Medical claim denial recovery
Denial recovery is the correction, documentation, appeal, or dispute of insurance claims a payer has refused to pay. Every denial has a reason code, and every reason code has a path back to payment or a documented dead end. MARR Partners sorts the queue by path and deadline and works it in that order, on contingency.
Denial categories and the recovery path for each
| Denial category | Typical cause | Recovery path | Typical turnaround |
|---|---|---|---|
| Prior authorization | No authorization on file, authorization for a different CPT or date, or units exceeded. | Retro-authorization request where the payer allows it, otherwise an appeal with clinical documentation and proof of medical urgency or payer error. | 30–90 days |
| Medical necessity | Payer policy disagrees with the diagnosis-to-procedure pairing, or the documentation submitted did not support the level of service. | First-level appeal with operative or progress notes, applicable LCD/NCD or payer policy citation, and a letter of medical necessity signed by the provider. Peer-to-peer review where offered. | 45–120 days |
| Coding and modifier | Missing or incorrect modifier, bundling edits, invalid CPT/ICD combination, or place-of-service mismatch. | Correct the claim and resubmit as a corrected claim (frequency code 7). Appeal with documentation when the edit was applied in error. | 14–45 days |
| Eligibility and coordination of benefits | Coverage terminated, wrong payer billed, or another plan primary. | Verify coverage for the date of service, rebill the correct payer with the primary EOB attached, and refile within the secondary payer’s timely-filing window. | 14–60 days |
| Timely filing | Claim received after the payer’s filing limit, or the payer has no record of the original submission. | Appeal with proof of timely filing: clearinghouse acceptance reports, payer acknowledgment (277CA), or certified-mail receipts. Claims without proof are closed with a documented reason. | 30–90 days |
| Underpayment | Allowed amount below the contracted rate, wrong fee schedule applied, multiple-procedure reductions taken in error, or an unbilled implant or supply. | Line-by-line comparison to the contract. Reconsideration request citing the contract term, escalated to provider-relations, then to a formal dispute under the contract. | 30–120 days |
Turnarounds are typical ranges across commercial and government payers. The Recovery opportunity report gives claim counts and balances by category for your queue.
Most denials are never appealed, and most appeals win
HHS's Office of Inspector General reviewed Medicare Advantage denials and found that 13% of prior-authorization denials and 18% of payment denials in its sample met Medicare coverage and billing rules (OIG, 2022). KFF's analyses of Medicare Advantage data have repeatedly found that only a small fraction of denied prior-authorization requests are appealed, and that a large majority of those appeals are overturned in the patient's favor (KFF). The denial that sits in a 120-day bucket is, statistically, more likely to be paid on appeal than not.
Deadlines come first
Timely-filing and appeal windows are the only part of a denial that cannot be fixed later. The first pass through any queue pulls every claim within 30 days of a deadline and works it before anything else, regardless of balance.
Deadline-exposed claims are flagged in the Recovery opportunity report and in every monthly report so the practice always knows what is at risk.
Root causes go back to your billing team
Recovering a denied claim once is worth the fee. Preventing the next hundred is worth more. Each monthly report lists the denial causes by payer and procedure so your billing team or billing company can fix authorization workflows, coding edits, and eligibility checks upstream.
We don't replace the billing team. We give them the denial data they were too busy to compile.
Sources
- HHS Office of Inspector General, OEI-09-18-00260 (2022): 13% of sampled Medicare Advantage prior-authorization denials and 18% of payment denials met Medicare coverage and billing rules
- KFF, analyses of Medicare Advantage prior authorization (denial, appeal, and overturn rates)
- CMS, Original Medicare appeals: redetermination, reconsideration, ALJ hearing, Council review, judicial review
- American Medical Association, prior authorization physician survey and resources
- CMS, Interoperability and Prior Authorization Final Rule (CMS-0057-F) fact sheet
Figures attributed to a source are that source's; commonly used benchmarks are labeled as such. Verify deadlines against your own payer contracts.