Are You Losing Revenue from Improperly Handled Denials?

June 17, 2014

By Michelle Miller, Vice President
June 13, 2014

During a recent audit for one of my clients, I was working through some random CMS denials and noticed that several special stains had been denied. There were eight units billed and ALL had been denied by CMS and adjusted by the biller. Yet I know that the CMS National Coverage Determination (NCD) allows billing for one unit – why was that unit not approved?

I spoke with the billing agency and was informed that CMS will typically deny ALL charges — even if one should be approved — until the appeal is made. If the documentation supports the additional units, then CMS will make payment on all the unit(s).

Typically, when a biller receives a denial letter from CMS, they begin to step through the five levels of appeal, starting with Redetermination. The biller sends copies of supporting documentation for the denied CPT code(s), and if the documentation supports medical necessity, CMS will make payment. If not, the denial is upheld, and the biller will move on to the next level of appeal, Reconsideration, and so on down the line until the claim is paid, or all levels of appeal have been exhausted.

There is one key factor to the CMS appeals process – the initial Redetermination request must be filed with 120 days of the initial denial.

The denials I reviewed were from December 2013. The date today is May 16, 2014. The billing agency failed to appeal the denied charges within the allotted 120 days. At this point, we’ve lost out not only on getting paid for all units billed, but also on getting paid for the one allowed unit.

While these denials are for CMS, imagine how many this billing agency receives for the rest of the insurance carriers they file to. What are each carrier’s appeal rules? Have we missed any other filing limits for the appeal process? How much money is lying on the table right now?

Who’s watching your denials? If you do not regularly review and discuss denial reporting with your billing agency, you will lose revenue. The billing agency should be able to provide feedback and information regarding the denials they are receiving from all insurance carriers they bill.

Michelle Miller is the Vice President of Vachette Pathology and Stark Medical Auditing. Our company specializes in auditing billing for hospitals, independent testing facilities, and hospital-based providers.  Visit our websites: and Our direct line is 866.407.0763.

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