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Successful Rehab Appeals Depend on Medical Documentation
The Problem:  Your medical claims for rehabilitation are being terminated over the issue of medical improvement or denied for lack of medical necessity.

The Solution:
Medical professionals specializing in rehabilitation often find a paradox in insurance. Treatment is available for X number of visits as long as patient improvement can be demonstrated.

Then, even if substantial progress is made, treatment is likely to be discontinued once the specified number of visits have been reached. If progress is not made, many carriers deny treatment as not medically necessary. It is one area of medicine where “Do no harm” may not be good enough.

“Insurance companies are looking for improvement and if you can’t document improvement, they say, “Why did you treat the patient?” A lot of times you don’t know if the treatment is going to result in improvement or not,” said Jim Morse, Director of Finance for The Rehabilitation Institute in Kansas City, Missouri.

Several years ago, the rehabilitation hospital stepped up their efforts to overturn medical necessity denials. Morse indicates that they have been very successful in overturning denials, often getting several members of the treatment team, including therapists, to write letters explaining not only the short term goals but also the potential long term impact of not pursuing the recommended rehabilitation program.

Medical necessity letters also frequently refer to standarized tests which are conducted at the patient’s admit and discharge. The Rehabilitation Institute also redefined job roles to more clearly designate responsibility for inpatient and outpatient appeals among the staff members.

“We do have problems and we do have to fight sometimes on behalf of a patient. We are right there doing anything we can do to get the bill paid,” Morse said.

Unfortunately, some patient’s prognosis for improvement is not good. For some, stopping further deterioration can be a daunting task for the medical team. Getting the treament approved can be equally challenging.

One Patient’s Lawsuit for Coverage

One such patient recently took on her carrier over the issue of medical improvement. Linda McGraw, a multiple sclerosis sufferer, was getting progressively worse under rehabilitation. In the early 1990's, Ms. McGraw, now deceased, began a course of physical therapy and home health care which would ultimately be denied by her insurance carrier Prudential.

Prudential denied about $47,000 in claims under a general exclusion of unnecessary services or supplies. The company's medical director who reviewed the case stated that the claim denial was correct partly because "physical therapy does not affect the course of MS."

Her medical providers argued that the physical therapy had helped arrest the progression of MS. Ms. McGraw's attorney also successfully argued that improvement was not a criteria under the plan document in question. The plan document defined medical necessity as a service or supply which was:

(a) ordered by a doctor;

(b) recognized as safe and effective, is required for the diagnosis or treatment of the particular sickness or injury and is employed appropriately in a manner and setting consistent with generally accepted U.S. medical standards, and

(c) is neither educational nor experimental or investigational in nature.

"Part of the problem with the denial is that if you looked at the plan document's definition of medical necessity, it did not have the requirement of significant improvement. They just had an internal office memo referring to that. The court said it does not govern," said Glen Mullins, the attorney who represented Ms. McGraw. Mr. Mullins practices law in Oklahoma City, Oklahoma.

However, Mr. Mullins came to court prepared to argue the medical necessity of the treatment. Prior to the trial, Mullins compiled about 25 peer reviewed medical articles regarding the medical necessity of physical therapy for multiple sclerosis patients. He also believes the physician's deposition regarding the necessity of care was instrumental in the case. However, Mr. Mullins said the case was unusual in that he was able to get all the documentation he compiled admitted as evidence in the case. Often, Mr. Mullins said, such lawsuits come down to an administrative law judge reviewing only the records on file at the time the lawsuit is filed.

"It is impossible to prevail in a lawsuit if you don't have the evidence on record before the final decision. Sometimes you know that the doctor ordered X but not the reason for X. You need a detailed narrative," he said.

Not only was the need for treatment well documented in the medical records, one of Ms. McGraw’s physicians took a strong stance on the bias insurers show against rehabilitation.

In his deposition in the case, Sherman Lawton, M.D., Ms. McGraw’s neurosurgeon, analogized the use of physical therapy in the MS setting to treating malignancies with chemotherapy. He observed that many people suffering from certain insurable cancers are routinely given chemotherapy, a treatment which in some instances, makes the patient worse and often has no effect on the progress of the disease at all. No one, he offered, would characterize the chemotherapy as not medically necessary.

In McGraw's suit against Prudential, a number of letters regarding the effectiveness of rehabilitation for MS were submitted. Also notable, Prudential officials conceded that they did not attempt to contact Ms. McGraw's physicians or review medical records to reach the decision. After reviewing the medical literature and Prudential’s claim file, the Oklahoma Supreme Court overturned the lower court ruling in favor of Prudential.

"Our odyssey through this record makes clear Prudential never evaluated Ms. McGraw's individual case but rubber stamped the "nature of her condition and denied each subsequent claim arising from her MS," the court finding states.

Rehab Often has Long Term Benefit; so do Appeals

Although many internal medical necessity appeals are unsuccessful, Mullins encourages medical providers to consider the potential long term benefits to filing an appeal with a detailed letter of medical necessity. Even if the appeal is unsuccessful, submitting an appeal will ensure that, if the case goes to trial, the court will have this additional piece of medical information to consider. Mullins also recommends attaching a curriculum vitae or resume to letters of medical necessity to establish the provider's authority on the subject.

Any information reviewed by the insurance carrier during the appeals process typically becomes part of the claim records and will likely be reviewed by the court if a lawsuit ensues.

Cases such as McGraw v Prudential provide a number of medical citations from medical literature which might be helpful in appealing denials of a similar nature. The full text of this case is available at www.kscourt.org/ca10/cases /1998/03/97-6064.htm and the appendix includes specific medical citations used to argue the effectiveness of treatment.

Additionally, Morse states that medical facilities should not be daunted when the carrier quotes the limitations of the policy.

“Case managers at insurance companies have a lot of flexibility. There job is to preserve the insurance companies money but also to get the patient through the system in a way that benefits the patient,” he said.

As a result, case managers are willing to consider more treatment upfront if there is a good chance it will save the patient from more invasive, and more costly, procedures down the road.

Morse says the efforts in this area at his facility have paid off. They now question just how much money was needlessly written off before they began aggressively pursuing appeals.

“We appeal just about everything. If we get a denial, we fight it one way or another,” he said.

Other Letters & Case Studies
The Problem:
Your claims are being denied due to lack of timely filing, preexisting conditions, lack of medical necessity, treatment exclusions/limitations, subrogation/coordination of benefits issues, and any one of hundreds of other reasons.

The Solution: 
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Other Solutions:  AppealLettersOnline.com is constantly adding new appeal letters to the appeal letter repository based on subscriber submissions. AppealLettersOnline.com is meant to be not only a resource for appeal letters but a site where medical billers can submit effective letters they have drafted and discuss appeal issues in the user forum area. The only way to win the war for fair insurance reimbursement is to work cooperatively and exchange information regarding reimbursement. Such efforts ensure that no successful appeal stance dies but can be utilized for the entire industry.

The sample appeal letters are designed to assist medical providers with appealing wrongfully denied insurance claims. Appeal Solutions is not extending legal advice regarding any subject matter. If you are unsure about your legal rights in any dispute, you should consult an attorney.
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