DENIAL MANAGEMENT

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DENIAL MANAGEMENT

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Denial Management

 Denial is refusal/rejection of something requested, needed

or claimed.
 In medical billing, denial is a refusal of an insurance
company to pay for health care service(s) rendered by a
health care professional.
 Denial management refers to, taking corrective action and
preventive measures are established to avoid future
occurrence.

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CO16 – Claim/service lacks information which is needed for adjudication.

Reasons
 The CO16 remark code is an alert regarding missing or incomplete information that is required in
order to process the claim.

 Drug name and dosage may be missing

 Additional information is required for benefit determination

 Office notes/clinical documentation requested for claim consideration

 Referring/rendering physician information may be missing

 More specific/corrected billing/coding is required

 Missing appropriate modifier, diagnosis or procedure

 Insurance need information from patient for claim processing

Suggested Action(s)
 See the explanation of additional remark code(s) on the ERA under the code 16 for further
information that what type of information is requested for claim processing.
 If the additional remark code(s) is not provided, one should call insurance to get the
information needed to resubmit the claim
 Provide/attach/append/rectify claim information accordingly and re-file claim

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Example ERA (Electronic Remittance Advice)

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CO18 – Duplicate Claim/Service
Reasons
The charges submitted to insurance for processing have already been considered. This denial informs
the duplicate billing, previously considered for the patient.

Reason that may cause duplicate claim are;

 If more than one claim is submitted for the same health care procedure, for the same date of
service, the subsequent claim(s) will be denied as duplicate claim
 Service denied because payment already made for same/similar procedure within set time frame
 The service was billed twice but performed only once
 The service was performed more than once by the same provider, or group of providers, on the
same day
 The service was performed by another provider, and payment has already been made to that
provider
 The claim was re-submitted noticing no response from insurance or without corrected claim
indicator

Suggested Action(s)
 Never simply resubmit a denied claim citing the reason, duplicate claim; because it will just get
denied again with same reason
 Before resubmitting a claim, check claim status for previous submission to see original denial
 Fix the claim and resubmit with the correct information or appeal the original decision with
additional information
 Ensure appropriate modifiers are appended to claim lines if applicable, and resubmit the claim
 Make sure to apply “corrected claim” indicator while resubmitting a modified/corrected claim

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Example ERA (Electronic Remittance Advice)

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CO4 - The procedure code is inconsistent with the modifier used
or a required modifier is missing

Reasons:
 Procedure code and modifier mismatch
 The reported modifier is not appropriate to describe the performed services
 Insurance requires additional information (Modifier) to process the claim

Suggested actions:
 One should review patient’s account/claims to see if the submitted information is correct
 Determine (from CCI edit/coding team) which of the modifier is actually describing the performed
services
 Ensure necessary, appropriate modifiers are appended in the claim
 Resubmit the claim with appropriate modifier

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Example ERA (Electronic Remittance Advice)

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CO22 - Payment adjusted because this care may be
covered by another payer per coordination of benefits

Coordination of benefits (COB): When a patient is covered by more than one

insurance plans, then patient has to determine which insurance plan has the primary
payment responsibility and which plan will act as secondary.

Reasons
 Patient has other insurance which covers the services as primary payer
 Patient has not updated the COB information
 Missing primary insurance EOB/payment information

Suggested Actions
 Verify plan’s eligibility and consult COB section to confirm primary insurance
 Ensure that the correct primary insurance for the patient has been billed
 In case of missing primary payment information, talk to EDI/submission team to
make sure it was sent in/with respective segment-loop/HCFA form or resubmit with
primary EOB
 If COB information is not updated by the patient, then bill the patient with rejection
type: 19 - Insurance needs COB information from patient.

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Example ERA (Electronic Remittance Advice)

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CO119 - Benefit maximum for this time period has been
reached
Lifetime Maximum: An insurance contract with the patient, which bounds
the amount that can be paid in the policy period, each insurance policy has a
lifetime maximum.

