Insurance credentialing checklist for therapists
If you’re looking for information on how to appeal a denied insurance claim, you’re in the right place. This article includes an insurance claim letter template along with tips for appealing claim denials.
Therapists and clinicians who bill insurance can expect to occasionally have to deal with claim denials.
There are many reasons a claim may be denied. Therefore, you may be wondering how to fight insurance claim denials.
This article helps you understand what to do if insurance denies a claim and provides a free insurance claim letter template that you can customize for your practice’s needs.
What is an appeal?
An appeal (or dispute) is a process where you formally request that the health plan reconsider a treatment denial or a claim payment or non-payment.
You may also use this process to ask for an exception to the insurance plan's policies.
Appeals are then reviewed by the health plan's Appeals Committee.
You may sometimes ask for an expedited appeal if you need immediate approval to continue necessary treatment.
How to appeal a denied insurance claim: Steps to take
Looking for steps on how to appeal insurance denials?
Each plan has different policies for handling appeals.
Follow these tips and considerations below.
1. Your first response should be to make a phone call.
While wait times to reach a live person can sometimes be lengthy, talking to a health plan representative often allows for a better understanding of the reason for the denial and speeds up the resolution.
The claims department can often quickly identify their errors on the phone and can resubmit claims for reprocessing, avoiding the need for you to appeal.
Other times, they can help you identify your error, and you can resubmit a corrected claim.
Ask the plan if there is a way to expedite resubmissions (such as a fax number you can send it to).
Here are some tips for how to appeal a denied insurance claim via phone:
- Take time to review the case before calling. Have the client’s chart with name, date of birth, ID number, dates of service, total amount billed, claim number, and other relevant information.
- Put aside 30 to 60 minutes for the phone call. You may have to be put on hold, get transferred, get cut off and need to call again, or need to talk to several people at the health plan. You don't want to hang up frustrated, with the matter unresolved, and have to call again.
- Record the names of all those you speak with, dates and times of conversations, what they say, and for every call, get a call reference number. Record any actions you need to take regarding the denial, and mark follow-up dates on your calendar.
2. If you cannot get the matter resolved by phone, submit a written appeal.
Ask the health plan representative for details about the insurance appeal process or dispute resolution process, what to include in your insurance claim letter, and where to submit it.
Some information outlining the plan's appeal and dispute procedure should also have come with the insurance denied claim.
In the appeal, include details such as:
- Client name
- Client date of birth
- Client health plan ID
- Subscribers name, date of birth, and health plan ID (if different from client)
- Claim ID number (if it has been processed)
- Date of all sessions
- Total billed and total paid on the claim
- How you feel the claim should have been paid and why, or what exception to their policies you are requesting
Also, attach to your appeal:
- A copy of the Explanation of Benefits (EOB), the form that explains how the claim was processed
- A fresh new claim form for the dates of service, so it can be reprocessed
- Any supporting documentation backing up your argument
You can download a sample insurance claim letter template at the top of this article and edit it according to your specific situation.
3. Be sure to file your appeal in a timely fashion.
Most insurance companies require that you submit your appeal within a certain period after the denial (e.g., 30 or 60 days), or else you may waive your right to appeal.
4. Did the health plan deny payment because they did not feel treatment was medically necessary?
If so, edit the insurance claim letter template to include relevant clinical information with your request for reconsideration.
It may be helpful to provide session notes for the dates of service or a treatment summary that backs up the client’s diagnosis, symptoms, impairment, and your treatment plan aimed at this diagnosis. When writing progress notes, it’s important to always back up the diagnosis and need for treatment.
Your client may have the right to receive, upon written request and for free, information the insurance plan used to review the initial claim or treatment request.
This information can assist in an appeal.
5. Was your claim denied because you didn’t have the required authorization in place on the date of service?
If so, call the plan—you may need to talk to a case manager.
Sometimes you can get them to retro-authorize (back-date) a treatment authorization for that date of service.
Then, resubmit the claim with a note attached, including the new authorization number.
6. For network providers, was the service you provided (or intend to provide) a covered service?
If the service you provided (or intend to provide) is not a covered service, update your insurance claim letter template to defend why the plan should make an exception in this case.
Focus on cost-efficiency and most effective symptom-reduction. Provide evidence and research, if possible, about your treatment efficacy.
