Lesson · 22 min

Appeals and Accounts Receivable Follow-Up

Write an appeal that succeeds, and manage accounts receivable so claims do not age into worthlessness.

By the end of this lesson you can

Write a structured appeal letter
Describe the levels of appeal available
Run and interpret an A/R aging report
Decide when a balance should be written off

📘 Reading Lesson

Lesson Notes

Read through the key concepts before you try the challenge.

An appeal is an argument with evidence

On the job

You appeal a medical necessity denial at Lakeside Medical Associates.

The first attempt was two sentences asking the payer to reconsider. It was upheld. The service was genuinely appropriate and the documentation supports it — the appeal simply never said so in a form the reviewer could act on.

Your task: Write appeals that make the case rather than merely register disagreement.

A successful appeal states what was denied, why the denial is wrong, what evidence supports that, and what you are asking for. A reviewer working through a stack of appeals should be able to reach the point in the first paragraph.

Section	Contains
Identification	Patient, member ID, claim number, date of service, denied amount
The denial	The reason code and the payer's stated reason, quoted
The argument	Why the denial is incorrect, tied to the documentation
The evidence	The records, guidelines, or policy language attached
The request	The specific action sought — reprocess and pay the claim

Structure of an effective appeal

Most payers offer several levels of appeal, each with its own deadline. A first-level appeal is typically an internal reconsideration. A second level may involve a different reviewer or a peer-to-peer discussion with a physician. Some plans, and Medicare in particular, provide independent external review beyond that. Each level has a window, and missing one usually forecloses the rest.

Bucket	Interpretation	Action
0-30 days	Normal processing	Monitor only
31-60 days	Slower than expected	Check status; confirm the payer received it
61-90 days	Something is wrong	Work actively; a denial may have gone unnoticed
91-120 days	Recovery becoming unlikely	Escalate; check filing and appeal deadlines
120+ days	Often uncollectible	Determine whether to pursue or write off

Reading an A/R aging report

Writing off a balance is a decision with rules, not a way to clear a queue. A contractual adjustment is required by the payer contract. A bad debt write-off follows genuine collection effort. Writing off a collectible balance to tidy the aging report misstates the practice's revenue, and routinely waiving patient responsibility that a plan requires you to collect can violate your payer contracts and, for federal programs, implicate the anti-kickback statute. Write-offs should follow a written policy and be approved, not made ad hoc by whoever is working the queue.

Check your understanding

A first-level appeal on a medical necessity denial is upheld. The documentation genuinely supports the service. What is the appropriate next step?

Challenge

Apply what you've learned in this lesson.

Write a real appeal and read a real aging report.

Write a complete appeal letter using the five-section structure, for a medical necessity denial on a service you invent. Keep it to one page.
Research the appeal levels one major payer offers, and note the deadline for each.
Given total A/R of $412,000 with $94,000 over 90 days, calculate the percentage over 90 days and state whether it falls inside a 15-20% target.
Draft a short write-off policy naming who may approve a write-off, what documentation is required, and which categories are eligible.

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