Reasons
 Patient’s annual benefits for the services billed has been exhausted
 Maximum benefits crossed for a specified service
 Insurance has paid the maximum amount according to aggregate limit and
cannot pay more amount

Suggested Action
 One should review patient’s account/claims to see if the submitted
information is correct
 Bill to patient

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Example ERA (Electronic Remittance Advice)

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B7 - This provider was not certified/eligible to be paid
for this procedure/service on this date of service

Reasons:
 Claim’s date of service is prior to the provider’s Medicare effective date or after his/her termination
date
 Procedure code is beyond the scope of the provider’s Clinical Laboratory Improvement Amendment
(CLIA) certification, or the laboratory service is missing a required modifier
 Provider was ineligible to perform the submitted services
 Provider may no longer be participating or in contract for billed procedure(s)

Suggested Actions:
• Verify the date of service, if it is incorrect, resubmit claim with correction
• If the date of service is correct, view enrollment information through the Internet-based Provider
Enrollment, Chain and Ownership System (PECOS) and confirm provider’s Medicare effective date
• If provider was not certified/effective on the date of service, then claim needs an adjustment
• If the submitted procedure is being paid previously, then initiate the call for reprocessing
• Inform New Account Setup Department (NASD) and provider with the detail received from insurance
for any rectification/correction

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Example ERA (Electronic Remittance advice)

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CO27 - Expenses incurred after coverage terminated

Reasons
 Termination of insurance coverage prior to receiving the services
 The date of service is subsequent to the termination of coverage

Suggested Action
 Verify that the claim was created in correct patient’s account
 Compare patient’s credentials from insurance card/information we’ve with the
credentials that are submitted to insurance
 Check the patient's eligibility for current and previous service dates;
 If patient has active coverage on the visit date, then generate a call with
reprocessing request
 If patient didn’t have coverage at the time the services were performed, then
patient should be billed with reason insurance coverage lapsed/did not exist

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Example ERA (Electronic Remittance advice)

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B15 - Payment adjusted because this
procedure/service is not paid separately
Reasons
 Service is not performed along with other services billed
 Procedure is mutually exclusive to another procedure on claim
 Service is not separately payable and is considered component of procedure(s) rendered on the
same date for the same patient by the same doctor
 Same/similar service was recently billed for this condition
 Charges are included in global fee of primary charges
 Multiple, simultaneous services are submitted to insurance
 Billed services may not be paid separately, additional information (Modifier/Medical notes) required
for claim processing

Suggested Actions
 Check the NCCI edits through Encoder Pro to ensure that most comprehensive codes are billed and
to determine, if the submitted service is bundled with another service or is component of other
procedure performed on the same date
 If it is a separate/distinct service, appropriate modifier is used to denote as a separate service for
reimbursement
 Medical notes may also support to prove the Medical Necessity

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Example

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CO29 - The time limit for filing has expired
Reason
 Charges are submitted after the defined filing limit by the payer

Suggested Actions
 Once denied post LF-Late Filing entry in claim
 An appeal within the appeal filing limit accompanying supporting documentation is prepared and filed to
insurance by our Appeal Team as a re-determination to consider the claim for payment
 If denied erroneously resubmit with proof of submission or get it reprocessed through reopening line
 A claim that has reached its filing limit should be submitted with appropriate LF indicator in first submission to
prevent late filling denial
LF Indicators
 Proof of Eligibility Unknown or Unavailable
 Litigation
 Authorization Delays
 Delay in Certifying Provider
 Delay in Supplying Billing Forms
 Delay in Delivery of Custom-made Appliances
 Third Party Processing Delay
 Delay in Eligibility Determination
 Original Claim Rejected or Denied Due to a Reason unrelated to the Billing Limitation Rules
 Administration Delay in the Prior Approval Process

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Example EOB (Explanation of Benefits)

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CO50 - These are non-covered services because this is not deemed
a medical necessity by the payer

Reasons
 The insurance company has doubts about the patient’s medical history or current
condition and they need more information for claim processing
 The performed services doesn’t appear to be medically necessary for the patient
 The diagnosis code may be insufficient to support medical necessity according to billing
guidelines
 The procedure code(s) billed is incompatible with the diagnosis code(s)
 Appropriate modifier or documentation is missing on the claim

Suggested Actions
 One should check that the diagnosis and procedures are appropriate according to NCCI
edits
 Consult Coding Team and provide/attach/append claim information according to their
feedback and re-file claim
 If the insurance just needs medical notes, the office should be requested to provide
medical notes for resubmission with the correspondence

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Example ERA (Electronic Remittance advice)

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CO31 - Claim denied as patient cannot be identified as
our insured

