Appendixes
CPT copyright 2017 American Medical Association. All rights reserved.
VI. Effective Health Plan Appeals: The Ins and Outs
I. Know How and Why to Appeal Inappropriate Health Plan Claim Denials
II. Supporting Your Appeals for Payment
III. Elements of an Effective Appeal Letter
IV. Sample Appeal Letter: Well/Sick Same Day
I. Know How and Why to Appeal Inappropriate Health Plan Claim Denials
It is estimated that physicians are losing billions of dollars in revenue each year by not appealing inappropri-
ate claim denials.
There are many reasons why physician practices do not appeal denied claims; the most common is that
they believe appealing claims will create an increased administrative burden on the practice. However, not
appealing denied or partially paid claims can be quite costly to your practice and can often result in decreased
revenue. Since health plans have introduced claims editing software into their claims processing systems, they
have generated an increased number of inappropriate claim denials and reductions in payment. An effective
way for your practice to combat these erroneous payment reductions and denials is to be diligent in submit-
ting appeals.
Why Appeal?
When your practice increases its appeals for wrongfully underpaid or denied claims, the health plan may cor-
rect its claims editing software and processes. This, in turn, may result in improved claim processes and appro-
priate payment to your practice for the provision of health care services. The 12 steps under How to Simplify
the Claim Auditing and Appeals Processes below simplify the claim auditing and appeals processes and can
help to reduce your administrative burden. These processes make it easy for your practice to identify and
appeal health plan claim denials when the health plan misapplies the American Medical Association Current
Procedural Terminology (CPT®) codes, guidelines, and conventions or the health plan’s contracted policies.
When a physician performs a procedure or service and then reports according to CPT codes, guidelines, and
conventions, the health plan should recognize the physician work involved in providing this patient care. To
ensure that your work is recognized, your practice should identify all inappropriate claim denials and commu-
nicate with the appropriate health plan representatives through each plan’s claim appeals processes.
What Is Lost When Your Practice Does Not Appeal?
When your practice does not audit and appeal inappropriately paid or denied health plan claims, you may
lose revenue. You also may lose the opportunity to recover overhead expenses by not implementing a claims
management process. This process is your practice’s internal designated work flow for accurately preparing,
submitting, and collecting on claims. When you challenge inappropriate claim payments, you demonstrate
that your practice has made an effort to correct the plan’s inaccuracy. This could lead to a positive change
in the health plan’s business practices. Appealing claims that are inappropriately denied by health plans can
make a difference in your practice by reducing future denials.
For additional information, there are 2 easy ways to contact the American Academy of Pediatrics (AAP)
Private Payer Advocacy Advisory Committee.
1. Go to www.aap.org/en-us/professional-resources/practice-support/financing-and-payment/Pages/­
Private-Payer-Advocacy.aspx (AAP members only).
2. Contact the AAP Coding Hotline at aapcodinghotline@aap.org.
How to Simplify the Claim Auditing and Appeals Processes
1. Know the health plan’s claim appeals processes before you need to submit a claim appeal. Understand-
ing these processes will allow you to acquire the health plan information (eg, supporting documentation,
health plan language) required to prepare a claim appeal.
2. Know where to locate the following health plan policies and, if possible, include them in the health plan
contract:
Claim adjudication procedures (ie, definitions of complete or clean claims and medical necessity)
Rates and payment methodology, including a comprehensive fee schedule
Claim appeals processes
3. Document, document, document. The supporting documentation of a claim submitted to a health plan
must substantiate the performance of a service by the treating physician or health care professional. If a
service is not documented, it didn’t happen in the eyes of the health plan, and the claim may not be paid.
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