Top 10 Causes of Claim Denials in Medical Billing

Causes of Claim Denials

Insurance companies make claim denials and can negatively impact the medical billing process of healthcare organizations. There are various reasons as to why insurers deny reimbursement claims and you can implement some steps to resolve them.

This blog will uncover the top ten causes of claim denials and how they can inhibit the medical billing process for hospitals and clinics. Continue reading further to find out the cause for insurance companies to deny your reimbursement claims and how you can lower your claims denial rate.

What Is a Claim Denial?

A claim denial is a reimbursement claim that an insurance company has denied. It means that the claim made by a healthcare organization is deemed unpayable by that specific insurer. 

You must determine the reason for claim denials such as duplicate claims as healthcare organizations cannot just simply resubmit them. The insurers usually send claim denials back with an explanation for their denial. You can use that information to file an appropriate appeal and request for reconsideration.

Top 10 Causes of Claim Denials in Medical Billing

Insurance companies can reject your reimbursement claims for a number of insurance denial reasons. They can include a lack of patient eligibility, insufficient reimbursement details and repetitive billing. There are other denial reasons as well like invalid coding, overdue filling, and many more.

    1. Lack of Patient Eligibility

Lack of Patient Eligibility in Medical Billing

The necessity of patients to avail healthcare procedures and treatments is one of the major reasons for medical claims denials by insurance companies. Their necessity may not correspond to sufficient eligibility for their particular medical service.

Your patients may not have fulfilled the criteria and caused their insurers to make relevant eligibility denials in medical billing for them. Their ineligibility leads to insurance companies deeming your reimbursement claims unpayable due to your patients’ ineligibility.

In other cases, they can set up a waiting period before approving your reimbursement claims to verify the details of patient eligibility. They usually refuse to cover the healthcare services or other services intended to care for patients if they do not provide those details within the waiting period.

    2. Insufficient Reimbursement Details

Insufficient Reimbursement Details

Insurance companies can also deny your reimbursement claims if you have provided insufficient details for their processing. The insurers may not be able to completely validate the information required to process those claims.

As an example, you may have missed some required information fields and the insurance company may have declared them as left out. In such cases, they are not liable to process your medical billing claims and can make denials.

Such reimbursement claims do not comply with insurance regulations as insurers require complete details for verification. You have the option to resubmit your reimbursement claims after providing the missing information. You can also work with them to prevent future denials.

    3. Repetitive Billing

   Repetitive Billing

In addition, you can endanger your reimbursement claims if you bill a single medical service more than once. This mishap is possible if you generate the bill for that service on two different dates. You may also have accidentally billed for two different units of that service.

An example of this mistake is billing two sessions for physical therapy instead of a single one. You can also repetitively generate bills if more than one of your medical practitioners attends to the relevant patient.

You must scan your medical bills to identify any instances of repetitive billing. In this way, you can mitigate those specific errors before insurance companies identify them. This mitigation can prevent claim denials for your healthcare organizations with all services accurately billed.

    4. Invalid Coding

Invalid Coding

Insurance companies can also make claim denials if you assign invalid medical codes to your healthcare treatments and procedures. This mistake is prominent with the Current Procedural Terminology and International Classification of Diseases (10th Revision) codes.

These specific codes are assigned as a standard procedure to maintain accurate details about specific services and patient diagnoses. Insurance companies usually deny reimbursement claims if they have assigned invalid codes.

They cannot verify details about your medical procedures through invalid codes. Therefore, they cannot determine their accurate reimbursements and compare them with your claims. You must maintain the set coding guidelines and ensure strict quality assurance for their processes.

    5. Overdue Filling

Overdue Filling

Furthermore, you may also have violated the policies of the insurers of your patients in terms of timely filing reimbursement claims. You may have crossed their deadline to file your claims which may have led to denials.

Most insurance companies have specific timeframes and only accept the claims submitted within them. These timeframes usually range from thirty to ninety days making the patient experience somewhat frustrating.

Your medical billers are responsible for ensuring that they file reimbursement claims within the appropriate timeframes. You can appeal your denied claims which can get approved sometimes. You must supplement them with valid reasons to increase their chances of getting approved.

    6. Demographic Entry Errors

Demographic Entry Errors

Your reimbursement claims can also have certain errors in the demographic entries of your patients. These errors can cause insurance companies to reject your denials as they may have invalid information about your patients.

