Managing Preauthorization Denials

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Managing Preauthorization Denials


How to Effectively Manage Denials

Despite a comprehensive approach to pre-approval, you will encounter denials from health plans. These denials may be a result of medical management (a.k.a. preauthorization) or billing/reimbursement (e.g. claim) processes. The following guide is based on industry standard preauthorization appeals processes.

Most private health plans have a three-level documented appeals process. Refer to your provider manual, health plan internet site, or contact the health plan to obtain the appeals policy specific to each health plan.

First Level

Many times the most effective way to win an appeal is through a conversation between the provider (surgeon) and health plan's Medical Director.

  • Ask for peer-to-peer (surgeon to medical director) phone call.
  • Schedule the peer-to-peer discussion at a time when your provider is available.
  • Talk to your provider and develop a strategy.
  • Compile the patient's information for your surgeon so he/she can effectively address all issues.
  • Provide information to demonstrate patient value such as shorter recovery times, faster return to work, and decreased length of stay, quality of life improvements, etc.
  • Focus on the benefits of the implant technology and medical necessity/value to the patient based on their particular symptoms, diagnosis and co-morbidities.
  • Compile talking points to help the medical Director understand the difference between a "hearing aid" and an implantable hearing device.

Second Level

  • Appeal in writing addressing the specifics of the denial.
  • Further justify the medical necessity and value to achieve a successful patient outcome.
  • Add new information, if applicable.
  • Draft an interesting and compelling letter.
  • Obtain the correct address & phone number for appeals.
  • Request an independent review by a peer of the same specialty.
  • Include successful outcomes & experience of the surgeon:
    • Physicians supported.
    • Approval percentage.
    • Number of cases.
  • Develop rapport with medical directors and provider relations representative.

 

Third Level

Request an outside peer-to-peer review from a board certified physician of the same specialty (otolaryngology or ear, nose and throat physician/surgeon).

 

Sample Letter

Date
<Insurance Company>
<ATTN: Medical Director>
<Address 1>
<Address 2>
<City> , <ST> <Zip>

RE:     Patient Name
           Member Identification Number
           Group Number

Dear <Medical Director>

Include the following major points in your appeal letter.
  •    Reason for filing an appeal (denial of coverage, medical necessity, etc.)
  •    Date of denial/denial letter (if you need to reference it in the appeal letter)
  •    The denial reason and associated denial code if applicable.
  •    Patient's diagnosis and course of treatment including adverse outcomes.
  •    Description of the surgery in detail, including associated procedure codes.

Given the advantages of the Baha® auditory osseointegrated implant or cochlear implant technology and the clinical status of [PATIENT NAME], I feel that a Baha or cochlear implant is the best surgical option for this patient. It is my professional opinion that the surgical technology is warranted, appropriate, and medically necessary. Please call my office at [INSERT PHONE NUMBER] if I can provide you with peer-reviewed literature demonstrating the positive effects of this technology or any other information you may need to make your decision. I look forward to your timely response and approval for the necessary treatment of this patient.

Sincerely,


Physician

 

 

Sample Explanations for BAHA®

The Cochlear™ Baha® system is NOT a hearing aid because:

  • The Baha® system is an implantable osseointegrated implant with percutaneous attachment to an external sound processor/ cochlear stimulator.
  • The Baha® system converts sound pressure into mechanical vibrations and, via direct bone conduction, stimulates the individual's functioning cochlea; allowing the otherwise hearing impaired individual to hear.
  • Hearing aids amplify sound and direct the amplified sound wave to the ear canal.
  • Candidates for the Baha® system do not benefit from amplification of sound.
  • The Baha® system is cleared by the FDA as a Class II medical device. Hearing aids, in contrast, are Class I medical devices.
  • Mr. /Ms. ____ cannot derive benefit from use of a conventional hearing aid due to (insert diagnosis and/or condition that precludes their use).

Baha® system denied as not medically necessary:

  • (Patient's name) suffers from ___ (insert diagnoses) and has a hearing loss of ___ db.
  • (Patient's name) cannot wear hearing aids because (insert reason why external hearing aids aren't tolerated by patient).
  • Indicate treatments that have been tried and have not been acceptable or failed resulting in many costly expenses: (insert list of treatments with explanation of failure, length of time used and any related costs involved if possible).

Explain how the patient's diagnosis or condition:

  • Puts them at a disadvantage in such situations as: at school, in the workplace, at home, socially, and in life in general.
  • Impacts their safety and (if applicable) inability to hear environmental sounds and/or detect the direction of sounds.
  • Explain how and why binaural hearing is superior to monaural hearing (cite appropriate medical journal articles).
  • Explain why treatment with the Baha® system is preferred over other treatments (if applicable) or leaving the patient untreated.
  • Clearly state that there are no alternative treatments available for your patient and that it is unconscionable to deny him/her the opportunity to hear when there is a viable treatment available.
Sample Explanations for Cochlear Implant

The most common reason for denial of benefits for the cochlear implant system will be "hearing aids are excluded from the benefit plan." If this is the case, we recommend appealing immediately.

  • The appeal should clearly distinguish hearing aids from the cochlear implant system. The following steps are recommended:
    • Contact the medical Director at the insurance company to discuss this case specifically and to further explain the cochlear implant system.
    • The cochlear implant system is not a hearing aid, but rather it is a prosthetic device and therefore, based on medical necessity criteria, should be covered under the patient's medical benefits and not excluded from the patient's benefit plan.
    • The cochlear implant system has been cleared by the FDA as a Class III device, whereas the FDA considers hearing aids to be a Class I device.
    • Clarify the difference between the cochlear implant system and hearing aids. explain that patients that qualify for a cochlear implant do not benefit from hearing aids. hearing aids amplify sound, whereas cochlear implants restore sound.
    • Explain that there are no alternative treatments for your patient.
  • Instruct the patient or family member to lodge a complaint with the insurance provider, the subscriber's employer and with the state insurance commissioner.
  • Reference peer-reviewed literature in your letter to support clinical decision and position regarding medical necessity. Attach white paper referencing additional peer-reviewed literature to support your position.
  • Provide contact name and phone number and willingness to provide additional information and/or answer questions.
  • Request a specific time frame for a response.

 

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