few weeks to a few months. 

Here’s what you need to know before you submit the appeal, and what to expect between submission and resolution.

Understanding Payer Requirements and Policies

Figuring out what the payer requires as you go can be a recipe for chaos. What if you didn’t ask the doctor for the specific information the payer needs? What if you compiled the entire appeal package, but neglected to include a form that the payer requires? 

To avoid any need to delay or backtrack, familiarize yourself with the payer’s policy on appeals and what they require for each (and remember, different payers may have different requirements). 

Every payer will have its appeals policy publicly available, even if you have to dig through their website to find it. If something in the policy seems overly onerous or unfair, get in touch with them and ask questions.

Leveraging Technology and Data Analytics

Technology is your ally when it comes to appeals. For one thing, having the right denials management analytics in place will help you reduce the number of denials from the start, thereby reducing the number of appeals you need to spend time on. 

Claims management software and electronic submissions can also speed up the appeals process and reduce the chances of manual error.

Maintaining Effective Communication with Payers

While it’s true that the appeals process is, at its heart, an adversarial one, having good relationships with payers can be extremely helpful.

If you’ve communicated with a payer many times about claims, eligibility, and other issues, you are a known entity to them—they’re familiar with your organization and how it operates. That simple familiarity can be helpful if you need to get in touch with them during the appeals process or check in after you’ve submitted.

Implementing Proactive Measures to Prevent Future Denials

Of course, the best way to win an appeal is to never have to file one in the first place. While getting to zero preventable denials is unlikely for any RCM team, it is possible to take steps to drastically reduce your denials rate.

Ensure there are processes and SOPs in place for denials management.

Denials management costs healthcare providers $20 billion a year in administrative costs. 

A cost this significant requires written SOPs, or standard operating procedures, and processes to ensure that staff are empowered to be as successful as possible. When staff can refer to a previously determined step-by-step process, they can work both more efficiently and more effectively.

Implement data analytics to analyze denial trends.

Descriptive and predictive analytics can be an invaluable tool in your denials management arsenal. 

With descriptive analytics, you can identify trends in denials. Which payers are denying claims the most often? Which medical services are being denied more than others? And predictive analytics can predict future trends in denials based on your past data. Together, these tools can give you the actionable insights you need to develop a targeted denials management strategy.

Invest in ongoing training and stay up-to-date on payer requirements.

Rather than waiting to conduct training when you have lots to cover, try conducting mini-trainings with your staff as needed to go over new payer policies, trends you’ve noticed, and any other best practices.

Since payer policies on pre-authorizations and eligibility change over time, effective denials management requires staying abreast of what’s new. By knowing which procedures newly require pre-authorizations, for example, you can reduce denials from the outset.

Overturn More Denials with Revco

Denials management is complex and resource-intensive, and finding the right partner can be the difference between a 15 and 5 percent—or lower—denials rate. 

At Revco, we specialize in supporting our clients with data-informed, efficient denials management. No matter what stage a denial is in, we’ll work diligently to guide it to a positive outcome and report back as we see patterns and trends emerging to help you prevent denials before they happen. 

If you’re ready to win more appeals and free up more cash flow, explore our strategic denials management services today.