This is the third in a series of blog articles on the latest denial and appeals trends. This article focuses on appeal trends. If you missed the first two articles in the series, you can find them here:
- Part 1 focuses on the importance of physician engagement in minimizing denials.
- Part 2 focuses on current denial trends.
This series is based on a recently published whitepaper, “Overcoming Reimbursement Compression: The Latest Trends in Denials and Appeals Management for Laboratories and Pathology Practices” that provides an in-depth analysis of more than 25 million of XiFin customers’ claims to understand the latest trends and offers a strategic approach to automate critical tasks that save time and improve appeal success.
While front-end edits mitigate denials, and capturing issues proactively is the most effective way to maintain a manageable AR, some level of denials are unavoidable. Not all issues can be addressed at the front end of the revenue cycle management (RCM) process. Denials for additional information are a perfect example. It indicates that the payor is requesting additional information on services performed before issuing payment. These denials can be appealed but an organization must wait for the denial before it can act.
With these types of denials, a robust appeals process with automation is critical. In molecular testing, in particular, appeals carry a heightening impact on revenue collection. In 2020, XiFin found that appeals accounted for 5% of the total revenue generated by XiFin customers. In 2021, that rate increased to 6.5%.
Based on an analysis of 25 million claims with 2021 dates of service, XiFin found that payment collection per appeal continues to be stable both in the pathology segment and the clinical segment. Revenue recovered by corrected claims is excluded from the data seen in the chart below, since these claims follow a separate process and impact denial codes such as CO97 (procedure or service isn’t paid for separately), CO18 (duplicate), and CO234 (procedure not paid separately).
Furthermore, a single appeal attempt is not sufficient. While the volume of appeals decreases with each attempt, the success of collecting each round remains consistent.
Appeal Trends: Clinical Laboratory
The clinical laboratory segment contributes the lowest volume of denials. Low denial volumes, however, do not negate the need for robust editing processes. Implementing robust front-end logic and leveraging intelligent automation to correct potential issues dramatically streamline the process from submission to payment, especially in the high-volume clinical laboratory segment.
As illustrated in the chart below, many appeals are paid after the second or even third attempt. This is why an automated, cost-effective appeals process is valuable, even in segments with a low overall volume of appeals.
Appeal Trends: Molecular
At $1,420, the average payment per appeal for molecular testing is more significant due to the high-dollar value of the testing. As demonstrated in the chart below, Additional Information appeals account for 47% of the total appeals filed by XiFin customers in 2021 in the molecular segment and have an average success rate of 23%. Another 23% of appeals are for molecular diagnostic claims denied for medical necessity, followed by prior authorizations at 11.4% of total appeals filed. Prior authorization appeal volumes have remained consistent year-over-year in the molecular segment, averaging 10% in 2020, despite a higher volume of prior authorization requirements than in the pathology or clinical laboratory segments.
XiFin’s RCM platform, XiFin RPM, has integrated automation with prior authorization vendors allowing claims meeting prior authorization criteria to be submitted to a prior authorization solution automatically. Utilizing “real-time data exchange” via application programming interfaces (API) with our partners, XiFin RPM can more quickly acquire the necessary prior authorization number and update the patient’s information in XiFin RPM upon those values being returned.
Barring any additional issues, the accession is submitted to the payor – with prior authorization included and minimal need for a user to touch the claim or spend time making authorization requests by phone. Considering it may take an individual an average of 20-30 minutes to acquire a prior authorization manually, this process significantly reduces the back-end burden of appeals. Timely filing, underpayment, and out-of-network appeals, while smaller in volume, are still fruitful in recovery, particularly in the second and third attempts.
Appeal Trends: Anatomic Pathology
Approximately 2% of the pathology accessions received by XiFin require an appeal. Those appeals will be responsible for approximately 1-2% of the pathology practice’s revenue. Although the revenue reclaimed in the pathology segment is largely attributed to the first attempted appeal, a robust process that includes multiple attempts is critical in revenue recovery in the event the first appeal is not overturned.
The most common appeals in pathology are in response to “Additional Information Required” to adjudicate the claim denial codes. For example, appeal responses for denial code CO252 could include submitting the pathology report for review, providing additional detail on the utilization of unspecified codes for services rendered, and providing medical records or prior authorization codes.
Additional information requests are consistent and predictable, determined by the denial code received. Where there is consistency, there is the opportunity for automation. Automating the packaging and submission of appeals saves time and cost and improves the timeliness of payment.
Where there is consistency, there is the opportunity for automation.
Using CO252 as an example, the process for responding is exactly the same every time. XiFin RPM can be set to automatically pull the pathology report, generate a CO252-specific appeal letter, complete a payor-specific form (if required), package the documentation and submit via paper through a print vendor. When automated, CO252 denials are bundled and sent for print within a day of receiving the denial – without a user’s need to touch the accession. In the event the payor requires a portal submission, documentation is still stored on the accession in XiFin RPM, saving significant time when manual intervention is required.
Medical necessity denials, however, can be more tedious, depending on the test and payor mixes. The XiFin RPM platform houses logic to drive appeals based on specific payor ID, denial reason code, and CPT. This ensures that as more complex denials are received, those more nuanced denials are automated. This, in turn, mitigates burden to the billing team (e.g., cost to collect is reduced).
Want to learn more? Download the whitepaper to see the complete analysis of denial and appeals trends, as well as to learn XiFin’s recommended practices to enhance productivity and optimize the efficiency of your appeals process through automation, improving both the speed and propensity of reimbursement.