A denied claim costs more than the time it takes to fix. It delays payment, adds rework and, if nobody follows up, turns into lost revenue. Most denials come from a short list of causes, and most of those causes can be prevented.
Here are ten of the most common, with what to do about each.
1. Eligibility and coverage problems
The patient’s coverage was inactive, had ended or was with a different payer on the date of service.
Reduce it: check eligibility before every visit, and ask patients at check-in whether their insurance has changed.
2. Missing or incorrect patient information
Misspelled names, wrong dates of birth or incorrect subscriber IDs get claims rejected or denied.
Reduce it: verify demographics against the insurance card at registration, and use claim scrubber edits to catch mismatches before submission.
3. Missing prior authorization
The service needed approval before it was performed, and none was on file or it had expired.
Reduce it: check authorization requirements when the visit is scheduled, and track approved visit counts and end dates.
4. Not covered or not medically necessary
The payer does not consider the service covered for the diagnosis billed.
Reduce it: know each payer’s coverage policies for high-cost or frequently denied services, and make sure the documentation shows why the service was needed.
5. Coding errors
Wrong or outdated codes, or diagnosis codes that do not support the procedure billed.
Reduce it: code from complete documentation, to the highest specificity the note supports, and review code combinations that are often denied.
6. Missing or incorrect modifiers
Without the right modifier, a payer may bundle a separately billable service into another one and pay nothing for it.
Reduce it: train coders on modifier rules and add claim edits for code pairs that need a modifier.
7. Duplicate claims
A claim is sent again while the original is still being processed.
Reduce it: check claim status before resubmitting, and send corrections as replacement claims rather than new ones.
8. Late filing
The claim reached the payer after its timely filing limit. Limits vary by payer, and many commercial limits are much shorter than Medicare’s one year from the date of service.
Reduce it: work clearinghouse rejections every day and watch filing deadlines by payer in your A/R reports.
9. Credentialing gaps
The rendering provider was not enrolled or credentialed with the payer on the date of service.
Reduce it: track enrollment status for every provider and payer, and load effective dates into your billing system before scheduling a new provider’s patients with that payer.
10. Coordination of benefits
The claim went to the wrong payer first, or the payer needs updated information about the patient’s other coverage.
Reduce it: confirm primary and secondary coverage at registration, and ask patients to update their coordination of benefits with the payer when it changes.
Track denials by reason, not only by count
A denial rate tells you that something is wrong, not what. Group denials by reason code and payer every month. A handful of reasons usually account for most of the volume, and fixing their root causes pays off faster than working each denial one at a time.
Fix, appeal or write off, then prevent
Every denial needs a decision:
- Fix and resubmit when the claim had an error you can correct.
- Appeal when the payer is wrong, with documentation that supports the claim.
- Write off only when the denial is valid and cannot be recovered, and record why.
Then share what you learn with the front desk, providers and coders, so the same denial does not happen again.
If denials take up more of your team’s time than they should, Ace’s denial management team can find the root causes and work the backlog.