Appeals vs. Resubmissions: What Every Billing Team Needs to Know
Every billing team experiences that one familiar moment where you have received a claim denial, and now you need to decide whether to re-submit it or file an appeal for it. But that decision is more important than you think, because taking the wrong route does not only cost valuable time but could also shut the door on your chances of ever getting back that lost revenue.
It is one of the fundamental responsibilities of good revenue cycle management to understand the difference; and doing so consistently is what sets effective billing processes apart from those that let denied revenue go unrecovered.
What Is the Difference Between a Claim Resubmission and an Appeal?
Resubmission involves sending an adjusted or corrected claim back to the payer. This happens when there is an error in the original claim resulting in a denial. Inappropriate coding, inaccurate patient data, lack of modifier, billing the wrong payor... these are all instances where you would be dealing with resubmissions. Basically, the original claim was wrong, and the revised claim is now being resubmitted as a new claim.
An appeal is challenging the payer's decision with regard to a claim that had been processed correctly. Information was accurate, and services were covered, but the claim was still denied for whatever reason; medical necessity, coverage determination or even for a bundling decision that was believed to be incorrect. The appeal is arguing against the decision of the payor using documentation and supporting evidence.
Appealing when a resubmission is due results in wasted time and possible loss of the right to file timely. Resubmitting a claim that should have been appealed is accepting the denial and giving up on the money forever.
How Do You Know If A Denied Claim Needs Appeal or Resubmission?
First, look at the code used to reject the claim. Wrong information, missing information, or the wrong payer in claims submission indicates resubmission. Coverage denials, medical necessity, and bundling indicate appeal.
To make it easier, ask yourself one question: Was the claim submitted properly? If yes, then the insurance company has made a decision based on which you can file an appeal. But if not, the claim needs resubmission!
What Are the Most Common Reasons a Claim Needs Resubmission?
Most common reasons that a claim needs to be resubmit and an appeal won’t work are incorrect patient information or insurance information. Wrong details of the billing or rendering provider, missing or faulty diagnosis codes, claims sent to the wrong payer when coordination of benefits applies, Procedure codes submitted without required modifiers etc. Are clear cases of resubmissions as well.
Each of these represents a correctable error, that is the clinical service was legitimate, but the claim paperwork didn't reflect it accurately.
When Does a Denied Claim Warrant a Formal Appeal?
A payer's decision can be disputed on contractual or medical grounds. This includes denials for medical necessity when documentation proves the case, denials for services that the plan actually covers, and bundling errors where modifier 59 could have been used to prove distinct services. It also includes cases where the payer disputes a legitimate authorization. Appealing claims takes more effort than simply re-billing, but that money will never be recovered if an appeal is not filed.
How Does Tracking the Difference Improve Revenue and Profitability?
If denials are frequently misclassified by billing personnel due to appeals for what needs to be resubmitted and resubmissions for what needs to be appealed, then there is no high efficiency in the revenue cycle processes. Claims go through the wrong workflow; the deadline is nearing while there is no resolution; and there is no chance to save that money anymore. Denial tracking with the aim to classify and follow the right procedure for each denial helps improve revenue and profitability.
What Should Billing Teams Track After Every Denial Resolution?
Billing teams should track the reason for denial, method of resolution, timing of resolution, and the outcome. These trends in data determine if particular reasons for denials are being corrected properly, if certain payers require a different strategy, or if resubmission mistakes stem from recurring front-end issues that cannot be fixed by any workflow correction alone.
It's not a matter of technicality but a question of money, deciding if an appeal or a resubmission is needed, several hundred times per month. The systematic approach to this issue yields more recovered denied revenues than the reactive approach does.
Billing Services Texas by Eminence RCM offers all the denial management skills that make this process a matter of revenue protection rather than a guessing game for any healthcare provider in Texas.
Contact Eminence RCM today and start recovering the revenue your practice has already earned.
Frequently Asked Questions
In a resubmission, the claim that had errors is corrected and resubmitted; coding errors, erroneous patient data, lack of modifier code, etc. A claim appeal, however, questions a payer's denial of the claim... it was not done correctly, and the denial was not valid according to the documentation or contractual terms. Choosing an improper method will delay the process and potentially lead to lost revenues.
Look at the reason code of the denial first. If there were errors in the claim, correct it and resubmit it. In case the claim was accurate, but the denial can be appealed because of the need, coverage or bundling reasons, submit an official appeal. The first step always is going to be looking at the reason code and rest is explained in that only.
The resubmitted claim will be handled like any other new claim, without disputing the initial denial. If the issue is not resolved, there may be another denial for the exact same reason. In the meantime, the period in which to file an appeal to the denial may have passed, which would effectively make it impossible to recover the funds. Filing a resubmission when it could just have been appealed leads to lost funds faster than ever!
The duration given for appealing the denied claim depends on the specific payer and what kind of plan it is. In the case of Medicare, 120 days from the denial date is usually available to appeal the denial. On commercial plans, it ranges from 30 to 180 days. It is important to stay on top of the denial dates and deadlines since missing them makes the denial final.
Yes, when the claim had both a fixable error and a disputable decision by the payer. Fixing the error is done through re-submission, while the dispute of the decision made after correction of the claim will be done through the appeals process. Each process will require its own set of documents and timelines.
Effective denial management involves classifying each denial, sending it to the appropriate procedure to resolve, managing timetables, and analyzing denials. It brings revenues that would otherwise have been lost using reactive methods. Practices that use an effective denial management system end up collecting more money compared to those that use an individual case approach to manage their denials.
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