How to Handle Claim Denials: Steps to Take

how to handle claim denials

A streamlined coding process saves you money and speeds up the revenue cycle. Claim denials frustrate patients, lengthen the payment process, and drive up expenses. Being aware of common medical billing errors to avoid can save medical practices thousands of dollars each year, improve patient experiences, and reduce the rate of claim denials.

PracticeForces, a team of medical billing consultants, outline a process for handling claims that helps practices automate and integrate best practices to reap the benefits of understanding how to handle claim denials.

Step #1: Double-Check the Accuracy of the Insurance Claim

In many cases, health insurance companies deny claims because the original submission had a coding or data entry error. If this happens, correct the error, notify the patient about the denial, and apologize if your staff or doctors in the practice caused the error.

Step #2: Assess the Reason for Claim Denial

If a submission is error-free, the patient’s insurance company may have denied the claim on its merits. Once you understand the reason for the denial, decide whether the insurance company was correct in their denial based on their level of coverage. If changing the procedure coding or reworking the claim can overcome the problem, file a claim correction form.

Step #3: Distinguish Between Bundled Services and Services You Perform Alone

Some health plans will cover a particular procedure if the patient needs it in combination with other procedures but will not cover the procedure on its own. In other cases, reporting individual procedures together with bundles that include that procedure would also result in denied claims. 

Be aware of these distinctions when obtaining prior authorization for medical procedures. Ensure that your staff structure and properly report patient care to achieve maximum coverage from the coverage provider. 

Step #4: Communicate the Claim Denial to the Patient with Efficiency and Empathy

If the insurance carrier denied the claim for cause, send a bill to the patient with clear payment instructions and a reason for the denial. Understand that the bill might come as an unwelcome surprise to the patient, so be empathetic and transparent with the patient. Listen to the patient’s concerns and help the patient navigate the payment process. 

Step 5: Evaluate the Frequency of Claim Denials 

A medical practice should employ a claims denial management system to periodically review the frequency of claim denials. Identify frequent causes of claim denials and change coding or data verification practices to reduce those denials. Be alert for a dramatic increase in any particular type of denial, as it could indicate that your current practices are no longer up to date.

Handle Claims Denials More Efficiently with PracticeForces

We’ve seen firsthand how claims denials can grind a medical practice’s revenue cycle to a halt. Don’t let this happen to you. PracticeForces is a medical billing and management consulting firm that works hard to help growing practices like yours develop a deeper understanding of how to handle claim denials. Learn how to prevent medical claim denial by calling us at (727) 499-0351.


Parul Garg, CEO and co-founder of PracticeForces, has significantly contributed to the growth of over 1,000 U.S. medical practices through her expertise in medical billing and coding since the company’s inception in 2003. With a background in Computer Science and an MBA in Human Resources, her leadership and AAPC-certified coding skills have been pivotal in managing the company’s operations effectively.

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