How to Win an Appeal with Blue Cross Blue Shield? Fighting Denials and Non-ERISA Policies

Healthcare providers are burdened with how to win an appeal with Blue Cross Blue Shield, unnecessary administrative work, and patient care is disrupted when insurance is denied. Increased approval rates and fewer claim disputes can result from understanding insurer strategies, appeal procedures, and legal protections under non-ERISA policies.

For instance, a 2023 analysis by the KFF reported that insurers of qualified health plans (QHPs) sold on HealthCare.gov denied 19% of in-network claims and 37% of out-of-network claims, averaging a 20% denial rate across all claims. Non-ERISA plans, which are regulated by state laws rather than federal ERISA regulations, provide different appeal rights and legal pathways.

These policies often require different approaches to reversing denials. Thorough documentation, clinical rationale, and compliance with state-specific deadlines are essential for successful appeals.

How to Understand the Common Reasons for Insurance Claim Denials?

Claims are denied by insurers for a variety of reasons, most frequently due to policy exclusions, technical errors, or lack of medical necessity. Common problems include the following:

• Incorrect Coding: Denials are automatically generated when CPT, HCPCS, or ICD-10 codes are incorrect. Rejection may result from even small differences in code selection.
• Lack of Prior Authorization: Many insurers require prior authorization for procedures, therapies, or treatments. If authorization is not obtained, the service will be denied, even if it is medically necessary.
• Medical Necessity Disputes: Even in cases where clinical evidence supports a treatment, insurers may argue that it is unnecessary based on internal guidelines. Extended rehabilitation, specialized treatments, and physical therapy are frequently questioned.
• Out-of-Network Providers: Unless the plan specifies coverage exceptions, claims for services provided by out-of-network practitioners are frequently denied right away.
• Benefit Limitations: Despite medical necessity, many policies restrict coverage by imposing session limits, duration caps, or exclusions on particular treatments.
• Late Filing: Insurance companies have stringent deadlines for submitting claims. Filings that are even a few days late are frequently rejected without being reviewed.

Understanding the reasons for denials and the responsibilities of insurers enhances appeals and minimizes unnecessary payment disputes. Healthcare providers who use state protections and methodical analysis of rejections are more likely to overturn denials.

What are Non-ERISA Policies and Their Implications?

When figuring out how to win an appeal with Blue Cross Blue Shield, it’s important to first determine whether the health plan falls under ERISA (the Employee Retirement Income Security Act) or is a non-ERISA plan. Healthcare providers are better able to handle appeals when they are aware of these differences. State laws govern non-ERISA plans, which provide different legal avenues and protections than ERISA policies, which adhere to federal regulations.

What Affects ERISA and Non-ERISA Policies?

The methods by which patients and providers can contest denials vary greatly between ERISA and non-ERISA plans. ERISA plans require that the insurer exhaust all internal appeals before requesting an external review. Non-ERISA policies permit appeals without going through internal procedures, often through state regulatory bodies or direct litigation.

• ERISA Policies: The majority of employer-sponsored health plans are governed by the Employee Retirement Income Security Act (ERISA). Since these plans adhere to federal regulations, policyholders' options for contesting claim denials outside of the insurer's internal appeals process are limited. 
• Non-ERISA Policies: Non-ERISA policies include fully insured employer plans subject to state law, government-funded coverage (Medicare, Medicaid), and individual health insurance plans. These policies offer more appeal options and state-level legal protections.  

Protections and Legal Rights Under Non-ERISA Plans

Healthcare providers should be aware of the legal protections afforded by state law when handling non-ERISA appeals.

• Stronger Consumer Protections: Non-ERISA insurers are subject to more stringent laws in many states, such as required external review rights and expedited resolution procedures.
• Higher Transparency Requirements: State laws frequently mandate that insurers provide thorough justifications for denials, which facilitates the contestation of denied claims.
• Broader Legal Remedies: Non-ERISA plans have additional financial repercussions for insurers who wrongfully refuse coverage, allowing policyholders and providers to pursue damages for bad faith claims.

By acknowledging these distinctions, medical professionals and physical therapists can better utilize state protections, support appeals, and contest wrongful denials.

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Steps to File an Internal Appeal to Win Insurance Appeals

Strong documentation, prompt action, and accuracy are necessary when filing an internal appeal. A methodical approach is essential for doctors and physical therapists to successfully contest claim denials. Understanding each stage ensures adherence to insurer specifications and increases the likelihood of approval.

1. Examine the Letter of Denial

Each denial letter includes specific justifications for rejecting a claim. To choose the best appeal strategy, carefully consider the insurer's justification. Determine whether the rejection is due to policy restrictions, coding errors, or disagreements over medical necessity.