Reasons
 Subscriber or patient's name is spelled incorrectly
 Subscriber or patient's date of birth on the claim doesn't match the date of birth in
the health insurance plan's system
 Subscriber/policy number is incomplete or invalid
 Subscriber’s group number is missing or invalid

Suggested Actions
 Verify if the claim is submitted to correct payer
 Check patient’s eligibility through real time or obtain through insurance website to
make sure information submitted is correct and there is no mismatch
 Is case of any conflict, correct the information and resubmit claim
 If all seems correct, one should generate call for insurance to review the claim

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Example ERA (Electronic Remittance advice)

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CO252 - An attachment/other documentation is required to adjudicate
this claim/service

Reasons
 Insurance requires medical notes or any other documentation which is necessary
to process the claim
 Insurance need Primary insurance’s explanation of benefits for claim processing

Suggested Actions
 One should review patient’s account/claims to see if the submitted information is correct
 To further clarify which information is required, insurance call can be helpful
 Attach/provide requested information/documentation and resubmit the claim

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Example

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CO109 - Claim not covered by this payer/contractor. You must send
the claim to the correct payer/contractor

Reasons
 Patient is enrolled in Medicare advantage plan
 Claim is submitted to the insurance company that is not patient's primary insurance
 In case of secondary insurance primary EOB is required

Suggested Actions
 Review patient’s account / claims to see if the submitted information is correct
 Verify the patient’s eligibility for correct payer confirmation
 In case of MCR, submit the claim to Medicare advantage plan as primary insurance,
Medicare Eligibility provides Medicare Advantage Plan information, update and
resubmit the claim
 Check scanning, insurance information is received and may be missing
 Consult with provider for confirmation of insurance information
 If correct insurance information is not confirmed, bill to patient with the rejection type
16 - covered by another payer

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Example ERA (Electronic Remittance advice)

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CO204 - This service/equipment/drug is not covered under the
patient current benefit plan

Reasons
 The patient may not be eligible for benefits on the date of service
 Services denied because patient plan doesn’t support the services
 Performed service has been lapsed / removed from benefit plan and is no longer billable
 Multiple, simultaneous services are submitted to insurance

Suggested Actions
 Review patient’s account / claims to see if the submitted information is correct
 Check the NCCI edits to ensure that the procedure-modifier combination billed on the claim is
valid
 For inappropriate billed services get confirmation from the provider for rectification / correction
 Bundled or sub-component of services should be adjusted with the approval of provider
 Need to bill the patient if the services are not covered under patient plan

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Example

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Payment Adjusted for Absence of Pre-certification /
Authorization

Reasons
 Pre-certification/authorization is not submitted/missing
 The authorization has either insufficient or zero units remaining for the
service(s) billed.

Suggested Actions

 Please ensure that valid authorization is on file and submitted

 Contact provider to confirm if PA was obtained.

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Example ERA (Electronic Remittance advice)

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Payment denied /reduced for Absence of,
or Exceeded Referral

Reasons
 Referral# is missing
 Referral is not attached with claim form
 Submitted referral is not valid

Suggested Actions
 One should first review patient’s account/documents to see if the referral
was received, then resubmit the claim.
 In case of absence, contact provider to confirm if they have obtained one or
not, if the referral was never obtained, then the claim will not be paid by
carrier.

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Example ERA (Electronic Remittance advice)

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Non-covered Services - Pre-existing condition

Pre-existing condition: A medical condition diagnosed prior to the

effective date of the health plan
Reasons
 Pre-existing condition questionnaire is requested from provider
 Missing pre-existing condition information from patient

Suggested Actions
 Fill in the pre-existing condition questionnaire received from insurance
 Resubmit claim with medical notes as supported documentation
 If insurance has denied after review of submitted information, one may bill
patient with rejection type; 15- Pre-Existing Condition after provider consent.

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Example EOB (Explanation of Benefits)

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Payment is included in the allowance for another service/procedure

Reasons
 Service is not separately payable and is considered component of procedure(s) rendered
on the same date for the same patient by the same doctor
 The cost of care within the post-op period of a major/minor procedure is bundled into
the global surgery package

Suggested Actions
 If service(s) is component of other procedure/service performed on the same date, use
rejection type: 12 – Inclusive in other procedure and adjust it with adjustment reason
adjusted as bundled code.
 Contrary to above append modifier 59 and re-file claim.
 Evaluation and management (E/M) services related to the surgery, and conducted during
the post-op period should be adjusted. Rejection type: GF – Global Fee and adjustment
reason; adjusted as covered in Global Fee.
 Evaluation and management (E/M) services un-related to the surgery (DX code must be
different from surgery). Append modifier 24 and resubmit claim for processing.

