The 10 Most Common Health Insurance Claim Denials

Doctors Seek Higher Fees From Health Insurers

In order for a medical claim to be approved and paid, it needs to be filled out properly. If just one mistake is made, it can result in a denial. It is up to medical offices to make sure that everything is filled out properly if they want to get payment. When the people who handle medical claims know the most common errors on medical claim forms, they can avoid making them, which will result in more paid claims.

Incorrect Patient Identifier

The patient information on a claim needs to be accurate if the claim is going to get paid. If the information is entered into the claim incorrectly, the company won’t know who to make the payment for. There are a few common patient identifier errors that are made.

  • The name of the subscriber or the patient is spelled wrong.
  • The date of birth of the subscriber or the patient doesn’t match what the insurance company has in their system.
  • The subscriber number is incorrect or missing.
  • The subscriber’s group number is incorrect or missing.

Terminated Coverage

If a patient’s coverage is canceled or if they give an outdated card at the time of service, the claim will be denied. The best way to avoid denials, for this reason, is to verify the patient’s eligibility before they come in for their appointment. This will allow the provider to ask for a current copy of their insurance card or to deny service if the patient doesn’t have any active insurance.

Failure to Get Prior Authorization for Certain Services

There are certain services which would require a prior authorization from the insurance company before they agree to pay. Expensive radiology services such as ultrasounds, CT scans and MRI’s are examples of these services. It is up to the medical services provider to reach out to the insurance company and request a prior authorization. If they don’t do this, the claim will likely be denied.

Non-Covered or Excluded Services

Every insurance plan is different. Some cover certain services that others don’t. Billing for an excluded or non-covered service is a very common reason for denials. It is important to contact the patient’s insurance company before the service is provided to make sure that the service is actually covered. If it is not, the patient would be required to pay 100 percent of the cost of the service.

Ignoring Requests for Medical Records

There are some cases where the insurance company will request medical documentation in order to adjudicate the claim. If they don’t get the information that they are looking for in a timely fashion, they can deny the claim. Some of the information that insurance companies request includes:

  • The patient’s medical history
  • The physician’s physical and consultation reports
  • The patient’s discharge summary
  • Any and all radiology reports
  • Any and all operative reports

The Wrong Primary Insurance Was Billed

When a person has double coverage, it can result in denied claims. For example, if a child has insurance through his mother and his father, the medical facility would need to know which one is the primary insurance. In some cases, the parents won’t know. They will just give the medical office both of the cards. In order for the medical office to know which insurance is primary, they would need to follow certain guidelines.

  • Dependent/NonDependent Rule: Whoever holds the insurance, that would be their primary. Their spouse’s insurance would be the secondary.
  • The Birthday Rule: For dependent children, the parent who is older holds the primary insurance.
  • The Custody Rule: If a couple has divorced but there is nothing specified in the divorce decree, the custodial parent’s coverage would be primary, the custodial parent’s new spouse would be the secondary, the non-custodial parent’s coverage would be third, and the new spouse of the non-custodial parent’s insurance would be fourth.
  • Medicare Secondary Payer: If a patient has Medicare and a Medicare supplement, the Medicare would be primary and the supplement would be secondary. If the patient has a Medicare replacement plan, the replacement insurance would override the Medicare, and it would be the primary and only insurance unless the patient has a secondary. The replacement cancels out the traditional Medicare.

If the provider is still unsure whether the insurance is primary, secondary, or tertiary, they would simply need to ask when they call to verify the insurance. This will prevent any errors when trying to follow the coordination of benefits guidelines.

Failure to Bill the Liability Carrier

If the patient was seen as a result of an auto accident or a work related accident, the claim would need to be coded correctly, and the carrier will not pay until the auto insurance or the worker’s compensation carriers have been billed first. In cases such as these, the third party liability insurance should be billed first. If it isn’t, the claim will be denied. In the case of accidents, one of the following third party insurance companies should be filed first:

  • Business liability insurance
  • Homeowner’s insurance
  • Worker’s compensation insurance
  • Med Pay

Invalid or Missing CPT Codes

In order for a claim to be approved and paid, the provider must enter a code for the services that they performed. If these codes are entered incorrectly, the claim will be denied. There are often changes in the proper billing codes as well codes for new procedures. If the medical biller does not stay up to date with the changes, the claim can be denied.

The Timely Filing Deadline Was Missed

Every insurance company has a certain amount of time that they will accept and pay a claim. If the claim is not filed within that time period, the insurance company will not pay it. It is important that the medical provider is aware of the timely filing deadline for each insurance, and they file before the deadline.

No Referral Provided

There are certain procedures that would require a referral from the patient’s primary care physician. If this referral is not included with the claim, there is a good chance that it will be denied. In most cases, it is the patient’s responsibility to get the referral, however, if necessary, the provider can request it as well.

The more medical providers know about the reasons that medical claims are denied, the easier it will be to avoid making the mistakes in the first place.


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