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You are here: Home / Insurance / What Are 5 Reasons Why A Claim May Be Denied Or Rejected?

What Are 5 Reasons Why A Claim May Be Denied Or Rejected?

December 19, 2022 by Post

If an insurance company decides not to pay a claim submitted by a patient, this might have severe ramifications for both of you. Even if you believe you have a high chance of winning an appeal against a claim rejection, you should not pursue legal action. It is in the patient’s and your clinic’s best interest to proceed in this manner.

If you are aware of the most common reasons for insurance claim denial, you may take steps to reduce your chances of experiencing one. To lessen the frequency with which claims are denied or rejected due to clerical errors, you should be familiar with and use any technological solutions that your practice’s contractual insurers supply (claims that are evaluated but payment is rejected). Here are the top 5 reasons claims are denied and what you can do to avoid them in the future.

1. An obligatory prior certification or authorization was not obtained

Patients and the practice stand to lose both time and money if pre-certification isn’t obtained. Knowing which insurance providers call for pre-authorization and in what circumstances is essential.

Your medical billing software can help you by indicating particular treatments and insurance providers so you know what to do. It is preferable to seek pre-permission for a procedure that may or may not be carried out rather than carry out the operation and then seek retrospective authorization.

2. Mistakes in patient information or diagnosis/procedure codes on the claim form

A common cause of claim denials is a typo in the patient’s name or a transposition of numbers in the patient’s ID number, which are easily avoidable clerical mistakes. These are temporary solutions, but they lengthen the time it takes to generate money, so you should avoid them if possible. Claims may be denied due to incorrect diagnostic and procedure codes. Although these cases are typically won on appeal, avoiding them is preferable. Coding experts and robust software are essential for accurate medical billing.

3. The Insurance Company Received the Claim After the Due Date

When filing a claim, it’s important to remember that various insurance companies have different deadlines and procedures for what happens if you miss one. Some issues may be resolved with a simple phone call, while others may need additional forms to be filled out.

Medical billing software may help remind users of upcoming claims submission deadlines and what to do if they miss them. To avoid a slowed revenue cycle, claims should be submitted as soon as feasible once services are completed.

4. Not Enough Evidence of Medical Necessity

An insurance company may refuse to pay for treatment if it determines that it is unneeded. These are stressful scenarios for everyone involved, but they are avoidable if you take the proper precautions. Good communication among physicians, medical billing staff, insurers, and patients is crucial when medical necessity isn’t black and dry.

5. Non-Participation in the Provider’s Network

Patients may need to be made aware that their insurer’s provider network changes from one year to the next or that switching insurance carriers might affect their access to and coverage for certain medical professionals.

Suppose your billing staff can get a patient’s insurance information right away. In that case, they’ll know whether or not your clinic is in the patient’s insurer’s network and, if not, what kind of benefits the patient may anticipate. Once again, your medical billing software may help by keeping track of the many networks your clinic belongs to.

Disputes over claims may cause lengthy delays in being paid for your services, which irritates everyone. There are several ways to reduce the odds of anything horrible occurring. Good communication with patients and insurers, well-trained coding specialists and front desk staff, and enhanced medical billing systems may decrease claim rejections and administrative difficulties.

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