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How to Avoid the Most Common Claim Denials

May 15, 2014

Claims deniedOne of the most frustrating situations for physician and patient alike is a health insurance claim delay or denial after a treatment or diagnosis appointment. When this occurs, both the medical provider and the patient suffer.

Understanding the most common reasons for claims denials, gives physicians vital data to help avoid reimbursement delays and denials. Consider these common triggers for claim denials.

Common Reasons for Claim Denials

  • Patient identifier information errors. Even a simple name misspelling is sufficient to generate a denial. Other patient information suffering a typo, such as date of birth, subscriber or group number errors, also commonly generate delays or denials. Double check the accuracy of spelling and numeric data before submission to avoid this common pitfall.
  • Terminated coverage. Many practitioners fail to verify in-force insurance before treatment. This condition is more common than it should be, but will always generate a claim denial. To avoid this problem, the provider or practice staff should verify coverage, particularly if there are signs that coverage may no longer be active.
  • Missing authorization or precertification data. Many claims related to non-emergency services require prior authorization, particularly for some radiology procedures (such as U/Ss, CTs and MRIs). Submitting claims for these services, but lacking evidence of precertification, is an exercise in futility, as payers will deny them. Before you order that expensive MRI, be sure to get authorization from the payer for the procedure.
  • Excluded services. Most health insurance coverage includes some services that are excluded from coverage. While providers and their staffs cannot be expected to memorize every nuance or exclusion in each health insurance policy from multiple different carriers, they should be aware of the most common exclusions in many major insurance companies coverage. Whenever a question about excluded coverage arises, practice staff should verify the covered and non-covered services.
  • Not sending medical records, when required. Some healthcare plans require sending medical record documentation, e.g., patient medical history, to verify the propriety of some claims. Neglecting to send the requested medical records will, at a minimum, delay payment—and, often, results in a denial. These requests sometimes come after the original claims submission. Requests for certain medical records should be filled immediately to allow the payer to evaluate and adjudicate the claim quickly.
  • Erroneous coordination of benefits information. This claim denial reason is more common than it should be. Common misinformation includes neglecting to advise the payer of other coverage which is primary and missing EOBs, particularly regarding co-payments made. Billing staff must be sure additional insurance, particularly if primary coverage, does not exist or, when it does, to advise the payer of this fact. Including all pertinent insurance information and the appropriate EOB will avoid claim denials for this reason.
  • CPT or HCPCS Coding Errors. Billing code errors remain common reasons for denials. Practice billing staff should develop the habit of reviewing and/or verifying proper coding before claim submission. The extra minute or two it takes to verify use of correct codes is much less than claim delays that can stretch to weeks or appealing a claim denial.

Third-Party Billing Firms

In most cases, a practice will avoid these common causes for claim denials by using a top third-party medical billing organization. Well-trained and experienced staffs seldom make these common errors—that is why top firms have such high ratings.

Their accuracy tends to be high-level and consistent. They employ quality control systems to help ensure they submit correct claim documentation. Their staffs are thoroughly trained in all current codes, including those that may have been recently updated or changed.

In all cases, top firms take every precaution to avoid claim denials. Practices that employ professional billing firms often have fewer claim denials while also enjoying excellent cost control of their all-important billing function.


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