Rebilling Denied Claims and Appeals in Substance Abuse Billing

For substance abuse rehab services where overhead is very high, think mortgage/lease, payroll, ancillary services, having a couple of insurance claim denials can be the difference between thriving, and thinking about shuttering. I’ve seen it many times at this point in my healthcare career.

As kids playing in the schoolyard, we get ‘do-overs.’ Do you get a ‘do-overs’ as a rehab facility if there is a denied claim? The short answer: yes. The long answer: I wouldn’t necessarily call appealing and billing again a denied claim a ‘do-over,’ but the important thing is that if you suffer a denial, you can still get paid. Welcome to the world of ‘rebilling.’

What is a rejected claim?

What is the difference between a claim and a denial?  According Universal American article, “Rejected claims are defined as claims with invalid or missing data elements. Some examples are illegible claim fields or missing or invalid codes and/or missing or invalid member or provider ID numbers.” This M-Scribe article further explains that these errors “prevent the insurance company from paying the bill as it is composed, and the rejected claim is returned to the biller in order to be corrected.”

Two take away points here:

  1. Rejected claims are returned to the healthcare provider without registration in the the insurance company’s claim processing system.
  2. The rehab facility then has a certain period of time—as defined the insurance company—to correct the claim.

If the rejection occurs because the provider failed to submit the original claim or the corrected claim on time, the facility will have their claim rejected. This is why billing or rebilling promptly and timely is super important, and should be done accurately.

What is a denied claim?

These occur after the insurance company receives your claims, and they’re typically the result of not proving medical necessity or other fatal errors. There are about 9:

1.    Lack of medical necessity

2.    Data-entry mistakes

3.    Wrong insurance information

4.    Missing claim information (e.g., ICD-10 codes, G-codes, and modifiers)

5.    Missing or invalid referral/authorization

6.    Credentialing or provider issues (licensing).

7.    Submission outside of timely filing window

8.    Wrong subscriber information

9.    Failure to submit insurance requested information


What does a billing or rebilling service do when you have a denied claim?

You will know your facility’s claim was denied, because you will receive notification on the Explanation of Benefits letter (EOB). When you receive a denial you, your billing company, or the rebilling company should:

  1. Identify the error code, or reason for denial.
  2. Contact the insurance company to clarify the reason for the denial.
  3. Follow the insurance company’s instructions for correcting and rebilling the claim, including finding medical necessity in existing charts.
  4. Make sure they document this conversation—along with any and all interactions they have with the insurance company.
  5. Appeal



Appeals come into play when you as the facility don’t agree with the insurance companies final determination. For example: you or your billing company correct a claim and rebill, and you still receive a denial. In these situations—the denied claim should be appealed within seven (7) days of the insurance company’s final determination, as you’ll have a 67% chance of getting paid. Conversely, if you wait any longer, the denied claims have a 60% chance of not getting paid.

Lastly, when an appeal is made for your claim, a rebilling company will make sure they provide the insurance company with a clear narrative, all related patient documentation and charting, and documentation of all interactions you had with the insurance company in relation to the denial.


What happens if your facility keeps getting denials?

A good billing or rebilling company can help you get a system to address every denial as soon as you get it. For instance, they can help get a system to help you:

  1. Know the reason for denial and/or code.
  2. Logging this information.

Why have a log? Because these reasons can help a company get to the root cause of systemic issues. For example, if a denial is due to lack of coverage or failure to obtain authorization, you know you’ve got a front office issue. If medical necessity isn’t demonstrated or the insurance carrier requirements aren’t met, you can understand that the issue with the rehab. If the wrong codes were billed or there are modifiers missing, you know it’s a billing-related problem.

Once the source of the denials is figured out, the rebilling company can help you address the issues, and get you paid. For instance, the company help you create better policies and procedures to eliminate future errors, they can make sure your staff is trained thoroughly. They can help you ensure through trainings that everyone understands insurance company requirements, and the rehab’s policies and procedures. They can also help a rehab create a culture of accountability. After all, what’s the point of having standard polices and procedures if no one has to be held to them?


Khatri Med Law PC can handle your rebilling and insurance claim needs. KML is lead by a seasoned healthcare attorney, doctor, and treatment center owner, and has recovered hundreds of thousands of dollars for many companies. Please call us for further consultation or information, anytime.; (310) 896-5183;