stack of papers
Photo Credit: “Bills”, © 2008 Erich Ferdinand, Flickr | CC-BY | via Wylio

Summary: “Over the course of the past several weeks, I have been helping my friend investigate the root cause of a health insurance claim denial for her daughter’s orthopedic surgery — which has resulted in more than 50 subsequent claim denials and more than $50,000 in undue medical debt for the family — and prepare the external review appeal that is the last bastion before legal action,” writes Mandi Bishop over at, in “Blondie and the (Medical Coding and Billing Error) Beast, Part 2: Health Insurance Appeal.” “In Part 1 of this odyssey, I explored the initial findings regarding the medical coding and billing errors that contributed to the claims denial. In this, Part 2, I am providing the complete appeal letter, with providers and insurers de-identified. Developing this appeal letter was eye-opening, exposing systemic process weaknesses and lack of empathy — and limited comprehension — about the implications of errors on the very people healthcare exists to serve.”

(Reposted with permission by the author from

The appeal letter, alone, is over 1,500 words long. It is full of clinical jargon, clinical diagnosis protocols, diagnosis codes, procedure codes, and healthcare policy mandate timelines. The complete appeal package contained more than 30 pages of supplemental material that had to be requested and curated from the patient’s electronic and paper medical records, the Explanation of Benefits from the insurers, call logs from provider practice management and registration systems, and notes from the slew of conversations with billing and office managers across each of the entities referenced.

This single letter references 6 healthcare providers and 3 insurers, all of whom are party in some way to the cause of the claim denial. Each one of those providers should have prepared their own appeal to the claim denials resulting from their services. Each one could have coordinated with the surgical practice to align the language to the originating claim and appeal. But only the first provider filed an appeal — and it was filed by their billing department, without providing the requested supporting documentation. The only appeal that was filed was half-assed. No other providers coordinated to correct. All 6 providers in this case allowed the full financial responsibility for a medically necessary covered service to fall onto the family’s shoulders.

Shame on them all. And shame on us, as an industry, for not just allowing this process to happen — but for accepting it as inevitable, breaking family’s backs behind the scenes while meeting “quality” and “value” metrics on paper.

Are you prepared to research and respond like this, if it happened to you?

It happens thousands of times a day

This could easily happen to you, or someone you love. It happens thousands of times each day, to people who have done nothing but receive covered healthcare services from in-network healthcare providers while diligently paying their health insurance premiums.

With all the detail provided in this appeal, this claim — and all subsequent claims resulting from this injury — may not be paid. And even if the claim IS paid, the medical debt incurred may have already been sold (a process hilariously and tragically detailed by John Oliver, here) and this family (and their credit ratings) may be haunted by “zombie debt” for the next decade.

When you read the below (TL;DR — we show how the definition of “medical necessity” that insurer X provides as the reason for claim denial, line-by-line, was met, with supporting documentation from the records), imagine you are facing this fight.

The letter. Yes, it’s long.

To Whom It May Concern,

I am writing this letter on behalf of my dependent daughter, Blondie, who is 17 years old and was diagnosed with a hip labrum tear after a high school sports-related injury which occurred on 1/17/2015. This letter serves as our formal appeal with respect to claim 123456789 , filed by provider X, for CPT code 29916 — hip arthroscopy with labral repair, which was denied by insurer X. on March 17, 2016, as “investigational and not medically necessary”. Please be advised that this surgery was recommended by orthopedic specialists after 12 months of physical therapy were unsuccessful in resolving Blondie’s symptoms. Additionally, X-ray series were conducted after months of conservative treatment. The medical findings from the X-rays indicated that Blondie sustained a labrum tear with pincer impingement and femoroacetabular impingement syndrome also present.

Pursuant to the specific terms of the denial letter, attached to this appeal document as Exhibit “A”, I will reference each requirement for medical necessity separately, with references attached for review.

