Top Reasons for Claim Denials in Medical Billing

Claim denials are a significant obstacle to getting paid on time for your medical practice. Reworking claim denials also means duplication of effort for your office staff. The first step to minimizing claim denials is understanding the top causes of claim denials.

Here is a list of the top 13 reasons for claim denials in medical billing. We recommend that you take a printout of this list as a ready reckoner for your office staff that handles medical coding and billing.

1. Claim not filed on time – Even if a claim is accurately filled, it will be denied by the insurer if the claim is submitted past the filing date.
2. Incorrect insurance ID number – Verify the patient’s insurance ID number before the visit to avoid the claim being denied for this reason.
3. Non-covered services – Sometimes, the claim is denied for uncovered procedures such as cosmetic surgery, acupuncture, or chiropractic services.
4. Not a medical necessity – A medical service may not be viewed as medically necessary, so the claim is denied. Often this occurs because the medical billing staff has not accurately documented the medical diagnosis by the provider in the submitted claim.
5. Services incorrectly bundled – Medical procedures coded or billed together because a single provider performed them may result in claim denial. Follow the medical billing guidelines on medical services that can be bundled.
6. Unbundling and upcoding- Services that should be bundled together have been billed separately (unbundling), or the code used is for a higher-paying service than the one performed (upcoding). Either of these will lead to claim denial.
7. The incorrect modifier used – A common error in claims submissions is the use of incorrect modifiers for services rendered on the same day and on different days. Modifier 25 is for E/M service provided on the same day, while modifier 59 is used when the service is rendered on different days.
8. Duplicate claim submitted –The billing staff may submit a duplicate claim before the insurance company has responded, or they submit a new claim rather than resolving it, resulting in claim denial.
9. Patient deductible – A common reason for claim denial is that the patient’s deductible value has not been met.
10. Plan benefits exhausted – For instance, the patient has exhausted the permissible number of physiotherapy sessions in a calendar year.
11. Prior authorization not attached – Medical billing staff at your practice may have overlooked the requirement for preauthorization.
12. Typo errors in patient information – Errors in patient information can lead to claim denials. For instance, a patient’s name is incorrectly spelled, or the date of birth is incorrect.
13. Out-of-network (OON) provider – If the chosen OON provider is the only provider capable of providing this service, ensure that you have prior authorization before the medical service is provided.

The most effective strategy for avoiding claims denials is to ensure that your staff has completed the insurance eligibility verification prior to the patient visiting your medical office. Holly Vogt, Billing and Coding Manager at PracticeForces, shares a few simple tips on how to improve the medical claims approval rate at your practice. Watch Now!

Also, read our other blogs on claim denials – How to Prevent Medical Claim Denials and  Medical Billing Tips to Improve Claims Approval Rate.

If your healthcare practice is experiencing an increase in claim denials, it is recommended that you work with an experienced medical coding and billing company. With an experience of almost two decades of boosting revenues for healthcare providers, team PracticeForces is at your service for assistance with medical coding and billing, credentialing, AR collections, patient billing and communications, and EHR upgrade. Contact us to know more.