Compare the insurer's justification with the patient's policy information to confirm the legitimacy of the denial. Most insurers have strict deadlines for appeals, usually ranging from 30 to 180 days after the date of denial. Deadlines that are missed result in automatic rejection.

2. Collect Any Supporting Documentation

A well-written appeal must provide a convincing medical argument for the denial. Physician evaluations, treatment plans, and progress reports supporting medical necessity. If coding errors led to the denial, include the corrected CPT, HCPCS, or ICD-10 codes.

Provide evidence-based research supporting the effectiveness of the treatment and adherence to the standard of care. The treating physician must thoroughly explain why the denied service is necessary for the patient's health in order to qualify for the service.

3. Submit the Appeal in accordance with the Insurer’s Guidelines

Each insurer has specific requirements for filing appeals. Many insurers require standardized forms, which can be obtained on their websites or upon request. Make sure the appeal is sent to the insurer's appeals department. To preserve proof of submission, send appeals by certified mail, fax with confirmation, or through secure online portals.

4. Track the Appeal and Follow Up

Track all phone conversations, emails, and insurer responses for reference in case of a dispute. Contact the insurer to inquire about the appeal's status if you do not hear back within the expected timeframe. Insurers may request more information, so be ready to provide quick responses to avoid further rejections.

Taking these actions increases the likelihood that denials will be overturned, ensuring appropriate payment for medically necessary care.

How to Handle an Independent Medical Review?

An Independent Medical Review (IMR) provides patients and healthcare professionals the opportunity to contest insurance denials through an objective third-party assessment. This procedure ensures that medical evidence, not insurer cost-cutting strategies, will guide treatment decisions. PTs and doctors must know which agencies are responsible for the process, when to pursue an IMR, and how to properly submit applications.

1. The Goal and Timing of IMR

When insurers reject claims due to medical necessity, experimental status, or lack of coverage, IMRs offer a fair remedy. Before requesting an IMR, most insurers require that all internal appeals be exhausted. An IMR provides an unbiased assessment in cases where the insurer claims treatment is unnecessary despite supporting clinical evidence. In certain states, IMRs can be submitted directly after denial, avoiding the need for internal appeals.

IMR applications must be submitted in most states four to six months after the final denial, though deadlines may vary. Providers need to keep track of appeal deadlines to avoid missing out.

2. Regulatory Bodies Involved with IMRs

IMRs for non-ERISA plans are subject to state law. The following important regulatory agencies oversee these reviews:

• State Insurance Departments: Enforce insurer adherence to IMR rulings and regulate non-ERISA plans.
• Independent Review Organizations (IROs): IMRs are carried out by contracted third-party organizations, ensuring objective medical assessments.
• State Health Agencies: In some states, IMRs for specific health plans are supervised by organizations such as California’s Department of Managed Health Care (DMHC).

Since IMR rulings often have legally binding authority over coverage decisions, these agencies ensure insurers comply with them.

3. Procedure for IMR Applications and Results

To submit an IMR request, providers must follow certain structured steps:

• Fill out the Application: Complete the necessary forms and submit them through the state regulatory body or IRO, ensuring that the patient and provider information is accurate.
• Include Supporting Documentation: Include peer-reviewed research, medical records, and physician statements to substantiate the claim.
• Pay Required Fees (If Applicable): Some states charge small fees for IMR requests, though there are waivers for financial hardship situations.

Typically, IMR results fall into one of three categories:

• Reversal of Denial: The requested service must be authorized and covered by the insurer.
• The Upholding of Denial: The insurer upholds its ruling, and no further IMR appeal avenues are available.
• Partial Approval: The insurance company may approve part of the requested treatment while denying other portions.

Physicians and physical therapists can better advocate for their patients and obtain the required treatment approvals by understanding the IMR process.

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How to Submit an External Review?

Healthcare providers can request an external review to contest insurance denials if internal appeals are unsuccessful. Independent of the insurance company's influence, external reviews involve independent third-party organizations that evaluate the appropriateness and medical necessity of the denied treatment.

1. Changing from Internal Appeals to External Reviews

Once all internal appeal channels have been exhausted, the external review process becomes an option. Before requesting an external review, providers must complete the internal appeals process, as required by most insurers and state regulations. The following are important transitional steps:

• Exhausting Internal Appeals: Requesting an external review is the next step after receiving a final denial from the insurer's internal review.
• Knowing State Regulations: While some states wait for a final decision on internal appeals, others permit external reviews right after the initial denial.

To support their application for an external review, providers must ensure they have accurate and comprehensive medical documentation. Letters of medical necessity, medical records, and any clinical data supporting the course of treatment should be included.

