If you are going to start your career in medical billing, then understanding these denial codes is very important.
However, claim denials are the most irritating thing that usually happens. Denial codes in medical billing help in understanding why insurance companies have declined the claim.
Below, we will discuss what are denial codes and the most common codes with reasons for claims disapproval. We will also provide measures to avoid these issues in the future and to have a smooth cash flow.
What Are Denial Codes?
Insurance companies use denial codes to tell what was wrong with the claim and why they rejected it. These codes give reasons for claim denials in medical billing, and this helps healthcare providers to know what is wrong with the submission so they can work on it. Understanding the reasons behind claim rejection becomes more clear with these denial codes in medical billing.
List of Top Denials in Medical Billing
Below are the most common denial codes that healthcare providers come across in medical billing:
CO – 15
This means that the claim was submitted with the incorrect authorized number for service or procedure. You must take prior approval for specific procedures to get full coverage. After getting approval, enter the correct prior authorized number on block no 23 on the form. If this is not done rightly, it ends up with a claim denial.
CO 16 Denial Code
CO16 denial code in medical billing is another common denial code that the billing team frequently sees.
When the claim is rejected with this code, it means that the data is missing or there are incorrect modifiers. It can happen due to technical or demographic errors. However, to avoid this issue, make sure to check your claim by the clearing house before submitting it.
CO 18 Denial Code
This denial code shows that there is double billing. This means that the service is billed more than once or the patient gets the same service multiple times in a day without using modifiers.
To avoid these types of denials, you must be up-to-date with duplicate billing policies. However, if you can’t find any good reason for the claim rejection, then you can file an appeal.
CO 29 Denial Code
CO – 29 code is another most common claim denial code in medical billing which means that the claim is submitted after the due date. Every health plan and insurance companies provide a timeframe to submit a claim. You should know about the duration and follow it to avoid these denial codes.
CO27 Denial Code
When the patient’s insurance coverage expires and the claim is submitted after that, the insurance company will reject it with a denial code CO – 27.
CO 97 Denial Code
Several services are performed together as one treatment. Multiple claims for all services result in claim denial with code CO – 97. Because insurance companies do not pay separately for each service, hence they pay the whole amount for the treatment.
How to Avoid Claim Denial in Medical Billing
There are proven tips and ways to have a smooth billing procedure. Follow these tips:
Staff Training
Train your staff enough that they should be fully informed about the latest updates in claims regulations. Lack of training causes errors in making claims that lead to revenue loss and denials.
Latest Technology
Use the latest technology to prepare bills and claims. However, when claims are made by humans, there are greater chances for errors and incorrect information. So, incorporate the latest technology in your billing system to avoid claim denials.
Complete Documentation
Make proper documentation since incomplete documentation is the major cause of claim denials.
Avoid Delay Submission
Submit your claims on time. Delays in submission cause denials, and it would be so frustrating. So, keep up to date with the given timeframe for claim submission by different insurance companies and give training in time management to your billing staff.
Make an Appeal
Last but not least, if your resubmitted claim gets rejected, and you know there is no valid reason behind it, you can make an appeal. For this, you must know the appeal consideration of a company because the appeal rules vary with each company.
Conclusion
Billing is the trickiest part of the healthcare industry. Frequent claim denials can cause frustration for billing staff. Moreover, understanding these claim denial codes in medical billing is important to understand where things went wrong while submitting a claim. Plus, these codes help the medical billing staff to take action accordingly.
However, it is better to outsource your billing tasks to experts. So, call us now to have better revenue cycle management in the healthcare system. We have trained staff that knows about codes and denial management in medical billing. Plus, we use the latest technology to prepare bills and claims, which have zero chance of having errors.
So, let us handle your billing tasks while you focus on giving care to your patients!