1. From Exhibit “A”, surgery claim denial: “Your request tells us that you have hip pain. We do not see that you have tried other treatments for at least six months without success.”

a. Patient was covered under insurer Y at the time of the injury on 1/17/2015, and throughout initial 12 months of physical therapy at provider Y.

b. Exhibit “B” contains initial injury report from school insurance form, confirming injury on 1/17/2015, signed by school secretary on 2/19/2015.

c. Exhibit “C” contains final report of MRI of right hip without contrast, performed by provider Z with date of service 2/12/2015. Findings indicated that the superior portion of the acetabular labrum is avulsed.

d. Exhibit “D” contains the clinical encounter record of the initial orthopedic consult with provider A with date of service 2/25/2015 detailing chief complaints and referring the patient to physical therapy. Assessment/Plan section of the clinical encounter record provides the following ICD-9 diagnosis codes (ICD-10 was not required until October 2015):

i. 719.45 — Hip joint pain

ii. 719.25 — Villonodular synovitis involving hip

iii. 840.8 — Labral tear

Wait, it gets better

1. This was erroneously coded in the electronic medical records (EMR) system and constitutes a medical error that could not have been known to the patient. ICD-9 code 840.8 is a shoulder labral tear or other sprain or strain of the fascia. The MRI report and all plan of care documentation supports a hip labrum tear.

2. Exhibit “E” contains correct ICD-9 code for hip labrum tear (843.9), as recorded manually by provider A on date of service 2/25/2015.

e. Exhibit “F” contains encounter documentation from physical therapy provider Y with Plan of Care and Progress Notes for date of service 4/30/2015. This Plan of Care indicates hip injury and related gait instability recovery progress, and is representative of each of the visits patient had from February 2015 through January 2016.

f. Exhibit “G” contains account statement with dates of service of each physical therapy visit by patient to provider Y with dates of services between February 2015 and April 2016, at which point the insurer X claim denial prohibited further physical therapy.

i. Patient pursued conservative physical therapy for at least six months for the hip injury treatment, meeting the stated requirement for medical necessity for the surgery.

2. From Exhibit “A”, surgery claim denial: “Also, this surgery only works when there is abnormal contact between the bones in the hip (femoroacetabular impingement syndrome). Your request does not tell us that X-rays show that you have this problem.”

a. Exhibit “H” includes clinical encounter record of office visit to provider B with date of service 1/12/2016 which references results of X-ray imaging studies on the same date of service of 1/12/2016.

i. Under section, “Physical Exam”: “Positive hip impingement test.”

ii. Under section, “Imaging/Diagnostic Studies”, “Hip/Pelvis Imaging”, results reflect: “3 views of the right hip and pelvis were obtained on 1/12/2016 reveals a small pincer lesion on the right side with a small acetabular cyst on anterior wall. Mild cam deformity of the femoral head and neck.”

iii. Under section, “Plan”: “The patient has a labral tear most likely caused by hip flexion injury that occurred in early 2015 with possible underlying femoroacetabular impingement.”

Daily activities? Nope.

1. “She is unable to do his (sic) daily activities such as bending kneeling squatting, prolonged standing or walking, carrying a load etc. She has essentially exhausted non-operative treatment.”

b. Exhibit “I” includes the surgery coding sheet with date of service 1/22/2016, with place of service at provider C, signed by First Assistant “Ryan” that records, via handwritten note beneath the ICD/CPT crosswalk section, “FAI” under the ICD and “psoas tendon release” under the CPT section.

3. From Exhibit “A”, surgery claim denial: “Medical studies show that this surgery does not work well when there are changes of wear (osteoarthritis) in the hip joint. Your request does not tell us that your hip joint has little or no signs of wear (Tonnis grade 1 or less).”

a. Three radiological diagnostic imaging series, including an MRI and two X-ray series, were obtained in the time period from the injury on 1/17/2015 through the surgery on 1/22/2016, with the final results recorded in the clinical encounter documents contained as references herein. The presence or absence of osteoarthritis was not explicitly noted in any of these diagnostic imaging reports; however, the absence of diagnostic evidence of osteoarthritis was recorded.

i. Exhibit “C”, the original MRI of the injury detailed above with date of service of 2/12/2015, recorded, “Articular cartilage is intact.”