3. Third-Party Review Procedures Independent of the Insurance Company

Independent third-party organizations carry out external reviews, ensuring objective evaluations of rejected claims. These review procedures provide an unbiased perspective on the denial and are separate from the insurance company’s internal assessment. The following are essential steps in third-party reviews:

• State or regulatory agencies commission Independent Review Organizations (IROs) to evaluate the denial. IROs consist of medical professionals who are experts in the relevant field.
• Review Process: IROs review the provider’s supporting documentation, the insurer’s explanations for the denial, and the medical records.
• Binding Decisions: The insurer is usually required to comply with the decision made by an external review unless they can present strong evidence to the contrary.

3. Detailed External Review Process

The external review process follows a precise, regulated protocol that ensures impartiality and transparency. Important steps include:

• Submit External Review Request: A formal request must be sent by providers to the relevant external review body, usually an IRO or state agency. This includes the filled-out application and all required records, such as treatment justifications and clinical notes.
• Independent Medical Assessment: The IRO designates a trained medical expert to assess the case. This specialist examines the treatment's medical necessity, relevant clinical guidelines, and the insurer’s justifications for denial.
• Timely Review Completion: Depending on the urgency of the case, state laws often mandate that external reviews be completed within a specified timeframe (typically 30 to 45 days). Life-threatening circumstances could expedite the process.
• Decision: The IRO issues a comprehensive decision that either upholds or reverses the insurer’s denial. If the provider wins the case, the insurer is required to pay for the treatment, typically retroactively.

Healthcare providers can successfully contest denials and increase their chances of obtaining coverage for essential patient care by understanding the procedures involved in submitting an external review.

Measures to Avoid Claim Denials

Physicians and physical therapists can increase the chances of successful claims and avoid the time-consuming and resource-draining appeals process by being aware of common reasons for denials and implementing effective measures.

1. Verify Insurance Coverage and Meet Preauthorization Requirements

Verify coverage details before undergoing certain procedures or services, particularly expensive ones, to prevent unanticipated denials. Check these details:

• Policy Benefits: Examine the covered services and exclusions in the patient’s health plan.
• Preauthorization and Referrals: Some treatments require preauthorization and referrals. Before starting treatment, ensure all required referrals and approvals have been obtained.
• Eligibility Verification: Regularly verify that the patient’s insurance is active and that premiums are paid on time.

2. Submit Claims on Time

Claim submissions that are delayed may be automatically denied. Ensure claims are filed on time, usually within the 90–180-day window set by the insurer. Be aware of each insurer's submission deadlines and ensure that all claims are submitted prior to the deadline. Track any potential delays or issues by monitoring claims after submission. Investigate unpaid claims promptly to resolve any issues.

3. Use Proper Coding and Billing Procedures

Claim rejections often occur due to billing and coding errors. Stay up to date on coding changes by regularly reviewing ICD, CPT, and HCPCS code updates to ensure proper coding procedures.

• Link Diagnoses and Procedures: Ensure each service or treatment is linked to the correct diagnosis. Use the most precise codes available to avoid claim issues.
• Check Claims Before Submission: Before submitting claims to the insurer, ensure they are free of mistakes, omissions, or incorrectly applied codes.

4. Appeal Rejected Claims Accurately and Promptly

Certain claims may still be rejected despite the best efforts. Quick action and well-prepared appeals are essential for minimizing the impact of denials.

• Comprehend Denial Reasons: Examine the insurer’s denial in detail to determine the precise grounds for it.
• Prepare Strong Appeals: Use the denial letter as a guide to craft focused appeals that address the insurer’s concerns with documentation and supporting evidence.

Record all appeals filed, along with any follow-up actions and responses, in a log. Ensure all deadlines related to the appeal process are met.

By implementing these strategies, healthcare providers can guarantee more efficient claims processing and reduce the number of claim denials. This will save time and money while enhancing patient care.

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Conclusion

Healthcare providers may find it difficult and time-consuming how to win an appeal with Blue Cross Blue Shield and to deal with insurance denials, particularly when non-ERISA policies are involved. However, the likelihood of obtaining approval for required treatments is greatly increased by understanding the appeals procedures, seeking expert advice, and taking preventive action.

Physicians and physical therapists can successfully combat denials and ensure that patient care is not jeopardized by focusing on complete documentation, adhering to insurance policy requirements, and using available legal resources.

Spry provides innovative solutions to streamline these procedures. Their prior authorization software enhances patient care by reducing errors and increasing efficiency. Notably, clinics using Spry report a 30–40% reduction in note-creation time and a claim approval rate of over 98%. Schedule a demo with Spry today.