Harmony Healthcare Blog

Medicare Denied Claims – How the Appeal Letter Can Make Or Break You

Posted by The Harmony Team on Tue, Jul 15, 2014

Many facilities believe they can relax due to the announcement that the Recovery Auditor Contractors (RACs) are taking a temporary break.  Unfortunately, this is not the case, as facilities can still fall prey to audits by Medicare Administrative Contactor (MACs), Zone Program Integrity Contractor (ZPICs), and Comprehensive Error Rate Testing (CERT) audits.  It is imperative that facilities continue to be vigilant in their efforts to monitor for Additional Development Requests (ADRs) and promptly address any received. 

Part of the ADR and appeal process should be the inclusion of an appeal letter, also known as a justification letter or what Harmony refers to as the Proper Reimbursement Explanation Paper (PREP).  This is an additional document written by the facility explaining the skilled care provided to the patient.  Although some facilities choose not to send one until they need to appeal a denied claim, Harmony (HHI) recommends also including the PREP at the ADR level.  This letter presents an opportunity to describe and justify the skilled services that could only be provided in the skilled nursing facility as well as the RUG score billed.  A well-crafted PREP can guide the intermediary through the thought process of the staff, act as a roadmap for navigating the medical record and persuade the reviewer that the services were indeed skilled and medically necessary.

The following are five tips to keep in mind when composing your PREP: 

  • All medical records are different.
    • It takes time to understand the ins and outs of each facility’s documentation, such as what information is located on certain form and how to interpret the documents included.  Intermediaries review a record in about 10 minutes, which does not leave much time to learn and understand your facility’s documentation techniques.  Your PREP is the perfect tool to guide reviewers through your medical record.  Reference specific dates and documents when describing the skilled care provided.  You may even choose to go so far as to reference specific page numbers.
  • You don’t know your reviewer.
    • Most auditing agencies hire nurses, therapists and coding experts to review medical records.  You may have provided the patient with excellent skilled therapy services, but if your reviewer is a nurse or a coding expert (as they most likely will be), they may not perceive the skilled services the same way the therapy staff does.  A detailed PREP outlining the skilled services is imperative.  Do not be afraid to include definitions of standardized tests used, explanations of diet textures, details of specific procedures and techniques, and why a decline should be considered a “significant decline.”  It is in the facility’s best interest to assume someone from another discipline may be reviewing the record and detail the PREP accordingly. 
  • Choose your details wisely.
    • Your medical record is overflowing with details of your patient’s stay and your job is to determine which details to pull into the appeal letter.  Start with a basic framework of background information (including prior level of function, past medical history, and details of the acute hospitalization), daily skilled nursing services and gains made in therapy.  If there are no concrete gains made in therapy (i.e. progress from one level of assist to another), ensure additional details of an alternate measureable service are included.  
    • Based on your knowledge of Medicare guidelines, choose the details that will best highlight the skilled needs of the patient.  For example, a patient has always used a C-PAP at night, continued to do so during the skilled stay, and was primarily skilled secondary to an uncomplicated total knee replacement. Stating that the patient was skilled for observation and assessment related to use of a C-PAP may actually diminish your argument rather than support it.  Only include details that directly relate to the skilled care provided.
  • Paint the interdisciplinary picture.
    • Your medical record may have a note from the Dietary Department documenting poor intake, an MD note referencing low blood sugars, a Braden score that qualifies the patient as high risk for skin breakdown and nursing notes that reflect encouragement for out of bed activities.  Your PREP needs to take all of those elements from the medical record and paint the interdisciplinary picture of care.  How do all of those items interrelate? What were the risk factors for not having daily nursing care? How does the combination of those services elevate the patient to a skilled level of care?
  • Know your Medicare guidelines.
    • One of the best ways to argue your facility provided skilled care to a patient is to outline the services provided and tie each one back to the Medicare guidelines that support them.  Intermediaries tend to use blanket statements such as, “services were not reasonable and necessary” or “does not meet SNF care requirements.”  Your appeal letters should directly address these potential areas for denial at the Additional Development Request (ADR) level.  Explaining how the services provided met the definition of medically reasonable and necessary care can potentially stop the Medical Review process in its tracks.   

Harmony (HHI) has had the privilege of composing hundreds of PREPs for facilities over the past two years, with the average amount of the claim at risk being $11,000.  Based on the services we have provided for our customers, we have found that a strong medical record with a detailed PREP will stop the process at the ADR level a high majority of the time.  

Though it is ideal for us to help facilities from the onset of the process, we also assist facilities after they have attempted the ADR process without our guidance.  Most facilities are able to manage meeting the technical criteria outlined by Medicare, such as physician orders for therapy services, legible and timely signatures and completed certification forms. Therefore, it is not surprising that most facilities seek our assistance when the reason for denial is based on medical necessity.  When we appeal the denial with a well constructed PREP, using our extensive knowledge of Medicare guidelines and regulations, our arguments for medical necessity have a 62% success rate.  The numbers speak volumes.  The time and energy put into preparing the medical record, and developing a PREP before sending the information to the intermediary, is a valuable investment in the audit process. 


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Topics: Medicare Denied Claims, Medicare Denied Claims Appeal

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