5 Common Reasons Medical Claims Get Denied
Medical claim denials can create additional administrative work and delay payment for healthcare practices. A denied claim may require review, correction, resubmission, or further communication with the payer.
Understanding why claims are denied can help practices identify recurring problems and improve their billing workflow.
Here are five common reasons medical claims may be denied.
1. Incorrect or Incomplete Information
Claims depend on accurate patient, provider, insurance, and billing information. Errors or missing information can prevent a claim from being processed correctly.
Examples may include incorrect patient information, insurance details, provider information, or other required claim data.
Reviewing claim information before submission can help reduce avoidable billing issues.
2. Coding Errors
Medical claims must use appropriate coding for the services provided. Incorrect or incomplete coding can result in claim rejection or denial.
Coding should accurately reflect the services documented in the patient’s record and follow applicable payer requirements.
CMS data also identifies incorrect coding as an important source of Medicare payment errors in certain areas.
3. Insufficient Documentation
Documentation supports the services reported on a claim. If required documentation is missing or does not adequately support the service billed, a payer may deny or question the claim.
CMS identifies insufficient documentation as a significant source of Medicare Fee-for-Service improper payments.
4. Eligibility or Coverage Issues
A claim may encounter problems when a patient’s insurance coverage or eligibility does not support the service being billed.
Verifying insurance information and eligibility as part of the billing workflow can help practices identify potential issues before or during claim submission.
5. Payer or Claim Submission Issues
Claims must be submitted according to applicable payer and electronic billing requirements. Claims can be rejected when required information is missing, incorrect, or when a claim does not meet applicable submission requirements.
When a claim is rejected or denied, the billing team should review the payer response to determine the appropriate next step.
How Practices Can Respond to Denials
Denial management starts with understanding the reason for non-payment.
A practical workflow can include:
- Review the denial reason.
- Identify the underlying issue.
- Check the claim and supporting documentation.
- Correct the issue when appropriate.
- Resubmit or appeal when appropriate.
- Follow up with the payer.
- Track the claim until the issue is resolved.
Final Thoughts
Claim denials are part of the revenue cycle, but practices can benefit from having a consistent process for identifying and addressing them.
Regular denial review can also help practices identify recurring issues and determine where improvements may be needed in their billing workflow.
Need help with outstanding or denied claims?
MBP Medi provides A/R and denial management support for U.S. healthcare practices.