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Example ERA (Electronic Remittance advice)

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Payment adjusted because `'New Patient' qualifications were not met

Reason

 New patient code is billed for an established patient

Suggested Action

 Submit the claims with established patient visit

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FAQs

 What are 5 key reasons for claim denial?

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FOLLOW UP

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Follow Up
 Accounts receivable or A/R is a term used to denote money owed to a practice
for the billed services. Payments due from patients and payers are considered
A/R.

 Insurance companies use stall tactics to delay payment and it is inevitable to

manage the A/R ensuring that the practices are getting paid correctly and in a
timely manner.

 An increase in A/R from one A/R bucket to next or higher is a sign that monies
are not being collected timely. Lack of follow up portends cash flow troubles
and causes client complaints.

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Insurance-wise Aging

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Follow Up Steps
 First step of follow up is to find out the reason why the claim is pending

 Check the current status of the claim through available resources i.e. web
portal, interactive voice response (IVR), fax or live call
Web Portal is an efficient source of follow up which is an online to find
out eligibility, benefits and claim status. It requires a user name and
password that is used to log in to the portal
Interactive voice response (IVR) is a technology that allows a computer
to interact with humans through the use of voice input via phone keypad.
It also facilitates to check eligibility and claim status

Live call should be last option to be used for follow up activity. However,
telephonic appeals and claim review require interaction with a live
representative
Fax option may be used to request status of a claim or to request a copy
of an EOB

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Follow-Up Strategy

Follow-up steps with hierarchy

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Paid Claim
 For a paid claim, if paid date is current then one should wait
for some time to receive ERA/EOB

 If paid date is older, then get the complete detail including

check/EFT number and post the payment according to
doctor office instructions

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Claim Processed with Patient Portion
 If claim is processed with any patient liability, then;
Bill to secondary payer (if exists)
Bill to patient in absence of secondary insurance plan.

Copyrights © 2020 MTBC. All rights reserved 48

Not On File
 If a claim is found “not on file”, it was submitted electronically
Check EMC# of submitted carrier is correct
Verify acceptance/rejection of claim
If it is rejected, fix the claim according to reason of rejection
On receipt of acceptance verify payer information and further
follow up with insurance referring to received acceptance.
 If it was a paper submission:
Verify mailing address of to see it was submitted on the correct
address
Look up in returned mail to find out the reason of returned claim
Lastly, resubmit only if you don’t find any evidence in the above
verification

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Denied

If claim is found to be denied, then perform analysis to determine:

The denial reason
The root cause of the denial
The impact of denial (payer level, account level and No. of
effected claims)
The Course of action to deal with the denial
Appropriate action on the effected claim(s)
Necessary action steps or define a procedure to avoid the
occurrence of the specific denial in future.

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FAQs

 What are the actions we can take to follow-up on

pending payment?

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APPEAL DRAFTING

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What is an Appeal

 An appeal is the action one can take if one disagrees with a

coverage or payment decision made by insurance.

 One has the right to appeal on a claim that is initially

submitted with incorrect information containing data-entry
error like wrong date of service or on inappropriately paid or
denied claims such as late filing, prior authorization and vice
versa for review and reprocessing.

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Appeal Drafting Guidelines
Identify and understand why the claim was denied:

 First find out if claim needs to be appealed. See denial reason(s) on

explanation of benefits (EOB) or electronic remittance advice (ERA) to
determine if this can be appealed

 If it is still not clear why the claim was denied, contact insurance company
and ask the reason of denial

 If it has been determined that an appeal has to be filed, then adopt the
appropriate method of appeal.

 Some denials may be requested for review based on a telephone

conversation.

 For some, a written appeal can be filed as per the appeal filing guidelines
accompanying supporting documentation in order for the claim to be
reconsidered for processing.

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Appeal Drafting Guidelines
Write to the insurance company, following their guidelines:

 An effective appeal is more than a letter demanding payment; it is an

argument supported by evidence

 Examine the insurance company’s reasoning for denial

 Make a list of the reason(s) that one disagrees with the insurance’s decision

 It is important to use appropriate appeal forms according to State and

insurance as some insurance plans require to use their own forms for appeals

 Begin appeal letter from salutation, then give the reference - patient, date of
service and the claim number.

