THE CHALLENGE
In 2025, inpatient (IP) and outpatient healthcare claim denials increased by 12% and 14% respectively and the average amount per claim increased by 18%1, forcing hospitals to address payer denials head-on. Most health systems deploy a multi-prong approach to ensure appropriate reimbursement, including outsourcing at least a portion of their revenue cycle operations. One area hospitals outsource is the formal appeal portion, as this can be a long-life cycle requiring specialized expertise.
Hospital physicians and nurses are well-trained in patient care but most lack the resources to navigate the complex payer rules needed for formal appeals. Staffing shortages and time barriers also impact a hospital’s ability to consistently and effectively manage the strict deadlines imposed with the formal appeal process.
THE SOLUTION
Ensuring appropriate reimbursement during the formal appeal process requires regulatory and clinical knowledge, insurance expertise, coding proficiency, policy interpretation, and persuasive writing. Attention to detail is also critical, as payers can, and usually will, uphold the denial if the party appealing the denial misses a deadline. This results in a permanent forfeiture of the right to challenge the payer’s decision.
This is why hospitals utilize the AppriseMD team to manage their written appeals. AppriseMD will fight the denial, and hospitals only pay when AppriseMD is successful in overturning the denied claim. Recently, a hospital received a denial from a Medicare Advantage (MA) Dual Eligible Special Needs Plan (D-SNP), noting that the patient didn’t meet criteria for IP-level care. The attending physician engaged in the peer-to-peer (P2P) discussion; however, the payer upheld the observation level of care (LOC) determination. The hospital then referred this case to AppriseMD to begin the formal appeal process.
CLINICAL SUMMARY
An elderly female patient presented to a critical access hospital emergency department (ED) via EMS for abdominal pain and multiple falls. After the fall that prompted the ED visit, the patient remained on the floor, unable to get up, for 4-6 hours. The patient’s medical history includes dementia, lung cancer, COPD, anxiety, hypertension (HTN), and multiple bowel obstructions.
The ED workup showed the patient was tachycardic with a heart rate (HR) of 110. She had dry mucous membranes. Her blood work showed leukocytosis with a white blood cell (WBC) count of 31, acute kidney injury with creatinine level of 1.84 (baseline 0.82) and an elevated serum lactic acid at 3.49 which improved to 2.9 after a liter of intravenous fluids (IVF) was administered. Urine analysis was positive for pyuria and nitrites. CT scan of the abdomen and pelvis showed findings suggestive of ischemic vs infectious versus inflammatory colitis. The patient started on IV antibiotic (Abx) with aggressive IV hydration in the ED and was admitted as IP with a documented expectation that two midnights of hospital care would be required.
The patient continued to experience weaknesses and fell, without injury, while admitted. Physical therapy (PT) began upon admission. On hospital days (HD) 2 and 3, the patient’s WBC improved on continued IV Abx, and creatinine improved with IV hydration. On HD4, the patient reported increased abdominal pain compared to previous two days, and increased confusion from her baseline. Skilled nursing facility (SNF) placement was recommended by PT due to chronic issues, weaknesses, and falls. Submission to the payer for authorization was placed.
On HD5, new onset HTN and persistent tachycardia (HR 100-110 bpm) prompted medication adjustments. Medication changes occurred in response, with IV Abx switched to oral. On HD6, the patient began a new diarrhea onset. Stool samples were obtained and tested positive for an infectious pathogen, preventing the patient from being discharged to the intended SNF which was unable to accommodate the isolation precautions. Case management documented multiple attempts to transfer the patient to another SNF, and a facility 50 miles away accepted the patient pending payer authorization. This was finally executed on HD11, and the patient was safely transferred to the SNF.
FORMAL APPEAL OUTCOME
After the D-SNP denied the IP stay following the P2P, the hospital referred the case to AppriseMD to begin the formal appeal process.
AppriseMD appealed the case based on medical necessity of the patient’s presentation, and the fact that the patient met the Two-Midnight rule expectation. AppriseMD emphasized that all IP days should be covered because there were no safe discharge options available to a lower LOC, citing Centers for Medicare & Medicaid Services guidelines as established in 42 CFR Part 424.13(c)(1): “Certification of need for hospitalization when a SNF bed is not available. (1) The physician may certify or recertify need for continued hospitalization if he or she finds that the patient could receive proper treatment in a SNF, but no bed is available in a participating SNF.”2 Ultimately, the patient’s new onset abdominal pain, diarrhea and persistent confusion with tachycardia, highlighted in the appeal by AppriseMD, brought about the overturned denial. The entire IP stay was covered, including the days the patient spent waiting for SNF placement.
ABOUT APPRISEMD
AppriseMD provides denial management and physician advisory solutions to help hospitals and health systems optimize the revenue cycle with data transparency and operational efficiency.
SOURCES
- “Revenue Integrity Redefined Billing Compliance, HIM/Coding, and Revenue Cycle Annual Benchmark Report 2025 Edition.” MDaudit. 2025.
- “Conditions for Medicare Payment, 42 CFR Part 424 Subpart B.” Centers for Medicare & Medicaid Services, Department of Health and Human Services. March 2, 1988.