Transforming Denied Claims into Revenue-Understanding CO 252

Denied claims are a common challenge in the healthcare industry, with one-third of all submitted claims being denied or ignored upon initial submission. While this might sound discouraging, it also means that 66% of your claim revenue is still being received. However, the financial impact of denied claims is substantial, with hospitals losing an average of $5 million to their total revenue in 2021 due to these denials. These losses are not confined to large hospital systems; smaller healthcare organizations face similar financial bottlenecks, which can lead to serious consequences, including closures.

A significant issue is that 60% of denied claims are never resubmitted, which means healthcare practices are literally leaving money on the table. Understanding the patterns of claim denials and educating staff on fixing these issues is crucial. One of the most common denial codes is CO 252, which falls under the category of Contractual Obligation. This category includes over 200 distinct code combinations, often indicating a need for additional documentation to support the claim.

Understanding CO 252:

• CO (Contractual Obligation): Indicates a denial based on the contract and the fee schedule amount. It often involves adjustments due to joint payer or payee regulatory obligations or when provider fees exceed the reasonable and customary amount for which the patient is accountable.
• CO 252: Specifically means the claim needs additional documentation. It usually comes with a Remittance Advice Remark Code (RAR), which provides further details on the denial.

Common RAR Codes Associated with CO 252:

• N4796: Explanation of benefits, coordination of benefits, or Medicare secondary payer.
• N710: Missing notes.
• N712: Missing summary.
• N714: Missing report.
• N716: Missing chart.

With over 1,200 different RAR codes existing, it can be overwhelming to manage these denials efficiently. However, the Council for Affordable Quality Healthcare’s core rule streamlines this by indicating that only around 111 of those codes typically apply to CO 252.

Strategies for Effective Denial Management:

• Pattern Recognition: Identify common denial patterns within your submitted claims. This helps in preemptively addressing issues that frequently lead to denials.
• Staff Education: Equip your team with the knowledge to understand and resolve common denial codes, such as CO 252 and its associated RAR codes.
• Documentation: Ensure that all required documentation is complete and correctly submitted with the initial claim to minimize denials.
• Resubmission: Develop a robust process for resubmitting denied claims, particularly those that are denied due to missing or incomplete documentation.

By implementing a sound denial management process, healthcare practices can avoid unnecessary revenue losses and improve their financial health. Every unresolved claim is potential revenue that could support your organization’s mission and services.

Take control of your denial management today and turn those denials into approvals. With the right approach and resources, your organization can secure its financial future and continue to provide excellent care to your patients.

For more information and resources on how to improve your practice’s revenue cycle management, contact Svast Healthcare Technologies.