Adjustments and Appeals – What’s the Difference?

When does one file an appeal and when is an adjustment to an insurance claim appropriate?  This can be a confusing situation to a new biller.  When a medical insurance claim is rejected or not paid, usually some action must be taken.  Often it is either that an appeal must be filed or an adjustment to the claim made.
The basic difference between an appeal and an adjustment is:
An adjustment is done when a claim needs to be reprocessed for some given reason.  Appeals are done when there is a disagreement with an insurance company’s decision regarding the processing of the claim.
An adjustment is a request that a processed claim be reprocessed based on new or changed information now being provided.  Basically it is a request for information on the original claim to be corrected with this new information.  An example of the appropriate use of an adjustment would be if a claim was submitted with an incorrect diagnosis or CPT code.  The claim may be denied by the carrier and it is discovered that the claim had incorrect information.  An adjustment would then be filed with the correct information.
Some insurance carriers require the use of a specific form which generally may be found on their website to file an adjustment while others may accept a generic one.   Attach a completed adjustment form to the corrected claim and write “Corrected claim” across the top of the CMS 1500 form.   Circle the item that is being corrected and attach a copy of the EOB.
Appeals are filed when one disagrees with the decision the insurance carrier made in processing the claim.  Often claims are appealed for timely filing or when there is additional information that should be considered.  Appeals are sometimes filed by telephone but often either an appeal form or an appeal letter is required.   As with an adjustment, some insurance carriers require the use of their own appeal form which can usually be found on their website.
An example of when an appeal may be needed is if a claim is initially denied stating the service provided was not medically necessary.   However the provider feels that the service was warranted.  An appeal can be filed with a copy of the medical records and an explanation from the provider as to why the service was medically necessary.
For more information on filing adjustments or  appeals with many example letters, check out our ebook “Denials, Appeals & Adjustments”.  From now through Memorial Day you can get a 20% discount on the book with the coupon code SPRING


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