Denied claims are a common challenge for waiver providers working within the Medicare and Medicaid systems. A denial can occur for various reasons, from incorrect documentation and coding errors to eligibility issues. While these denials can disrupt cash flow and increase administrative workload, they don’t necessarily mean that reimbursement is lost. Providers can appeal denied claims and, with the proper process, correct errors and resubmit claims for faster payment. 

1. Understanding Why Claims Are Denied 

Before diving into the appeals process, it’s important to understand the most common reasons why Medicare and Medicaid claims are denied. Knowing the root cause of denials helps providers address issues more effectively and prevent future rejections. 

Common Reasons for Claim Denials: 

Incorrect Coding: Using the wrong ICD-10, CPT, or HCPCS codes can lead to denials, especially if the codes don’t match the services provided or if outdated codes are used. 

Incomplete or Inaccurate Documentation: If the claim lacks sufficient documentation to justify the service or does not meet medical necessity requirements, it may be denied. 

Eligibility Issues: Claims can be denied if the patient was not eligible for Medicare or Medicaid at the time of service, or if there were errors in the patient’s insurance information. 

Service Not Covered: Some services may not be covered by Medicare or Medicaid, or the service provided may be considered not medically necessary for the diagnosis. 

Timely Filing: Each payer has a deadline for submitting claims. Claims filed after the allowable period may be automatically denied. 

Once you understand the reasons for denial, you can begin the appeals process to correct the issue and seek reimbursement. 

2. Step-by-Step Guide to the Appeals Process 

Appealing denied Medicare and Medicaid claims can seem daunting, but following a clear process can improve your chances of a successful appeal. Here’s how to handle the appeals process step by step: 

Step 1: Review the Denial Notice 

When a claim is denied, the payer (Medicare or Medicaid) will issue a denial notice explaining why the claim was rejected. This notice, called an Explanation of Benefits (EOB) or Remittance Advice (RA), contains critical information such as: 

• Denial Codes: Specific codes or messages that indicate the reason for the denial (e.g., missing documentation, incorrect coding, or eligibility issues). 

• Details of the Denied Claim: Information about the services that were denied, including dates of service, the billed amount, and the participant’s insurance details. 

• Next Steps for Appeal: Instructions for appealing the denial, including deadlines for submitting an appeal and any additional information required. 

Best Practice: Carefully review the denial notice and take note of the denial code and reason. Understanding exactly why the claim was denied will help you determine how to correct the issue. 

Step 2: Investigate and Gather Supporting Documentation 

Once you understand the reason for the denial, the next step is to gather all necessary documentation to support your appeal. This might include correcting any errors in the original claim or providing additional documentation to justify the service provided. 

Common Documentation for Appeals: 

• Patient’s medical records and progress notes 

• Corrected or updated billing codes (ICD-10, CPT, HCPCS) 

• Proof of patient eligibility on the date of service 

• Authorization forms or treatment plans 

Best Practice: Ensure that all documentation is clear, thorough, and accurately reflects the services provided. Double-check that the documentation aligns with Medicare or Medicaid’s requirements for the specific service in question. 

Step 3: Correct Errors and Resubmit the Claim 

If the denial was due to an error, such as incorrect coding or missing information, you may be able to correct the issue and resubmit the claim without filing a formal appeal. Medicare and Medicaid allow for claim corrections in many cases, provided they are submitted within the allowable timeframe. 

Steps for Correcting a Claim: 

• Make any necessary corrections to the claim (e.g., update billing codes, fix patient information, or add missing documentation). 

• Submit the corrected claim through your billing software or portal, ensuring all required fields are complete and accurate. 

• Verify that the corrected claim has been accepted by the payer and is under review. 

Best Practice: When submitting a corrected claim, include a clear explanation of the corrections made and reference the original denial notice to ensure clarity. Keep a record of all communications and submission dates. 

Step 4: File a Formal Appeal 

If correcting and resubmitting the claim doesn’t resolve the issue, or if the denial is based on a disagreement over medical necessity or service coverage, you may need to file a formal appeal. Each payer has its own appeals process, so it’s important to follow the guidelines carefully. 

Steps for Filing a Medicare Appeal: 

Medicare Part A & B: For Original Medicare, the first level of appeal is called a "redetermination." You can submit a redetermination request within 120 days of receiving the denial notice. Include the following: 

• A completed "Redetermination Request Form" (CMS-20027) or a written request 

• The participant’s medical records 

• A detailed explanation of why the services are medically necessary 

• Medicare Advantage & Part D: For claims under Medicare Advantage (Part C) or Medicare Prescription Drug Plans (Part D), follow the specific appeal process provided by the private insurer. This typically includes filing a request for reconsideration or appeal. 

• Steps for Filing a Medicaid Appeal: Medicaid appeals processes vary by state, so be sure to follow the specific guidelines provided by your state Medicaid agency. You may need to submit an appeal request to the state’s Medicaid office or the Managed Care Organization (MCO) managing the claim. 

• Submit all necessary documentation that justifies the medical necessity of the service and corrects any previous errors. 

Best Practice: Pay close attention to appeal deadlines, which are typically within 30 to 120 days of the denial notice. Provide as much detailed evidence as possible to support your case. 

Step 5: Track the Status of Your Appeal 

Once your appeal has been submitted, it’s important to monitor its progress. Both Medicare and Medicaid have timelines for responding to appeals, but the time it takes to receive a decision can vary. 

Medicare Appeals Timelines: 

• Initial redeterminations for Medicare claims are usually processed within 60 days. 

• If the redetermination is denied, you can escalate the appeal to the next level, which involves reconsideration by a Qualified Independent Contractor (QIC). This process can take an additional 60 days. 

Medicaid Appeals Timelines: Medicaid appeals are typically handled within 90 days, but this can vary depending on the state’s policies. Be sure to track the appeal using your state’s Medicaid portal or through communication with your MCO. 

Best Practice: Keep a record of all submission dates, correspondence, and appeal progress. Follow up with Medicare, Medicaid, or the MCO if you don’t receive a response within the expected timeframe. 

Step 6: Escalate the Appeal if Necessary 

If your appeal is denied at the initial level, both Medicare and Medicaid offer multiple levels of appeal. For Medicare, these include reconsideration, hearings before an Administrative Law Judge (ALJ), and review by the Medicare Appeals Council. For Medicaid, the escalation process may vary by state but generally includes a formal hearing process. 

Best Practice: If your appeal is denied at the first level, carefully review the denial reason and consider escalating the appeal to the next level. Provide any additional documentation or expert testimony if necessary to strengthen your case.