b. Exhibit “E”, the orthopedic office visit encounter document detailed above with date of service of 2/25/2015, did not include ICD-9 code 715.9 for osteoarthritis in the diagnosis codes that were sent to the medical coding department to inform billing.

c. Exhibit “H”, the orthopedic office visit encounter document detailed above with date of service of 1/12/2016, records physical examination results and the results of an X-ray imaging series of 3 hip and pelvis views with a date of service of 1/12/2016.

i. Per Altman et al clinical guidelines for determination of osteoarthritis, established in 1991, patient did not meet the criteria for a determination of osteoarthritis per the results of the physical exam performed, with scores recorded in section “Physical Exam” as follows: “60 flexion, 45 internal rotation, 70 external rotation”.

ii. Absence of clinical signs of osteoarthritis recorded under section, “Physical Exam”: “No flexion contracture. No pain with range of motion exam. No pain with resisted hip flexion…No edema.”

Denial after denial after denial

Clearly, the guidelines for medical necessity to surgically repair the torn hip labrum, pincer and FAI impingements on this pediatric patient, as explicitly defined in the internal appeal denial contained in Exhibit “A”, were met. The patient could not have been aware of any medical coding or reimbursement-related procedural errors committed by the provider(s) in submitting claims detail and any required attachments or supporting documentation to insurer X. Also, the patient was not party to the content of the internal appeal document or execution of the internal appeal process that was initially filed by provider X.

The denial of this surgical claim caused subsequent denials for claims from the outpatient surgical facility, the anesthesiologist, and the physical therapist. The denial of this claim has resulted in an interruption of follow-up medical care for the patient. And, the denial of this claim has interfered with the coordination of benefits that should have occurred between insurer X and insurer Z, the school’s insurer, as the injury occurred on school grounds during a school-sanctioned activity.
As a result, we respectfully request that you reverse your denial and honor all past, present and future medical treatment as it relates to the injury as prescribed throughout this formal appeal. Evidence provided supports that proper conservative care was in fact administered for this patient for nearly a year post injury. Additionally, the proper diagnostic procedures were followed as prescribed by medical physicians. Finally, the diagnosis is consistent with the treatment and ultimate recommendation for surgery.

At no time would the patient nor her family be aware of the communication and to some degree improper coding between the medical providers and the insurance carrier. This communication breakdown appears to have been further exacerbated by the fact that there was a change in insurance providers well after the course of conservative care had been completed. Finally, there is verbal evidence to support that a representative from provider X’s office did in fact make contact with insurer X on January 18, 2016 requesting authorization for this surgery. According to provider X, there was no requirement for prior authorization as it relates to this particular surgical procedure. This information was ultimately shared with the patient’s family through the course of preparing this appeal and not at the time of request.

We have included all supporting documentation for your review. Thank you for your prompt attention to this matter.

Stay tuned for the decision

Imagine this were your family. Who would help you? What, exactly, would you do? Have you ever asked your doctor what their process is to appeal initial claim denials, and then to help patients with subsequent appeals? If you’re a provider, have you ever gone through the claim appeal process, end-to-end, from the patient’s perspective?

This isn’t patient-centric. This isn’t value. This isn’t accountable care. This is, quite literally, passing the buck. It’s tragic, it’s shameful — and it’s standard U.S. healthcare practice.

Stay tuned for Part 3: the decision.

Posted with permission. By Mandi Bishop,
Mandi Bishop, Firebrand. Speaker. Author. Socially disrupting healthcare 140 characters at a time. Chief Evangelist and Co-Founder, Aloha Health. Originally posted on, Translating ‘fortress medicine’ into plain english. A digital town square for ideas and new perspectives. Open-source Thoughtware. Accessible. Important. Exciting. Trying hard to remember the future.

Jeanne Pinder

Jeanne Pinder  is the founder and CEO of ClearHealthCosts. She worked at The New York Times for almost 25 years as a reporter, editor and human resources executive, then volunteered for a buyout and founded...