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Feeling rejected? Avoid these common reasons for claim rejections and denials

common reasons for denials
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Medical claim rejections and denials can stand in the way of reimbursements, and ultimately, practice revenue. Why do claims get rejected or denied? To know the answer is to appreciate the difference between rejections and denials. By understanding the most common reasons, you can learn to anticipate and take steps to avoid them.

Common reasons for medical claim denials. Illustration.

What’s the difference between a rejected claim and a denied claim?

A claim rejection happens before a claim is processed, most often due to incorrect data. A denied claim, meanwhile, has been processed but found to be unpayable, possibly because of the terms of the patient-payer contract, or for other reasons detected during processing.

The Greenway Clearinghouse Services Portal processes more than 270,000 claims per day. Although nearly 98% of those claims are accepted by payers for adjudication at first pass, we’ve come across a wide range of rejection and denial reasons. These are the most common.

Rejection reason: duplicate claims

To avoid duplicate claims, always check the status of a claim before resending. Also, check ERA for previously posted claims, and verify the initial denial reason. You may submit an appeal for denied claims, providing documentation with a redetermination request, but do not resubmit claims while identical claims are still pending, or when a partial payment has been made. Also, avoid automatic rebilling.

Rejection and denials reason: eligibility

Greenway’s eligibility feature allows you to verify the patient’s information prior to the visit. Look out for these common rejection descriptions:

  • Entity’s contract/member number
  • Subscriber and subscriber ID not found
  • Entity not eligible for benefits for submitted dates
  • Patient relationship to the insured must be self (if using Medicare and Medicaid)

To avoid eligibility rejections or denials, ensure the patient provides accurate information before or during registration and scheduling, obtain copies of the patient’s insurance card, and try to avoid data entry errors. Also, verify dates of eligibility and benefit coverage, and obtain authorization when needed.

Rejection reason: payer ID missing or invalid

Check the payer ID. Is it missing or invalid? You can search our list of connected payers, which is also accessible through the Greenway Clearinghouse Services portal, for up-to-date payer IDs. Always make sure to use the correct payer ID for the type of claim — whether it’s institutional, professional, or dental. Also, include a secondary payer ID if necessary.

Rejection reason: billing provider National Provider Identifier (NPI) missing or invalid

First, be sure Greenway has the most up-to-date tax ID and provider information for your practice. Consider these common rejection descriptions:

  • Submitter not approved for electronic claim submissions on behalf of this entity
  • Entity's national provider identifier (NPI)
  • Provider is not enrolled/approved for EDI claims with this payer

To avoid billing provider “missing or invalid” rejections, confirm the billing provider is credentialed with the payer or payers and enrolled with the clearinghouse to submit electronic claims. Confirm the correct group or individual NPI is credentialed, and make sure the correct tax ID is credentialed as well.

Rejection reason: diagnosis code

To get the most revenue per service, make sure you’re using the most updated codes and coding at the highest level per procedure. Codes must be as specific as possible. Common rejection descriptions include:

  • Invalid or not effective on service date
  • Invalid diagnosis code or principal diagnosis code
  • Must be valid ICD-10-CM diagnosis code

To avoid rejections due to a missing or invalid diagnosis code, be sure to verify the diagnosis is active for the date of service. Also, make sure the diagnosis is consistent with procedure being performed.

Applying these suggestions, you can identify the most common reasons for claim rejections and denials, update your processes, and improve your clean claim rate.

“Denials and rejections have gone down, and the Claim Control option makes it so easy to stay on top of it.”
Carla Farrell, Billing Manager with Bridging Community with Health Care

Looking for further information?

Greenway Clearinghouse Services is the go-to clearinghouse for Greenway Health customers, providing a holistic view of claim and financial data to help them manage the full claim cycle.

Watch this webinar recording to learn how to identify and fix these common medical billing errors before submission.

DOWNLOAD WEBINAR SLIDES

Denial management is an area of focus for Greenway Revenue Services, along with data analysis and outstanding A/R follow-up. Check out our Revenue Cycle Management page to learn more.

“I believe that our clean claim rate has drastically improved,” said Carla Farrell, Billing Manager with Bridging Community with Health Care. “Denials and rejections have gone down, and the Claim Control option makes it so easy to stay on top of it.”

For more information, CLICK HERE to schedule a conversation with a Greenway representative. Or watch our 3-minute overview video HERE.

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