Denial Management Playbook

Overview

Structured decision logic for processing healthcare claim denials. This skill provides code-to-action mappings, payer-specific rules, and response templates that agents use to classify and respond to denials systematically.

Denial Classification

Action Types

CARC Code Reference

Coding/Modifier Errors (Action: correct_resubmit)

Missing Information (Action: resubmit_with_proof OR correct_resubmit)

Medical Necessity (Action: formal_appeal)

Authorization (Action: varies)

Eligibility (Action: verify_then_decide)

Timely Filing (Action: appeal_if_valid OR write_off)

Decision Logic

Threshold Parameters

APPEAL_MINIMUM: $50          # Don't appeal below this
AUTO_WRITEOFF: $25           # Auto write-off below this
ESCALATE_ABOVE: $1000        # Human review above this
REPEAT_DENIAL_THRESHOLD: 3   # Escalate if same denial 3x

Decision Tree

INPUT: Denial (CARC, RARC, amount, payer, claim_id, denial_count)

1. IF amount < AUTO_WRITEOFF → RETURN write_off
2. IF denial_count >= REPEAT_DENIAL_THRESHOLD → RETURN escalate
3. IF amount > ESCALATE_ABOVE → RETURN escalate
4. LOOKUP action = denial_codes[CARC].action
5. IF action == "formal_appeal" AND amount < APPEAL_MINIMUM → RETURN write_off
6. RETURN action

Payer-Specific Rules

Appeal Windows

Payer Behaviors

aetna:
  known_patterns:
    - "Frequently denies E/M upcoding - include detailed documentation"
    - "Prior auth denials often reversed with clinical notes"
  appeal_tips:
    - "Include time-based documentation for E/M levels"
    - "Reference Aetna CPB (Clinical Policy Bulletin) in appeals"

uhc:
  known_patterns:
    - "Medical necessity denials common for advanced imaging"
    - "Strict on timely filing - document submission dates"
  appeal_tips:
    - "Include peer-to-peer request for medical necessity"
    - "Reference UHC Medical Policy in appeals"

medicare:
  known_patterns:
    - "LCD/NCD coverage criteria strictly enforced"
    - "ABN required for non-covered services"
  appeal_tips:
    - "Always cite specific LCD/NCD criteria"
    - "Include ABN if applicable"

Response Templates

Template: correct_resubmit

No cover letter needed. Correct claim and resubmit through standard channel.

Correction checklist:
- [ ] Error identified and corrected
- [ ] Supporting documentation attached if applicable
- [ ] Claim flagged as corrected submission

Template: resubmit_with_proof

RE: Corrected Claim Submission
Original Claim #: {claim_id}
Patient: {patient_name}
DOS: {date_of_service}
Denied Amount: {amount}

This claim was denied under CARC {carc_code}: "{carc_description}"

Upon review, the required information was included in our original 
submission dated {original_submit_date}. Please see attached copy 
of the original claim showing {specific_field} was populated with 
{value}.

We request immediate reprocessing of this claim.

Attachments:
- Copy of original claim submission
- {additional_attachments}

Template: medical_necessity_appeal

FORMAL APPEAL - MEDICAL NECESSITY

RE: Appeal of Claim Denial
Claim #: {claim_id}
Patient: {patient_name}
DOS: {date_of_service}
Denied Procedure: {cpt_code} - {procedure_description}
Denied Amount: {amount}
CARC: {carc_code}

Dear Appeals Department:

We are formally appealing the denial of the above-referenced claim 
on the basis of medical necessity.

CLINICAL SUMMARY:
{clinical_summary}

MEDICAL NECESSITY ARGUMENT:
The patient presented with {diagnosis} ({icd_code}). Based on 
{clinical_findings}, the {procedure} was medically necessary because:

1. {reason_1}
2. {reason_2}
3. {reason_3}

SUPPORTING CRITERIA:
This service meets your coverage criteria as documented in:
- {policy_reference}
- {lcd_ncd_reference}

SUPPORTING DOCUMENTATION:
- Clinical notes from {date}
- {lab_results_imaging}
- {peer_reviewed_literature}

We respectfully request reconsideration and payment of this claim.

Sincerely,
{provider_name}
{provider_npi}

Template: timely_filing_appeal

APPEAL - TIMELY FILING DISPUTE

RE: Claim # {claim_id}
CARC: CO-29 / CO-N29

This claim was denied for timely filing. We are appealing because 
the original claim was submitted within the filing deadline.

Original submission: {original_submit_date}
Filing deadline: {filing_deadline}
Proof of submission: {submission_proof_type}

Attached please find:
- {proof_document} showing submission on {date}

We request immediate reprocessing.

Prevention Mapping

Resources

references/

• carc-rarc-complete.md — Full CARC/RARC code list with descriptions
• payer-contacts.md — Appeal addresses and contacts by payer
• state-medicaid-rules.md — State-specific Medicaid filing rules

scripts/

• denial-classifier.py — Classifies denial and returns action
• template-filler.py — Populates templates with claim data

assets/

• appeal-letter-templates.docx — Formatted letter templates