Tools for proper payment & appeals

Addressing claims payment issues can be complicated, but ensuring proper processing and payment of health care claims is vital to the financial health of a practice. The AMA offers resources to help physicians secure correct claims payment from health plans and learn insurance refund recoupment laws by state, navigate the overpayment recovery process and appeal incorrect payments. 

Attempting to determine the validity of alleged overpayments can divert significant time from direct patient care, resulting in lost practice revenue. Overpayment demands may be made in very general terms and can be intimidating. However, it is critical for practices to effectively and efficiently address overpayment recovery requests.

To help physicians understand health insurer overpayment recovery requests, the AMA created the Overpayment Recovery Toolkit (PDF).

Designed to help physicians understand the basics of the overpayment recovery request process, this resource, "Recognizing and interpreting overpayment recovery requests" (PDF), details the reasons that practices may receive overpayment recovery requests, the content of those requests and important information on what to look for in these notifications.

This resource, "Addressing and resolving overpayment recovery requests" (PDF), provides guidance to practices on how to investigate and take action when receiving an overpayment recovery request.

Additionally, the AMA offers a medical appeal letter template, "Sample claim overpayment appeal letter" (DOCX), for practices to utilize.

To help physicians save time and money, this resource, "Automating the overpayment recovery process" (PDF), explains how practices can automate the overpayment recovery process through use of standard electronic transactions mandated by the Health Insurance Portability and Accountability Act (HIPAA).

This resource, "Knowing your overpayment recovery rights" (PDF), offers information on the responsibilities of health plans and the rights of physicians provided by many states laws and regulations. It is intended to ensure that physicians understand their rights in the overpayment recovery request process.

Physicians generally collect the majority of their revenue from health insurers. To maximize revenue and maintain financial viability, practices need to ensure that health insurers are properly adjudicating their claims and should be prepared to address/appeal any improper health insurer payment adjustments. To help physicians understand and enact efficient appeals processes, the AMA has created the following informational resource and sample appeal letters "Identifying and appealing health insurance claim payment issues" (PDF).

Health plans are increasingly implementing E/M downcoding programs that inappropriately reduce payment for claims billed. The AMA has created the following educational resource to support physician practices in navigating such payer E/M downcoding programs, sample template downcoding dispute letters and an informational survey to help the AMA track issues with downcoding and support practices.

• Payer evaluation and management (E/M) downcoding programs—what you need to know (PDF)
• E/M downcoding letter (DOC)
• Procedure downcoding letter (DOC)
• Physician Survey: Experience with Private Payer Downcoding

CPT modifier 25 issues

Health plans have instituted a wide range of policies and procedures—ranging from claim edits to record requests to global payment reductions—to address perceived misuse of CPT modifier 25. The AMA’s CPT modifier 25 educational resource provides helpful information and practical examples to support physician practices in the correct use of the modifier. The sample CPT modifier 25 template letter can help practices dispute improper payment denials of E/M services correctly billed with modifier 25.

• Reporting CPT modifier 25 (PDF)
• CPT modifier 25 template letter (DOC)

AMA members can download these sample letters and customize them in their practices.

• Authorization and eligibility - Letter confirming eligibility (DOC, members only)
• Prior authorization not disclosed (DOC, members only)
• Referral absent letter (DOC, members only)

Contractual obligation

• Claims underpayment letter (DOC, members only)
• Letter to health insurer regarding late payment of claims in violation of practice's contract (DOC, members only)
• PPO discount taken when a contract does not exist (DOC, members only)

Medical necessity

• Medical necessity denial letter (DOC, members only)

Payer-applied edits

• Lack of recognition of CPT Modifier 59 letter (DOC, members only)
• Insurers not accepting new CPT code sets appeal letter (DOC, members only)

Prompt payment

• Letter to health insurer regarding late payment (DOC, members only)
• Letter to patient's employer or health plan sponsor regarding late payment (DOC, members only)
• Letter to health insurer regarding late payment of claims in violation of practice's contract (DOC, members only)
• Letter to insurance commissioner regarding late payment of claims in violation of prompt payment laws (DOC, members only)

The AMA Administrative Simplification LinkedIn Group is designed to provide updates and encourage dialogue on administrative issues affecting physician practices, including automation using electronic standards and operating rules, prior authorization standardization and reform, and regulatory developments. Physicians, practice staff and other interested stakeholders are encouraged to join.