Top 10 Denial Codes in Medical Billing
Medical Billing is a complex process in any healthcare setting, playing a crucial role as the bridge between the insurance companies and healthcare centers. One of the most difficult tasks is to deal with claim denials. In simple words, denial code is any particular assigned alphanumeric or numeric identifier by the insurance companies. This denial code highlights the reasons for being rejected due to multiple denial rejection reasons. Any denial in the medical billing process can range from a simple error in the verification to the complex problems like inaccurate coding. However, these denials can enhance the percentage of financial loss on healthcare providers. In order to avoid more complexity due to denials, it is better to understand these denial codes and how to avoid them. In this comprehensive blog, we’re going to discuss top 10 denial codes in detail.
Denial Code 16
When the insurance company is provided with the incorrect service date, it is set to be an error in the patient’s information which can be incorrect or incomplete as well. It is very important to pay attention as this is the initial process of medical billing. There are some best practices which can be adopted to avoid this issue.
The medical billing company needs to verify the information of the patient which contains the patient’s date of birth, name, insurance date, address and contact details as well. Having accurate information of the CPT code is important in order to avoid this issue. From authorization forms to the physicians prescriptions, make sure that all documents are complete and the data is entered accurately with precise coding respectively.
Denial Code 18
Another important denial code which shows that the claim has already been submitted and further processed by the insurance company as well. Moreover, we can explain it in a way of submission of the same service multiple times by the healthcare providers. Submitting claims multiple times can be the waste of time and resources leading to unnecessary rejections. With the issues, the medical billing application rejected with the Denial Code 18.
In order to avoid this claim, the billing companies must maintain the record of the already submitted claims from submission date to the name of the service. It is crucial to check the status of the claim on the regular basis to avoid this claim. Never opt for the resubmitting claim process without verifying the reason for the delayed response from the insurance company. The effective medical billing services always integrate advanced software for alerts if a claim is entered multiple times allowing for the verification before final submission.
Denial Code 22
When the payers come to know with the situation called as Coordination of Benefits (COB), it resulted in the Denial code 22. It means that the patient has another insurance plan for the medical billing. The main objective of COB is to make sure that the fair amount is shared by multiple insurance companies.
In order to avoid this denial, it is important to verify that whether the patient has one or more insurance plans. This can be done with the insurance verification software. By following the rules of COB, this rejection can be avoided. If multiple insurance companies are involved, then the order of claims should be submitted ensuring which payer is responsible for covering respective payments.
Denial Code 45
If the charge or payment asked in the claim for the medical expenses exceeds the allowable limit, then the insurance company rejected the claim with the Denial Code 45. This fee contract is signed between the healthcare center and the payer. When the healthcare provider asks for more than contracted payment, the payer denies paying.
In order to avoid this, the healthcare providers should familiarize themselves with the set rules of insurance companies regarding allowable expenses. Furthermore, reviewing the agreement before submitting the claim is important and mandatory to avoid the denial outcomes.
Denial Code 109
Healthcare providers face this type of denial (code 109) due if the submitted claim does not cover the service by the insurance company. The mentioned service might not be included in insurance plan of the patient. The payers will never pay for the service they don’t cover or if it is not part of the insurance benefits assigned to the patient.
This issue can be avoided by considering number of steps. Firstly, before submitting the claims always review and verify the insurance coverage plan of the patient. Secondly, keep an active eye on the insurance policies particularly for exclusions that will not be covered by the insurance companies. In this regard medical billing experts plan an important role by communicating with the healthcare providers and patients to understand their coverage plan in detail.
Denial Code 204
Denial code CO 204 take place when a payer chooses that the services, measures, or things you included in claim should be combined into one payment instead of being funded independently. This process is called as “bundling.” Bundling means that certain medical amenities or measures, which are connected to each other, are congregated under a distinct code and paid together. For instance, if a process comprises multiple stages, the insurance company may bundle these phases into one complete payment, instead of reimbursing for each step individually. If it doesn’t happen then the claim will be rejected with the Denial Code 204.
