Top 10 Reasons Medical Claims are Denied

Have you implemented a Process Improvement Program for your hospital or medical practice Revenue Cycle? It is the only way to ensure the integrity of your processes and collect all of the revenue you have earned. One of the first steps is to identify areas of opportunity. I analyzed the denial data from hospitals and medical practices across the country for all of 2019. Do you know your top 10 claim denial reasons?

Here are the Top 10 Reasons Medical Claims Are Denied, in order of frequency:

  1. Claim/service lacks information which is needed for adjudication or has billing errors. This could include just about anything such as a correct policy number, demographic information, diagnosis code, modifier, etc. The submitted claim was either not complete or not accurate.
  2. Non-covered charge(s). The payor does not cover the service, equipment, or drug.
  3. Duplicate claim/service. A claim was previously submitted and paid. Likely, the payment was not correctly or timely posted.
  4. Expenses incurred after coverage terminated.  The patient’s policy ended before the date of service, and eligibility was likely not verified before the patient encounter.
  5. These are non-covered services because this is not deemed a `medical necessity by the payer. The payor determined that the services or equipment provided were not medically necessary. This denial will require an appeal with supporting documentation.
  6. This care may be covered by another payer per coordination of benefits. The payer has determined that the patient has coverage benefits provided by another payer with primary payment responsibility that must be exhausted before any remaining balance may be submitted for payment under a secondary plan. The claim was filed to the incorrect payer.
  7. The time limit for filing has expired. Each payer has a deadline by which a claim must be filed to be eligible for payment. A claim should never be lost to bad debt for failure to meet a filing deadline.
  8. This service/equipment/drug is not covered under the patient’s current benefit plan. The payor may pay for the service, equipment, or drug, but the patient’s specific plan does not provide the benefit.
  9. Previously paid. Payment for this claim/service may have been provided in a previous payment. The payor may have paid as part of an earlier or related claim, as part of a flat fee, or may have paid another provider that billed for the same service on the same day or in the same global period.
  10. Service not payable per managed care contract. The contract between the provider and the payor does not provide for payment for the service.

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