Common Claim Denial Categories and How to Fix Them

Claim denials can significantly impact revenue for healthcare practices. Understanding common denial categories and how to prevent them can streamline billing operations and improve cash flow. This article breaks down the most frequent claim denial types and provides actionable solutions.

Coverage and Eligibility Denials

These denials occur when a patient’s insurance is inactive, expired, or does not cover the billed service. Common denial codes include CO1, CO26, CO27, PR31, PR252, and PR272.

• Verify patient eligibility before services using payer portals or real-time eligibility tools.
• Double-check policy details such as the patient’s name, date of birth, and policy number to prevent clerical errors.
• Confirm coordination of benefits if the patient has multiple insurers to ensure the correct payer is billed.
• If no coverage exists, discuss self-pay options with the patient upfront.

Duplicate and Already Paid Claims

These denials occur when the same claim is submitted multiple times or when a service has already been paid under another claim. Common denial codes include CO18, P18, O23, and PI29.

• Before resubmitting a claim, check its history to confirm it has not already been processed.
• If a service was legitimately repeated, apply the correct modifiers (e.g., 76 or 59).
• If the denial was due to a processing error, request a review from the payer and ensure all necessary corrections are made before resubmission.

Coding and Documentation Errors

These denials arise when claims contain missing, incorrect, or incompatible codes, such as invalid modifiers or diagnosis mismatches. Common denial codes include CO4, CO6, CO9, CO16, CO55, PR55, and PI1.

• Review CPT, HCPCS, and ICD-10 codes before submission.
• Ensure modifiers correctly describe the performed service.
• Check clinical documentation to confirm it supports the billed procedure.
• Use claim scrubbing tools to detect potential errors before submission.
• If denied, appeal with corrected coding and supporting records.

Authorization and Pre-Certification Issues

These occur when a procedure requiring pre-authorization is performed without prior approval. Common denial codes include CO15, CO50, CO39, CO197, and P23.

• Verify authorization requirements before scheduling procedures.
• If a procedure was performed without prior approval, check if the payer allows retroactive authorization in emergency cases.
• Appeal with supporting medical necessity documentation.
• Always document authorization approvals in the patient file to avoid future denials.

Fee Schedule and Contractual Adjustments

Denials in this category occur when the billed amount exceeds the allowable limit, or a service is considered bundled. Common denial codes include CO45, C59, CO97, CO122, and PI45.

• Review payer fee schedules to ensure billed amounts align with contracted rates.
• If a service is bundled, use the correct modifiers to separate it when appropriate.
• If an adjustment seems incorrect, appeal with documentation proving correct billing.

Medical Necessity and Policy Exclusions

These denials occur when a payer deems a service unnecessary, experimental, or non-covered. Common denial codes include CO167, CO222, CO242, and P204.

• Review the payer’s medical necessity guidelines before submission.
• If denied, submit an appeal with clinical documentation justifying the medical necessity.
• If the provider strongly disputes the denial, request a peer-to-peer review to discuss the case directly with the payer.

Final Thoughts: Be Proactive with Denial Management

Denial management is all about being proactive. By understanding why claims are denied and ensuring accurate eligibility verification, coding, and documentation, you can reduce denials, speed up payments, and protect revenue.

If your healthcare practice is struggling with claim denials, don’t just accept them—analyze them, correct them, and fight to get your claims paid. Every unchallenged denial is lost revenue.

For expert assistance in managing claim denials, visit Svast Healthcare Technologies.