Top 5 Reasons For Medical Billing Denials

by  Find-A-Code™
Apr 10th, 2023

The last thing healthcare providers want is a stack of denials coming in from insurance companies. Providers and their coding and billing departments work extremely hard to avoid denials. But denials still happen. Even the most accurate coding and billing departments make mistakes from time to time. When they do, payers have no problem jumping on those mistakes to deny claims.

If you are involved in the medical coding industry, you are probably aware that there are two types of claim denials: hard and soft denials. A hard denial is irreversible. Once its issued, the provider can forget about being paid. A soft denial is reversible if the provider can rectify whatever mistake led to the denial.

Denials are not good whether they are hard or soft. Figuring out why claims are denied paves the way for avoiding future issues. To that end, here are the top five reasons medical bills are denied:

1. Missing Information

As many as 42% of all denials are in some way related to missing information. A claim could be missing the patient's Social Security number. It could show an incorrect plan code. Everything from demographic to technical information can lead to claim denial if it is incomplete or inaccurate.

This is the primary reason receptionists verify information every time a patient visits. Taking every possible opportunity to verify information limits the opportunity for mistakes or inaccuracies to be left ignored.

2. Duplicate Claims

Duplicate claims are the next most prevalent reason for denials. A duplicate claim occurs when more than one claim is filed for a single visit on the same day, at the same location, for the same patient, and for the same service item. We give billers the benefit of the doubt in assuming that duplicate claims are accidental. Medicaid and Medicare are not necessarily so gracious. Neither public system looks kindly on duplicate claims.

3. Previously Paid Services

Due to the complexity of our medical billing system, it is not unusual for claims to overlap. Separate claims by different billers can result in the adjudication of some services through one claim with a second clean request payment for the same services. To put it as simply as possible, payers will deny a claim if some or all the services listed on it have previously been paid through a separate claim.

4. Services Not Covered

This next reason for claim denials, billing for services not covered under the patient's plan, is pretty easy to avoid. And yet, it still happens. Whether it is a mistake on the coding end or a billing procedure error, providers still submit claims for non-covered services.

This particular issue is one that insurance companies are especially sensitive to. They go to great lengths to make sure they do not pay for services and procedures they have not agreed to cover. Routinely billing for non-covered services could create a problem between provider and payer.

5. Expired Time Limits

Though there are exceptions to the rule, most payers put time limits on medical claims. They want to get claims paid in a timely manner rather than stringing things out endlessly. Unfortunately, missing a deadline often results in a hard denial. This explains why medical coders and billers are usually under such pressure to meet deadlines.

The vast majority of medical bills make it through to payment without issue. Medical coders and billers know their jobs well enough to avoid continual mistakes. But when mistakes do happen, claims can be denied. It is not a situation any healthcare provider or its billing department want to be in.