denial-management-playbook

# Denial Management Playbook

## Overview

Structured decision logic for processing healthcare claim denials. This skill provides code-to-action mappings, payer-specific rules, and response templates that agents use to classify and respond to denials systematically.

## Denial Classification

### Action Types

| Action | Description | When Used |
|--------|-------------|-----------|
| `correct_resubmit` | Fix error and resubmit claim | Data entry, coding, modifier errors |
| `resubmit_with_proof` | Resubmit with documentation showing original was correct | Payer claims info missing but it wasn't |
| `formal_appeal` | Submit formal appeal with supporting documentation | Medical necessity, coverage disputes |
| `write_off` | Accept denial, no further action | Below threshold, valid denial |
| `escalate` | Route to human for complex decision | High value, ambiguous, repeat denial |

### CARC Code Reference

#### Coding/Modifier Errors (Action: correct_resubmit)

| Code | Description | Root Cause | Correction |
|------|-------------|------------|------------|
| CO-4 | Procedure code inconsistent with modifier | Wrong modifier applied | Review modifier requirements, correct and resubmit |
| CO-5 | Procedure code inconsistent with place of service | POS mismatch | Verify POS code, correct and resubmit |
| CO-11 | Diagnosis inconsistent with procedure | Dx doesn't support CPT | Review medical record, correct Dx or CPT |
| CO-97 | Payment adjusted - already adjudicated | Duplicate submission | Verify if duplicate; if not, resubmit with explanation |

#### Missing Information (Action: resubmit_with_proof OR correct_resubmit)

| Code | Description | Check First | If Missing | If Present |
|------|-------------|-------------|------------|------------|
| CO-16 | Missing required information | Was info on original claim? | Correct and resubmit | Resubmit with proof of original |
| CO-252 | Additional information required | What specific info? | Gather and resubmit | Resubmit with clarification |
| N56 | Procedure requires prior auth number | Was auth obtained? | Get auth, resubmit | Include auth # and resubmit |

#### Medical Necessity (Action: formal_appeal)

| Code | Description | Documentation Required |
|------|-------------|----------------------|
| CO-50 | Non-covered, not medically necessary | Clinical notes, peer literature, LCD/NCD criteria mapping |
| CO-55 | Procedure not payable with reported Dx | Medical necessity argument, supporting Dx rationale |
| CO-167 | Diagnosis not covered | Coverage policy appeal with clinical justification |

#### Authorization (Action: varies)

| Code | Description | Action | Details |
|------|-------------|--------|---------|
| CO-15 | Auth not obtained | Check if auth exists | If exists: resubmit with auth#. If not: may need retrospective auth |
| CO-197 | Precertification not obtained | Check if urgent/emergent | If emergent: appeal with documentation. Otherwise: write-off likely |

#### Eligibility (Action: verify_then_decide)

| Code | Description | Verification Steps |
|------|-------------|-------------------|
| CO-27 | Expenses incurred after coverage terminated | Verify DOS vs. coverage dates, check for retroactive eligibility |
| PR-96 | Non-covered charge | Verify benefit coverage, check if secondary payer applicable |
| CO-109 | Not covered by this payer | Verify correct payer, check COB |

#### Timely Filing (Action: appeal_if_valid OR write_off)

| Code | Description | Appeal If |
|------|-------------|-----------|
| CO-29 | Time limit for filing expired | Can prove timely original submission |
| N290 | Missing/incomplete/invalid hospital admission date | Can document admission date |

## Decision Logic

### Threshold Parameters

```
APPEAL_MINIMUM: $50          # Don't appeal below this
AUTO_WRITEOFF: $25           # Auto write-off below this
ESCALATE_ABOVE: $1000        # Human review above this
REPEAT_DENIAL_THRESHOLD: 3   # Escalate if same denial 3x
```

### Decision Tree

```
INPUT: Denial (CARC, RARC, amount, payer, claim_id, denial_count)

1. IF amount < AUTO_WRITEOFF → RETURN write_off
2. IF denial_count >= REPEAT_DENIAL_THRESHOLD → RETURN escalate
3. IF amount > ESCALATE_ABOVE → RETURN escalate
4. LOOKUP action = denial_codes[CARC].action
5. IF action == "formal_appeal" AND amount < APPEAL_MINIMUM → RETURN write_off
6. RETURN action
```

