Healthcare Appeal Software for Telehealth Claim Denials

The Telehealth Denial Crisis

The pandemic permanently changed how healthcare is delivered. Telehealth visits that once represented a small fraction of patient encounters now account for 15-20% of all outpatient visits at many health systems. But here's the problem: payer policies haven't kept pace.

The result? An 84% increase in telehealth-related claim denials in 2025 alone. RCM teams are drowning in appeals, and the manual processes that worked for traditional claims simply can't handle the volume or complexity of telehealth denials.

Why Telehealth Claims Get Denied

Understanding why telehealth claims fail is the first step toward preventing and appealing them effectively. The most common denial reasons fall into a few predictable categories:

1. Place of Service Code Errors

This is the number one culprit. Payers have specific requirements for POS codes (02 for telehealth, 10 for telehealth in patient's home, etc.), and these requirements vary by payer, plan type, and even by procedure. A single wrong digit triggers an automatic denial.

2. Originating Site Requirements

Some payers still require patients to be at an "eligible originating site" for certain services. Others have dropped this requirement entirely. Keeping track of which payer allows what is a full-time job—one that AI does better than humans.

3. Provider Eligibility Issues

Not all providers can bill for telehealth services with all payers. Licensed clinical social workers, for example, might be eligible to provide telehealth services under Medicare but not under a specific commercial plan. These eligibility rules change frequently.

4. Medical Necessity Documentation

Even when telehealth is technically billable, payers may deny claims for insufficient documentation of medical necessity. Why was telehealth appropriate instead of an in-person visit? The clinical notes need to answer this question clearly.

5. Modifier Mishaps

Modifier 95, modifier GT, modifier G0—telehealth modifiers vary by payer and have changed multiple times since 2020. Using the wrong modifier (or forgetting one entirely) is an easy mistake that results in immediate denial.

How AI-Powered Appeal Software Changes the Game

Traditional appeal processes rely on staff members researching payer policies, drafting letters, gathering documentation, and submitting appeals—often spending 45 minutes or more per case. AI-powered solutions compress this to under 2 minutes while improving accuracy.

Here's what happens when you click "Generate Appeal" on a telehealth denial:

1. Instant denial analysis: The AI reads the denial reason code and remittance advice, identifying the specific issue (POS code, modifier, medical necessity, etc.)
2. Policy lookup: It automatically pulls the relevant payer policy for that specific procedure, plan type, and date of service
3. Evidence gathering: Clinical notes, prior authorizations, and supporting documentation are identified and attached
4. Letter generation: A payer-specific appeal letter is drafted using language patterns that have historically succeeded with that payer
5. Compliance check: The appeal is verified against current regulations and payer requirements before submission

What to Look for in Healthcare Appeal Software

Not all appeal automation tools are created equal. When evaluating solutions for telehealth denial management, prioritize these capabilities:

Telehealth-Specific Intelligence

Generic appeal tools often lack the specialized knowledge needed for telehealth claims. Look for solutions that maintain updated databases of telehealth policies across payers—including the frequent changes that occurred throughout 2024 and 2025.

Payer-Specific Language Patterns

Different payers respond to different appeal strategies. United Healthcare appeals that emphasize medical necessity succeed at different rates than those emphasizing regulatory compliance. AI systems that learn from appeal outcomes can optimize language for each payer.

Integration with Your Workflow

The best appeal software connects directly to your practice management system or EHR. Denied claims should flow automatically into the appeal queue, and completed appeals should update claim status without manual data entry.

Analytics and Reporting

Understanding your denial patterns helps prevent future issues. Look for dashboards that show denial rates by payer, reason code, provider, and service type—with the ability to drill down into telehealth-specific metrics.

Real-World Results

Organizations implementing AI-powered appeal software for telehealth claims report significant improvements:

The ROI calculation is straightforward: if your average telehealth claim is worth $150 and you're currently writing off 1,000 denied claims per month, recovering even 40% of those claims generates $60,000 in monthly revenue. Most AI appeal solutions cost a fraction of that.

Getting Started with AI-Powered Appeals

Ready to tackle your telehealth denial backlog? Here's a practical roadmap:

1. Audit your current state: How many telehealth denials are you receiving monthly? What's your current appeal rate and success rate? What's the average cost to process an appeal manually?
2. Identify your biggest pain points: Are most denials coming from specific payers? Specific denial reasons? Specific services? This helps prioritize where automation will have the biggest impact.
3. Evaluate solutions: Request demos from 2-3 vendors. Test their telehealth-specific capabilities. Ask for references from similar organizations.
4. Start with a pilot: Implement with a single payer or service line first. Measure results against your baseline. Expand once you've validated the ROI.

The Bottom Line

Telehealth is here to stay, and so are the complex payer policies that govern it. Manual appeal processes that worked for traditional claims simply can't keep up with the volume and complexity of telehealth denials.

AI-powered healthcare appeal software isn't just about efficiency—it's about making sure you actually appeal the claims that deserve to be appealed, with arguments that are most likely to succeed. In a world where providers spent $25.7 billion contesting denials last year, working smarter isn't optional. It's survival.