5 Denial Codes For Medical Billing and Their Reasons

Getting denied on a medical insurance claim is one of the most frustrating things a medical billing manager can experience. Not only does it waste the physician's, administrator's, and patient's time, but filing an invalid claim can become something of a money-pit as well.  Frequent causes of denied insurance claims include missing information, billing errors, and questions regarding patient coverage.

medical billing Software denials

Hard and Soft

In order to avoid billing denials, it’s important to be aware where the biggest margin of error lies. There are two types of denials: hard and soft. Hard denials are just what their name implies: irreversible, and often result in lost or written-off revenue. Conversely, soft denials are temporary, with the potential to be reversed if the provider corrects the claim or provides additional information.

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According to the American Medical Association’s National Health Insurer Report Card, there are 5 prevalent reasons for denials.

1. Missing information will cause a denial

Leaving even one required field blank can lead to the claim being denied. These type of denials account for 42% of denial write-offs. Examples include:

• Demographic and technical errors—like a missing modifier

• Incorrect plan code

• Missing social security number

2. A duplicate claim or service will cause a claim to be denied

Duplicates are qualified as claims submitted for a single encounter on the same day by the same provider for the same patient for the same service item. Medicare B sees the majority of these claim denials, with over 32%.

3. Denials happen when a service has already been adjudicated

This kind of denial occurs when benefits for a certain service are included in the payment of another service or procedure that has already been adjudicated.

4. A procedure not covered by a payer will cause a claim to be denied

If procedures aren’t covered under a patient’s current benefit plan, they will be denied. These are generally easy to avoid, as going over a patient’s plan or calling their insurer before submitting a claim can head such denials off.

5. Claims can be denied if the limit for filing expired

If the claim isn’t filed within a payer’s required days of service, the claim can be denied. It’s important to factor the time it takes to rework rejections when filing. There are two types of these reviews:

• Automated, where an automated system checks for improper coding

• Complex, when licensed medical professionals determine if the service was covered, reasonable, and necessary

Correcting inpatient medical coding errors account for 81% of claim denials. The good news is that many medical billing denials can be avoided. Through thorough vetting, the collection of proper patient data, and relying on top monitoring software, your practice could easily join the ranks of those that are truly successful at managing claims. InSync Healthcare Solutions offers a number of claim-related services that can help your practice avoid billing denials. If you're looking for more information on medical billing software, medical transcription or revenue cycle management, please feel free to fill out the simple form and a representative will reach out shortly.