 Describe the service for which payment was denied. Keep the focus on
writing the reason for review and possible reimbursements

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Appeal Drafting Guidelines
Incorporate evidence with right paperwork:

 To dispute a denial based on the necessity of a service or the need to provide

it as a distinct service, it should be accompanied by supportive references,
published reimbursement policies by an insurance, referrals, prescriptions
from the doctor and any relevant information such as medical history that
may help the claim get approved the second time around

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Appeal Drafting Guidelines

Appeal correspondence/submission:
 It is important to file/submit the appeal to right corresponding address.
Mostly payers have a designated address (physical and postal) for sending
appeals. This information may be included on the patient’s insurance
card. One can also communicate with the insurance to obtain the
correspondence details
 If there is no response from insurance in a reasonable time, the status of
initial appeal must be checked first before appealing on same claim
Follow up with the insurance company:
 Once an appeal is submitted, it’s important to follow up in 30 days by
calling the insurance as some insurance companies will allow claims to
suffer for months if no one follows up.
 Calls must be made at regular intervals if there is no reply from the
insurance company. If the company doesn’t receive an appeal, the appeal
should be faxed followed by confirming whether or not they have
received the fax.
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Appeal Drafting Guidelines

Stay organized by maintaining the logs:

 All the details of conversations with insurance, should be

documented

 Important points, such as name and the job title of the person
spoken to, date of conversation, call reference number, should
be noted down

 If an appeal was submitted, the “document control number”

should also be obtained

 This information will help to quickly access all the necessary

information for follow up call with insurance

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Example

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Appeal Forms

 Most of the payers accept the online appeals submitted through

their web portal. One can check online if the respective payer
accepts online appeals.

 One can also obtain appeal forms from web portal.

 One can also call at help line of the payer to find out appeal
process.

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PAYMENT TERMINOLOGY

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Capitation
 Capitation is a flat monthly fee that is paid to a provider by the
healthcare insurance at the start of each month for the delivery
of healthcare services to each patient on the capitation list
 Capitation list is a list of patients prepared by healthcare
insurance against which provider is paid the monthly capitation
 Not every patient has to be seen each month for the provider to
receive this fee
 Capitation payments are used by managed care organizations to
control health care costs
 The actual amount of money paid is determined by the ranges
of services that are provided, the number of patients involved,
and the period of time during which the services are provided

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Capitation Sample

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Capitation Posting

Copyrights © 2020 MTBC. All rights reserved 64

 Capitation: Claim Submission Response
 CO24 – Payment for charges adjusted. Charges are covered under a capitation
agreement/managed care plan.

Reasons
 Above denial is received when:
 Patient is enrolled in Medicare advantage plan or Medicaid manage care plan /
Service is covered by a managed care plan Provider is in capitation agreement
with insurance company and already been paid through a capitation agreement.
Suggested Action
 In case of Medicare and Medicaid, check eligibility information from real time or
through insurance website to obtain advantage or managed care plan information
Update Medicare advantage or managed care plan information and re-file claim
Check either your practice/provider is in capitation agreement with payer, if yes
adjust the claim with adjustment code 24, if no, generate call for reprocessing

Copyrights © 2020 MTBC. All rights reserved 65

 Overpayment

 If the sum of payment & adjustment gets greater than the

claim's charged or billed amount, it creates an
overpayment/adjustment in a claim. The over payment in
the claim is quoted as negative value and that claim is called
a negative balance claim or an overpaid claim.

 Types of an overpayment
Insurance overpayment
Patient overpayment
Human error

Copyrights © 2020 MTBC. All rights reserved 66

Insurance overpayment

In this scenario, insurance payment or adjustment in a

claim turns out to be more than the claim’s charged
amount due to one of the below reasons;

 Multiple submissions or multiple insurances processed

the claim as primary
 Processing error
 Duplicate claim entered

Copyrights © 2020 MTBC. All rights reserved 67

 Patient Overpayment

 When a patient paid more than their actual liability it will be an

overpaid claim at patient end.

 Reasons
Multiple payments from patient for same claim/date of
service.
Patient paid more than his/her responsibility.

Copyrights © 2020 MTBC. All rights reserved 68

Payment Terminology - FAQ
 What is Capitation?
 What is Capitation List?

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Thank You

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