Understanding Denial Code PR 27: Top Causes and How to Prevent Them

Handling claim denials effectively is crucial for maintaining a healthy revenue cycle in any healthcare practice. One of the more common issues faced by billing teams is Denial Code PR 27. This denial code signifies patient responsibility, usually due to the patient’s insurance coverage ending. Let’s take a deeper look into what Denial Code PR 27 is, the primary reasons it occurs, and how you can prevent it to ensure a smoother billing process.

What Is Denial Code PR 27?

Denial Code PR 27 is a specific rejection message from insurance payers indicating that the claim falls under patient responsibility. This generally happens when a healthcare provider submits a claim for services rendered after the patient’s insurance coverage has expired. It could involve costs like co-pays, deductibles, or the entire service fee if coverage was inactive at the time of the visit.

Understanding this denial code is essential for reducing revenue loss and streamlining claim processing. By addressing the common causes of PR 27 denials, your practice can collect payments more efficiently and reduce the labor involved in re-submitting claims.

Top 4 Causes of Denial Code PR 27

1. Outdated Patient Insurance Information

One of the primary causes of PR 27 denials is failing to update a patient’s insurance information before providing services. When billing is done using an old or inactive insurance plan, the claim is immediately flagged, leading to a PR 27 denial.

How to Prevent This:

• Routine Insurance Verification: Verify patient insurance details at each visit to ensure the information is current.
• Automated Systems: Use automated insurance verification systems that check coverage status in real-time before services are provided.

2. Delayed Claim Submission

In medical billing, timing is everything. If a claim is submitted after the patient’s coverage termination date, the insurer will likely deny it with a PR 27 code. Delays in claim submissions can stem from internal processing issues or administrative backlog.

Prevention Tips:

• Set Internal Deadlines: Establish strict timelines for submitting claims to avoid delays.
• Regular Monitoring: Implement tracking mechanisms to monitor the progress of claims and flag any that are nearing submission deadlines.

3. Insufficient Communication with Patients

Lack of communication between your billing team and patients is another key contributor to PR 27 denials. If patients do not inform the practice of changes in their insurance coverage, outdated information can be used during billing, resulting in a denied claim.

Solutions:

• Proactive Patient Outreach: Regularly ask patients if there have been any changes to their insurance coverage, especially during appointment scheduling and check-in processes.
• Patient Education: Educate patients on the importance of providing updated insurance information to prevent billing issues and ensure smoother processing.

4. Billing and Coding Errors

Errors in the billing process, such as incorrect service dates or misapplied codes, can lead to claim denials. These errors might not only cause a PR 27 denial but could also lead to multiple rejections before the claim is finally submitted correctly, by which time the patient’s coverage may have expired.

How to Avoid Billing Errors:

• Implement Quality Checks: Introduce a review process to catch common errors before claims are submitted.
• Ongoing Staff Training: Provide continuous training for billing and coding staff to stay updated with the latest coding guidelines and payer-specific requirements.

Why Reducing Claim Denials Is Vital for Your Practice

According to the American Academy of Family Physicians (AAFP), the industry standard for claim denials is to keep the rate below 5%. Achieving this benchmark can be challenging, but it is essential for reducing administrative workload and enhancing financial performance. By focusing on the most common reasons for Denial Code PR 27, healthcare practices can effectively lower their denial rates and improve overall revenue cycle efficiency.

Steps to Take When You Receive a PR 27 Denial

• Verify Insurance Coverage: Check the patient’s insurance coverage status at the time of the service.
• Contact the Patient: Reach out to the patient for updated insurance information or to confirm if they need to pay out-of-pocket.
• Resubmit the Claim: If updated coverage information is obtained, correct the billing details and resubmit the claim promptly.

Enhance Your Practice’s Revenue Cycle with Expert Support

Understanding the causes of Denial Code PR 27 and implementing proactive solutions is crucial for optimizing your revenue cycle. By reducing denials, your practice can increase cash flow, reduce the time spent on reworking claims, and provide a better patient experience.

For healthcare practices looking to improve their revenue cycle management and minimize claim denials, partnering with a reliable RCM company can make a significant difference. At Svast Healthcare Technologies, we specialize in providing tailored solutions that help practices reduce denial rates, enhance cash flow, and streamline billing processes. Contact us today to learn how we can assist your practice in achieving better financial outcomes.