One of the most frustrating denials for behavioral health providers is one based on medical necessity. It comes after your clinical team has already made a decision about care and the client is in treatment. Now, all of a sudden, the payer says that the services weren’t justified. This is different from a coding error that can be corrected. It challenges the clinical judgment behind the care itself.
The good news is that many medical-necessity denials can be overturned when providers respond quickly and strategically. Based on our experience at Integrity Billing, here are the best ways to approach medical-necessity denials.
Start by Reading the Denial Closely
Before starting your response, take the time to understand exactly why the claim was denied. Look at the denial letter or explanation of benefits, as it should state the reason for the denial and the clinical criteria the payer used.
Many payers rely on criteria sets such as the ASAM Criteria for substance use treatment, InterQual, or MCG, while others rely on their own internal medical policies. You can respond in a much more effective way when you know which standard was applied.
Also pay attention to the deadline. Appeal windows change based on the payer and plan type. If you miss one deadline, you could lose the right to appeal altogether. When you receive the denial, record the deadline right away.
Request a Peer-to-Peer Review
In many cases, the fastest way to address a medical-necessity denial is a peer-to-peer review. This conversation happens between the treating clinician and the payer’s physician reviewer. It gives your clinician the opportunity to explain the client’s situation in more depth than what the written records may show.
Peer-to-peer windows are often short, so you’ll want to request one right away. Make sure the clinician who joins the call is familiar with the case and has the relevant documentation in front of them. Having the necessary information on hand ensures the conversation is productive instead of defensive.
Build Your Appeal Around the Payer’s Criteria
Sometimes peer-to-peer reviews are successful, and sometimes they are not. If the conversation doesn’t resolve the denial, you can move onto the next step, which is a written appeal that mirrors the payer’s own criteria. Let’s say that the payer used ASAM Criteria. Your appeal should walk through each relevant dimension and show how the client’s condition supported the level of care provided.
Here are examples of the documentation you should gather to tell a clear clinical story:
- Initial assessments
- Treatment plan
- Progress notes
- Risk factors
- Co-occurring mental health or medical conditions
- History of unsuccessful treatment at lower levels of care
- Letter of medical necessity
While it’s important to collect this information, it should be well-organized and highlight the evidence that matters most. Avoid sending a stack of records without explanation.
Know Your Options for Escalation
If your first internal appeal is unsuccessful, many plans allow a second one. If all internal appeals are denied, you may be able to get an external review, which is where an independent reviewer evaluates the case. The specific process depends on the type of plan, the state you live in, and the payer. If you decide to move forward with an external review, make sure that you track each step and its deadline carefully.
Prevent the Next Denial With Integrity Billing
There’s something to learn from each medical-necessity denial. By tracking denials by payer, level of care, and reason, you can identify patterns, like a particular payer that consistently questions length of stay or documentation that regularly falls short in one area. Clinical notes that clearly connect each client’s symptoms and risks to the payer’s criteria make denials less likely from the start. Strong utilization review practices and clear communication between clinical and billing teams also help.
At Integrity Billing, we help behavioral health providers manage denials, appeals, and the billing and coding details that protect revenue. Not sure where your denials are coming from? Request a free forensic assessment from Integrity Billing. We’ll review your claims, identify the patterns behind your denials, and show you where your process can improve, at no cost and with no obligation. Contact Integrity Billing today at 888-368-7461 to get started.