Avoid These Common Mistakes in NCQA Appeal Documentation

By Nancy Ross Bell, RN

Estimated time to read: 4 minutes

How does your organization match up to the requirement for documenting the substance of an appeal so that members and providers are clear on their next step in the utilization management (UM) process? Does your team rubber-stamp the initial denial language? Or do they follow the required steps to ensure the appeal has been thoroughly documented and investigated?   

As reported by KFF, “Consumers appealed about 1% of denied in-network claims in 2023. Following those appeals, insurers often upheld their initial denials (56%), and consumers rarely took the next step to file an external appeal.” The analysis examined data from the Centers for Medicare and Medicaid Services (CMS) on 425 million claims submitted to 175 insurers selling Marketplace coverage in 2023 (kff.org, January 27, 2025).

This one statistic is a narrow view of the total universe of member appeals as it only reflects Marketplace appeals and not Medicaid, Medicare, and Commercial appeals. However, it causes us to pause and consider how organizations investigate their cases and document appeals so that outcomes can be fully explained for members and providers to decide their next step as appropriate.

In this blog, we focus on appeal documentation, highlighting UM 8 and UM 9 in the context of NCQA Health Plan Accreditation (HPA).  The file review for UM 9 demonstrates how the requirements outlined in UM 8 have been implemented.

While the file review for UM 4 to UM 7 only includes medical necessity denials, as described in UM 1A Explanation, members have the right to appeal any denied services, which can include not just medical necessity but also claims, personal services, or other benefits. As a result, the scope of appeals is much broader. This blog examines medical necessity appeals, as they tend to be more complex than other types, and includes the requirements and expectations set out in UM 9A, which reflect the documented processes specified in UM 8A.

Always refer to the most current NCQA HPA and standalone NCQA UM standards on denials and appeals for complete details and requirements. 

When Medical Necessity is The Issue

When members hear that the care they seek is not medically necessary, emotions such as frustration, confusion, and even anger can result, making the need for thoroughness, accuracy, and clarity in documenting the substance of the appeal even more critical.  The determination of not medically necessary largely falls into one of the following categories:

• The submitted documentation did not support the need for the procedure or service, or the required documentation or test results are missing.
• The requested service or procedure doesn’t align with evidence-based clinical guidelines.
• Alternate treatments that are less expensive or less invasive and could achieve the same outcome should be tried first.
• The requested service, procedure, or pharmaceutical is considered experimental or investigational and, therefore, not a covered benefit.

Key Points

Denial Notifications  (UM 7B & 7E Related Information)

Medical necessity denials are the basis for most appeals, and what occurs during the denial process is reviewed during the appeal process.

If clinical information is insufficient when determining medical necessity, the denial notice must expressly state what is needed. This allows the member or practitioner to provide needed information on appeal, which must be addressed if received or not received in the appeal process.

Since evidence-based guidelines are used to make denial decisions, the member and practitioner can also determine if the appeal is warranted or what needs to be demonstrated to justify the services or procedures requested and can prevent appeals from occurring.

As consultants and surveyors, we frequently see weaknesses in the denial letters during the appeal file review. Therefore, a sound and well-documented denial process is the first line against unnecessary appeals.

For example, if imaging results are needed, specify if plain radiographs and CT scans are required along with MRIs. Other examples are the provision of evidence of failed physical therapy or the use of a lower-cost medication. Even if the claims system was reviewed, looking solely at the organization’s claims system to determine if a drug was used or therapy paid for should not be used to determine definitively if the requirements were or were not met.

There are times when the information is not available on the organization’s systems, such as when members have had other insurance when the service occurred or they self-paid. We frequently see that if the member or provider did not send the documentation, the organization assumes it did not occur without investigating the system to see whether it occurred. Thorough investigation and talking to the member can uncover missing information.

Documentation

Policies and Procedures describe how appeals are registered and responded to according to UM 8A Factors 1-18. As consultants and surveyors, we frequently find that the policies and procedures (documented processes) in UM 8 do not include the specificity of the identified person who qualifies for reviewing each appeal (appeal specialist, nurse, type of physician). We also do not frequently see (Factor 6 Explanation) steps for obtaining the information when not available, when and how it is obtained and documented, and what systems are accessed, among many other details. The policies and procedures should be specific enough for the reader to understand the who, what, how, when, and where these occur.

Please note that within Factor 6, the organization specifies who in the organization decides appeals, including:

• Individuals or groups to overturn appeals
• Individuals or groups to uphold appeals that do not require medical necessity review
• Individual practitioners or groups that include an appropriate practitioner who was not involved in the initial medical necessity denial decision and is not a subordinate to the practitioner who made the initial denial decision

Additionally, the appeal documentation should specify the source of the denial, such as the claims system, the UM department, or a delegate.

Decisions Without Deference

When a case is initially denied and reaches the internal appeal level, documentation of the case is already included in the organization’s UM System.  While this information is reviewed, the appeal decision must be made without deference to the initial denial decision, meaning the case under review starts fresh (UM 8A Factor 4 Explanation). If there is deference to the original decision, it is frequently labeled as “rubber stamping” the original decision.

Appropriate Handling of Appeals Assessed by File Review (UM 9A)

Documentation (UM 8A and UM 9A)

As consultants, we hold our clients to the letter of the NCQA-stated requirements. Staff are sometimes surprised when we ask for documentation of these six bullet points and have to start hunting for the information when it is not previously bookmarked/identified.