7. Was your claim denied because the client has an HMO or EPO plan which only covers network providers, and you are not an in-network provider?
In this situation, you or the client may call or write an appeal letter to the health plan (perhaps with supporting documents from you and/or their doctor) that states the reasons they went to an out-of-network provider, along with the reasons they believe you are the best provider to see.
Insurance may pay for out-of-network services when a case can be made that you have qualifications that network providers within a reasonable proximity don't possess.
8. You could try contacting the health plan’s clinical director.
If your appeal is unsuccessful, or you are turned down for more sessions after a telephone clinical review with a case manager, you could ask for a phone appointment to speak to the plan’s clinical director.
The clinical director may have the power to overrule a case manager's decision to end coverage of your sessions with your client.
9. Get help from outside the health plan.
Attorneys at your professional organization can often give you advice on how to challenge a denial, or which section of law to cite when appealing.
You may also get advice from your state’s Department of Insurance (and/or the state’s Department of Managed Health Care, if you have one in your state).
This is an appropriate step to take if your appeal with the plan is denied, or if you have not received a timely response from the health plan.
Filing a complaint at the state level is a powerful but under-utilized tool therapists can use to get needed payment or treatment.
When a health plan is denying, delaying, or modifying a service or service frequency because it does not believe the service is medically necessary, they feel it is experimental, or they won't cover a service already provided, you (or your client) may be able to request an Independent Medical Review (IMR) from your state’s Insurance (or Managed Care) Department.
Each state has different rules as to who can file the complaint, and whether they require that you first utilize the health plan's internal dispute resolution process.
However, typically, the case will be reviewed by experts who are not affiliated with the client's health care plan.
You often can use this process even if you are an out-of-network provider.
You may be able to request an expedited review of the grievance for cases that involve an imminent and serious threat to the health of the client if treatment is disrupted.
10. The client may be able to get their employer's benefits manager involved, asking them to contact the plan on the client's behalf.
Note that only a client should initiate contact with a benefits manager.
This can be highly effective.
Because the employer pays the premiums, the employer’s benefits manager may have more clout at the plan to cut through red tape.
While cost containment is important to healthcare organizations, employer satisfaction is vital to their survival.
They know that if enough clients complain about their health plan to their employer, the employer may find a new plan.
Clinical issues and considerations
Denied insurance claims can affect your clinical work—here are some common issues that may arise when determining how to appeal a denied insurance claim.
Talk to your client
You’ll need to decide together whether the client will continue to see you if it is unclear if you will be reimbursed by the health plan for their sessions.
For a crisis case, you might seek an expedited review with the health plan, so that the outcome can be determined in a matter of days.
Be sure that the client is aware of any financial responsibility they might have if they continue in therapy and if the health plan doesn’t pay.
Beware of building up a large potential debt with a client if the health plan denies your appeal.
What if the service will not be covered?
If the service won’t be covered, the client may choose to pay you out of pocket for future services.
In this case, it is wise to have the client sign and return a Private-Pay Agreement, stating that the client understands that he or she is obligated to pay for the services to be rendered since they are not covered by the health plan.
The Agreement should outline fees and other payment details, and should be signed by the client in advance of providing any out-of-pocket services.
Must you help out-of-network clients to appeal if their superbill is denied by the plan?
Some professional associations have ethical standards that require their therapist members to advocate for treatment they believe will benefit clients, and to assist clients in seeking reimbursement from their plan.
Assisting a client with an appeal may even be required by state law.
However, if you are not willing to do this, clients should be notified in writing in advance as part of your Treatment Agreement or Informed Consent.
Denials are a routine aspect of working with insurance, which is why it’s so important to learn how to appeal a denied insurance claim.
By being organized, understanding the appeal process, making reasonable arguments using an insurance claim letter template, and responding promptly, you can minimize any income loss related to denials.
How SimplePractice streamlines running your practice
SimplePractice is HIPAA-compliant practice management software with everything you need to run your practice built into the platform—from booking and scheduling to insurance and client billing.
If you’ve been considering switching to an EHR system, SimplePractice empowers you to run a fully paperless practice—so you get more time for the things that matter most to you.
Try SimplePractice free for 30 days. No credit card required.