The insurers can find irregularities in various details like incorrect insurance coverage or date of birth. Such details will not match those provided by your patients, so the insurance providers will not be able to process your reimbursement claims.

These cases are known as soft denials and you must consider them as first guards in order to solve them. You should rigorously scrub them and the future ones must be pre-scrubbed. Scrubbing will enable you to identify any invalid information in your claims beforehand.

    7. Services Not Covered

Services Not Covered in Medical Billing

You may also have filed reimbursement claims for those medical services that insurance providers do not cover. This mistake depends on the type of insurance plan taken by your patients as insurers offer different plans for different services.

In such cases, your patients may have to pay for the relevant procedures and treatments on their own or switch their insurance plans. Moreover, their insurance companies can also declare those services as medically unnecessary for your patients.

Healthcare organizations must regularly discuss their current benefits and insurance plans with patients. In this way, you can keep yourself updated about the status of the medical services they availed in terms of insurance coverage.

    8. Outdated Medical Codes

Outdated Medical Codes

The medical codes assigned to healthcare treatments are updated regularly based on industry regulations and guidelines. There have been several instances where hospitals and clinics are using outdated CPT and ICD-10 codes. 

These codes refer to the diagnosis and the medical services availed by patients. Therefore, updated codes are likely to cause clashes between different services. As a result, insurance companies may not be able to determine the valid ones for specific patients.

You can avoid claim denials in the future with experienced medical coders who are expertly aware of your services and their codes. They should also be willing to stay informed about any updates for Healthcare claim denials codes in medical billing and implement them wherever required.

    9. Prior Authorization Requirement

Prior Authorization Requirement in Medical Billing

There are specific medical services that require authorization from the insurers of patients before they are availed. Hospitals and clinics have to provide their complete details so the insurance companies can review and approve them.

The insurers are most likely to make medical billing denials if the relevant healthcare procedures and treatments are provided without getting approved. Therefore, you must always run your services by insurance companies before providing them so that they are kept in the loop.

    10. Inaccurate Appeal Filing

Inaccurate Appeal Filing

You must accurately file the appeals for your reimbursement claims as they can also be denied. They should contain new or additional details about your medical services that were missed in your original reimbursement claims.

Medically unnecessary medical service is one of the most common reasons given by insurance companies to deny claims. You can file accurate appeals for such reimbursement claims by attaching recommendations from your medical practitioners.

The recommendations should contain valuable details that comprehensively highlight the medical necessity of your services. In this way, insurance companies are likely to be convinced and approve your appeals.

The Bottom Line

This blog uncovered ten causes for insurance companies denying reimbursement claims in medical billing. These causes range from lack of patient eligibility and insufficient reimbursement details to outdated medical codes and inaccurate appeal filing.

Our medical billers are equipped to manage your claim denials and accurately file their appeals to approve your reimbursement claims. Contact us today and get your reimbursement appeals approved with our exceptional denial management service.

Frequently Asked Questions (FAQs)

    1. What are the top 5 denials in medical billing?

The top 5 denials in medical billing include missing reimbursement details, duplicate medical services, and expired filing limits. There are other denials as well like limited insurance coverage and repetitive billing.

    2. What are the common reasons for denials?

The common reasons for denials are inaccurate details of reimbursement claims and missed filing deadlines. Some other reasons comprise irregularities in modifier usage and inconsistent information.

    3. What are the common denials in medical billing?

The common denials in medical billing are billing errors caused by forgetting specific medical codes and accurately documenting their medical services. You may also provide an inaccurate service that is not covered by insurance companies.

    4. What are the types of denials?

The types of denials are named hard and soft. Hard denials in medical billing are irreversible and most likely to result in revenue loss. A soft claim denial can be reversed if healthcare organizations manage to accurately appeal it.

    5. What is a Code 44 denial?

A Code 44 denial refers to the ineligibility of Medicare patients to fulfill certain minimum requirements. These requirements make them unable to avail the coverage for services of an inpatient admission.


Leave a Reply

Your email address will not be published. Required fields are marked *

Call Us

Start Your Free 15 Day Trial Now!

Are you uncertain about the potential benefits our customized solutions can bring to your healthcare business? Why not give our Revenue Cycle Management (RCM) solutions a try? For the first 15 days, it's absolutely free! Witness the transformation we can bring to your medical billing operations.

Schedule a meeting!
Skip to content