## Payer-Specific Rules

### Appeal Windows

| Payer | Appeal Window | Resubmit Window | Notes |
|-------|---------------|-----------------|-------|
| Medicare | 120 days | 12 months | Strict deadlines |
| Medicaid | Varies by state | Varies | Check state-specific |
| Aetna | 180 days | 365 days | |
| UnitedHealthcare | 180 days | 365 days | |
| BCBS | 180 days (varies by plan) | 365 days | Plan-specific variations |
| Cigna | 180 days | 365 days | |
| Humana | 180 days | 365 days | |

### Payer Behaviors

```yaml
aetna:
  known_patterns:
    - "Frequently denies E/M upcoding - include detailed documentation"
    - "Prior auth denials often reversed with clinical notes"
  appeal_tips:
    - "Include time-based documentation for E/M levels"
    - "Reference Aetna CPB (Clinical Policy Bulletin) in appeals"

uhc:
  known_patterns:
    - "Medical necessity denials common for advanced imaging"
    - "Strict on timely filing - document submission dates"
  appeal_tips:
    - "Include peer-to-peer request for medical necessity"
    - "Reference UHC Medical Policy in appeals"

medicare:
  known_patterns:
    - "LCD/NCD coverage criteria strictly enforced"
    - "ABN required for non-covered services"
  appeal_tips:
    - "Always cite specific LCD/NCD criteria"
    - "Include ABN if applicable"
```

## Response Templates

### Template: correct_resubmit

```
No cover letter needed. Correct claim and resubmit through standard channel.

Correction checklist:
- [ ] Error identified and corrected
- [ ] Supporting documentation attached if applicable
- [ ] Claim flagged as corrected submission
```

### Template: resubmit_with_proof

```
RE: Corrected Claim Submission
Original Claim #: {claim_id}
Patient: {patient_name}
DOS: {date_of_service}
Denied Amount: {amount}

This claim was denied under CARC {carc_code}: "{carc_description}"

Upon review, the required information was included in our original 
submission dated {original_submit_date}. Please see attached copy 
of the original claim showing {specific_field} was populated with 
{value}.

We request immediate reprocessing of this claim.

Attachments:
- Copy of original claim submission
- {additional_attachments}
```

### Template: medical_necessity_appeal

```
FORMAL APPEAL - MEDICAL NECESSITY

RE: Appeal of Claim Denial
Claim #: {claim_id}
Patient: {patient_name}
DOS: {date_of_service}
Denied Procedure: {cpt_code} - {procedure_description}
Denied Amount: {amount}
CARC: {carc_code}

Dear Appeals Department:

We are formally appealing the denial of the above-referenced claim 
on the basis of medical necessity.

CLINICAL SUMMARY:
{clinical_summary}

MEDICAL NECESSITY ARGUMENT:
The patient presented with {diagnosis} ({icd_code}). Based on 
{clinical_findings}, the {procedure} was medically necessary because:

1. {reason_1}
2. {reason_2}
3. {reason_3}

SUPPORTING CRITERIA:
This service meets your coverage criteria as documented in:
- {policy_reference}
- {lcd_ncd_reference}

SUPPORTING DOCUMENTATION:
- Clinical notes from {date}
- {lab_results_imaging}
- {peer_reviewed_literature}

We respectfully request reconsideration and payment of this claim.

Sincerely,
{provider_name}
{provider_npi}
```

### Template: timely_filing_appeal

```
APPEAL - TIMELY FILING DISPUTE

RE: Claim # {claim_id}
CARC: CO-29 / CO-N29

This claim was denied for timely filing. We are appealing because 
the original claim was submitted within the filing deadline.

Original submission: {original_submit_date}
Filing deadline: {filing_deadline}
Proof of submission: {submission_proof_type}

Attached please find:
- {proof_document} showing submission on {date}

We request immediate reprocessing.
```

## Prevention Mapping

| Denial Code | Prevention Strategy | Implementation |
|-------------|--------------------|-----------------| 
| CO-4 | Modifier validation | Pre-submission edit check |
| CO-16 | Required field validation | Claim scrubbing rules |
| CO-15 | Auth tracking | Eligibility/auth verification at scheduling |
| CO-27 | Eligibility verification | Real-time eligibility check at check-in |
| CO-29 | Submission tracking | Clearinghouse confirmation logging |
| CO-50 | Medical necessity screening | Pre-service medical necessity check |

## Resources

### references/
- **carc-rarc-complete.md** — Full CARC/RARC code list with descriptions
- **payer-contacts.md** — Appeal addresses and contacts by payer
- **state-medicaid-rules.md** — State-specific Medicaid filing rules

### scripts/
- **denial-classifier.py** — Classifies denial and returns action
- **template-filler.py** — Populates templates with claim data

### assets/
- **appeal-letter-templates.docx** — Formatted letter templates