- Case Studies
How a Radiology Group Recovered $500,000 from Medical Necessity Denials
Table of Contents
Introduction
Medical necessity denials can create a serious financial burden for healthcare organizations, especially when the same issues continue to appear across claims. For one Radiology medical group in Washington, recurring medical necessity denials were affecting reimbursement and creating challenges within the revenue cycle.
Medientsky Billing worked with the group to strengthen its pre-authorization process, improve clinical documentation, analyze denial patterns, and build a more effective appeals and prevention strategy. The result was a stronger approach to medical necessity management, a 70% recovery rate on appealed denials, and approximately $500,000 in recovered revenue.
The Challenge
The Radiology group was dealing with a high volume of claims affected by medical necessity issues. These denials were not only delaying payments but also creating additional work for the billing team and increasing the risk of revenue leakage.
Instead of treating each denial as an isolated billing issue, the goal was to identify the reasons behind the recurring denials and address them earlier in the revenue cycle.
Recurring Medical Necessity Denials
Approximately 40% of the group’s claims were being denied because of medical necessity issues. The recurring nature of these denials made it clear that simply appealing individual claims would not be enough. The group needed a process that could address medical necessity before services were rendered while also improving the way denied claims were reviewed and appealed.
Documentation and Authorization Gaps
Medical necessity depends heavily on whether the clinical documentation and authorization information clearly support the service being billed. Inconsistent documentation and gaps in the pre-authorization process were contributing to reimbursement challenges.
The group needed a more structured approach that connected authorization, documentation, coding, and denial management instead of handling them as separate processes.
The Solution
Medientsky Billing took a comprehensive approach to the problem. Rather than focusing only on recovering existing denials, the team worked with the Radiology group to improve the processes that were contributing to those denials in the first place.
Strengthening Pre-Authorization
The first step was to create a more systematic pre-authorization process. Before services were rendered, the team focused on verifying medical necessity requirements and reviewing the applicable payer policies. LCD and NCD guidelines were also reviewed where applicable to help ensure that services had the necessary support before claims moved further through the revenue cycle.
Improving Clinical Documentation
Strong documentation gives a claim the clinical support it needs. Medientsky worked with the group’s providers to improve the quality and completeness of clinical information included in the medical record.
Providers were guided on documenting relevant indications, clinical details, and supporting information that could clearly establish why a service was medically necessary.
Implementing a CDI Approach
Clinical Documentation Integrity was another important part of the strategy. The team worked with providers to identify documentation gaps and strengthen the information supporting medical necessity.This helped create a clearer connection between the patient’s clinical condition, the service provided, and the information submitted with the claim.
Analyzing Denial Patterns
The team reviewed the group’s denial activity to identify recurring patterns instead of treating every denied claim separately.
Denial and remark codes, including CO-50, CO-57, CO-151, and N-115, were reviewed as part of the analysis. This gave the team greater visibility into the issues affecting reimbursement and helped guide corrective actions.
Building a Structured Appeals Process
When medical necessity denials occurred, the team developed a more organized approach to appeals.Supporting documentation was gathered and reviewed based on the specific reason for denial. Where applicable, this included medical records, relevant LCD or NCD information, and other supporting evidence.Each appeal was prepared to directly address the payer’s reason for denial rather than relying on a general reconsideration request.
Preventing Future Denials
Recovery was only one part of the strategy. Medientsky also focused on preventing the same issues from continuing.Denials were tracked and analyzed to identify recurring problems. Based on those findings, the team recommended process improvements, staff education, and updates to internal procedures.
This created a continuous feedback loop between denial analysis and prevention.
Supporting the Revenue Cycle Through Audits
The Radiology group also worked with Medientsky on comprehensive audits of medical records and billing processes.
These audits reviewed areas such as coding accuracy, billing practices, and documentation quality. The goal was to identify potential issues before they developed into larger reimbursement problems and to provide the group with actionable opportunities for improvement.
Results
The combined approach produced measurable financial and operational improvements for the Radiology medical group. By addressing medical necessity at multiple stages of the revenue cycle, the group was able to recover previously denied revenue while creating stronger processes for managing future claims.
70% Denial Recovery Rate
Through a structured appeals and denial management process, approximately 70% of the medical necessity denials were successfully recovered or overturned.
This recovery represented a significant improvement in the group’s ability to capture revenue that may otherwise have remained unpaid.
Approximately $500,000 Recovered
The most significant financial outcome was the recovery of approximately $500,000 from overturned medical necessity denials. The recovery provided a meaningful boost to the group’s revenue and helped reduce the financial impact associated with recurring medical necessity issues.
A More Proactive RCM Strategy
The engagement also shifted the group’s approach from simply reacting to denials to actively identifying and addressing the issues behind them.By combining pre-authorization review, documentation improvement, denial analysis, appeals management, and preventive audits, the group gained a more structured way to manage medical necessity throughout the revenue cycle.
Client Perspective
The results were not limited to financial recovery. The Radiology group also gained access to specialized RCM expertise that helped its team approach medical necessity challenges with greater structure and consistency.
Conclusion
Medical necessity denials can quickly become a major source of lost revenue when the underlying issues are not addressed. For this Radiology group, the solution required more than submitting appeals after claims were denied.Medientsky Billing took a broader approach by strengthening pre-authorization, improving documentation, analyzing denial patterns, managing appeals, and introducing preventive audits.The group ultimately recovered approximately $500,000, with about 70% of medical necessity denials successfully recovered or overturned through the appeals process.The case demonstrates the value of treating denial management as an ongoing revenue cycle strategy rather than a final step after a claim has already been denied.
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Highlights
- 40% Reduction in Medical Necessity Denials
- 70% Increased Recovery Rate
- $500,000 Enhanced Revenue
Client Specs
- Location: Washington
- Specialty: Behavioral Health
- EHR: Incredible
- Average collections: 300K per month
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