• The member’s reason for appealing the previous decision (UM 8A Factors 3 and 4 and UM 9A Factor 1): We frequently do not see the reason for appealing, and staff tell us that it was not included in the appeal request so that they couldn’t address it. Our response: Did you attempt to call the member and ask what the basis of the appeal was so it could be addressed? Did they have the required CT, physical therapy, or predecessor medications listed in the denial decision as to what was needed? Do they have evidence if it was self-pay or under another insurer? Note that reaching out to the member provides a positive impression that you want to know the details to ensure you provide a comprehensive and knowledgeable decision.
• Additional clinical or other information provided with the appeal request (UM 8A Factor 5 and UM 9A Factor 1): About 10 years ago, another accrediting organization conducted research on the reasons for initial denial decisions and found that 85% were denied because the clinical information was not provided by the requesting physician. If not provided after the denial, the member can be their own advocate and obtain the information to provide with the appeal or after appealing.
• Actions taken (regarding the reason for appeal and additional information) (UM 8A Factor 3 and UM 9A Factor 1): Did you review all facets of the denial and compare it to the member’s information in the system, along with the additional information? Policies and procedures specify the documentation necessary, including the member’s reason for appeal, additional information provided, previous denial or appeal history, and follow-up activities related to the denial and before the current appeal was conducted. What is documented reflects whether you want to box-check or seriously want to know the entire picture.
• Previous denial or appeal history (UM 8A Factor 3 and UM 9A Factor 1): All the denials and appeals for that member do not need to be reviewed, only the ones relevant to this appeal. For example, if the member was requesting coverage of epidural injections, and there had been two or three requests in the past that were denied because the member had not tried physical therapy and conservative measures, and the member still had not tried those, that is relevant to this appeal. Those facts should be addressed in the upheld appeal notification.
• Follow-up activities associated with the denial and conducted before the current appeal, if applicable (UM 8A Factor 3 and UM 9A Factor 1): Did the member make several calls to member services complaining about the denial? If there were none, you need to state that there were none to reflect that you meant none were applicable; otherwise, the surveyor cannot confirm or deny that this occurred.
• Investigation of the substance of the appeal and findings (UM 8A Factor 4 and UM 9A Factor 2): Only stating that the appeal is upheld due to the lack of clinical information or that the procedure is experimental is not sufficient. A full explanation of the factors is required.

Response to the Substance of the Appeal (UM 9A Factor 3)

Additionally, organizations are assessed for the appropriateness of their response to the appeal (UM 9 A Factor 3). This is a surveyor's interpretation based on all the documentation and the seriousness and urgency of the appeal. When there is sparse documentation and the elements of the appeal are not addressed, NCQA has instructed surveyors that they can mark this factor as Not Met, as the intent of the NCQA appeal requirements is not met. Rationales for this scoring are under the three bullet points below:

• Is the response commensurate with the seriousness and urgency of the appeal? For example, if the member states that the appeal is emergent, did a clinical person review the appeal and make a clinical judgment about whether it was emergent, especially if the appeal was changed to non-urgent, and did they document the rationale for that determination?
• Did the organization respond to the reasons given by the member when appealing? We frequently see that the member stated that they appealed because they met some specific criteria, and that allegation was never addressed in the investigation nor in the appeal upheld notification, causing it to appear like the original decision was “rubber-stamped.”
• Did the organization address new information the member or practitioner provided as part of the appeal? If new information is provided, the staff needs to document the review of the new information and include its relevance in the internal documentation and notification to members. Otherwise, it appears to the member that the organization is rubber-stamping the first decision and did not evaluate the new information.

Tips

How can you assure that you’re meeting all the stated requirements for a surveyor who is attentive to the required details?

We recommend the following.

Develop a template that can either be coded into the documentation system or in a Word document that can be copied and pasted into the system. Whether staff are new or seasoned, this helps them remember to address all the requirements.

Add system prompts, such as:

What is the stated reason for the appeal? If no reason was given, did you contact the member to determine the reason?

Did the member provide more clinical information? Yes/No. If yes, what information was provided?

Reminder

UM denial and appeal information is within scope for UM Information Integrity (UM 12). Refer to MHR’s Blog on UM Information Integrity for more details and steps to take now. 

Call to Action

• Ask your MHR Consultant about our new Train-the-Trainer program for auditing your UM files. Regular auditing is the key to ongoing readiness and success!
• Schedule MHR’s NCQA Appeal Training on the Products/Training page. Investing in training adds value to your team in understanding the explicit requirements and why they are needed so performance does not lapse. Knowing the “why” promoted “stickiness.”
• Review MHR’s UM tools & templates on the Products/Tools & Templates page. MHR’s extensive file review guides and audit tools help you comply with the NCQA UM standards.

For more information about MHR’s tools, templates, and training, contact your MHR Consultant or email us at [email protected].

MHR’s President & CEO, Susan K. Moore, provided her unique insights to this blog.  Please read more about Susan’s distinguished career at ManagedHealthcareResources.com/Susan_Moore and follow her on LinkedIn for more insights about NCQA.

MHR: Driving healthcare quality one NCQA accreditation at a time