Medicare Advantage Denials

Medicare Advantage denials can significantly impact a practice's revenue cycle, resulting in delayed or reduced payments. For example, a practice with a high denial rate may experience an increase in accounts receivable days, leading to cash flow problems. In one case, a practice with $1 million in monthly charges had an average accounts receivable day of 73 days, resulting in $250,000 in outstanding payments. By reducing denials, practices can improve their cash flow and reduce the administrative burden associated with appeals.

To minimize the impact of Medicare Advantage denials, practices should implement a solid prior authorization process. This includes verifying patient eligibility and coverage before submitting claims, as well as ensuring that all required documentation is included. Additionally, practices should track their denial rates and identify trends to improve their revenue cycle management. For instance, if a practice notices a high denial rate for a specific procedure, they can adjust their coding or documentation to reduce the likelihood of denial.

In our experience, one of the most common causes of Medicare Advantage denials is missing or incorrect prior authorization. To avoid this, practices should ensure that they have a clear understanding of the prior authorization requirements for each payer and patient. This includes verifying the patient's eligibility and coverage, as well as obtaining any necessary pre-approvals or authorizations. By doing so, practices can reduce their denial rate and improve their overall revenue cycle management.

The most common reasons for Medicare Advantage denials in 2026 are similar to those in previous years, including missing or incorrect prior authorization, coding errors, and lack of medical necessity. According to the Centers for Medicare and Medicaid Services (CMS), the top denial reasons for Medicare Advantage claims include CO-45 (contractual adjustment) and CO-197 (absent prior authorization). Practices can reduce their denial rate by ensuring that they have a clear understanding of the prior authorization requirements for each payer and patient, as well as verifying the patient's eligibility and coverage before submitting claims.

In addition to prior authorization issues, coding errors are also a common cause of Medicare Advantage denials. Practices should ensure that they are using the most up-to-date and accurate codes, including CPT and HCPCS codes. For example, the CPT code 90832 is used for individual psychotherapy sessions, while the HCPCS code H0015 is used for intensive outpatient programs. By using the correct codes, practices can reduce the likelihood of denial and improve their overall revenue cycle management.

Practices can also reduce their denial rate by ensuring that they have sufficient documentation to support their claims. This includes medical records, test results, and other relevant documentation. For instance, if a practice is submitting a claim for a patient who has undergone a surgical procedure, they should include the operative report and any relevant test results to support the claim. By including this documentation, practices can reduce the likelihood of denial and improve their overall revenue cycle management.

Practices can appeal Medicare Advantage denials in 2026 by following the payer's appeal process, which typically includes submitting a written appeal and supporting documentation. The appeal process typically starts with a phone call to the payer to confirm the denial and understand the reason for the denial. Then, the practice submits a written appeal, including any supporting documentation, such as medical records or test results. The payer then reviews the appeal and makes a determination, which may include requesting additional information or overturning the denial.

In our experience, the key to a successful appeal is to ensure that all relevant documentation is included and that the appeal is submitted in a timely manner. For example, if a practice is appealing a denial for a patient who has undergone a surgical procedure, they should include the operative report, test results, and any relevant medical records. Additionally, practices should ensure that they are following the payer's appeal process and timeline, as failure to do so may result in the appeal being denied.

Practices can also reduce their denial rate by implementing a solid appeals process, which includes tracking and analyzing denials, identifying trends, and making adjustments to their revenue cycle management. For instance, if a practice notices a high denial rate for a specific procedure, they can adjust their coding or documentation to reduce the likelihood of denial. By doing so, practices can improve their overall revenue cycle management and reduce the administrative burden associated with appeals.