The denials for the code 204 can be prevented by understanding the bundling rules issued by the insurance companies to the healthcare providers. The healthcare centers need to understand that which services are typically combined together under a single code rather than billing them separately. Furthermore, it is important to implement the CPT coding precisely and double check the submission process to ensure that all services are bundled properly under one code. It is crucial to study the Explanation of Benefits (EOB) properly to know about the reasons for denials and how the claims can be resubmitted again.
Denial Code 29
This denial occurs if the claim is submitted after the time limit. A specific date has been set by the payer company regarding claim submission. If any healthcare center submits the claims after the deadline, then the insurance company rejects the claim under Code 29. Medical Billing Specialists are experienced and know about the “timely filing limit”. The healthcare providers can hire the reputable medical billing company to avoid the risks of the denials. The filing time of every insurance company can vary as per their policies.
There are many ways to follow to avoid this issue like knowing the time limit or deadlines. In this regard, you can also take help from the medical billing professionals. Every healthcare provider must integrate their systems with the latest technologies and advanced software which can track the information immediately and give the reminder of the deadline.
Denial Code 197
The denial code 197 indicates the absence of the pre-certification and authorization. This is also called as the pre-approval. Any healthcare company is obliged to take the approval from the payer company before submitting for the submission. If it doesn’t happen, then the company rejects the claim with the denial code 197. Preauthorization can be defined as the process when the healthcare provides get the approval by submitting the basic information and requirements about the services of medical billing that they want to avail. This is to ensure that the payment is required for the patient’s treatment and it will be covered by the insurance company. If you proceed with the process without the prior authorization, the payer may reject the claim using the code 197 and you won’t get paid then.
To avoid this issue, you must know that which procedure needs pre-verification and approvals from different insurance companies (if multiple insurance companies are going to involve as per the claim requirements). You have to submit the necessary information as it is also mentioned in the contract. Getting the approval in advance streamlines the billing process and the healthcare providers or medical billing experts get the authorization number which streamlines the whole billing process.
Denial Code 253
Eligibility criteria are an important factor to consider in the medical billing process. Insurance companies have their own policies from patient’s eligibility to filing deadlines which need to be followed. When the insurance company determines that patient is not eligible for the payment, the claim gets rejected with Denial Code 253. There are many reasons for this denial, the person may not fall under the criteria of the billing process or the service is not part of the insurance coverage plan.
This issue can be avoided by following number of consideration. The billing experts always check for the eligibility criteria of the patient by verifying the insurance plan and all related details. Beware of limitations set in the insurance plan that can impact the overall billing process. The eligibility verification can also be determined by double check the insurance coverage policy plans.
Denial Code 252
This denial occurs when a different insurance company has already paid for the service the healthcare center has asked from the current insurance company. In this case, there is a primary payer who has already paid and then the secondary insurance company will deny for the claim under the denial code 252. This submitted claim is against the COB benefits. It can impact the overall billing process and the patient will not be able to receive the payment for other services from the secondary insurance company.
It is important to follow the COB rules on order to get reimbursements on time without denial code 252. Medical Billing Professionals always verify the information before submitting the denials like understanding the COB rules; communicate with the providers and with patients about the prior reimbursements and history of the previous medical billing. Medical billing needs to have the complete information about the patient’s medical billing history in order to avoid future claim denials.
Conclusion
To conclude, the blog highlights the important denial codes which can assist the medical billing professionals to keep an extra eye on the insurance company’s policies and standards regarding billing procedures. To avoid these denials, healthcare providers need to maintain the record of the patient’s information and history of the billing process with previous insurance companies. The theoretical information about denial codes serve as the reminder for the practitioners to avoid major problems while submitting the claims. Implementing proven strategies, using advanced techniques and collaborating with the medical billing experts can reduce the risks of revenue loss.