Every time medical claims get denied, payment is delayed and your staff has extra work to do. The good news: most denials come from a handful of causes, and most can be prevented before the claim is ever sent.
Here are the seven most common reasons claims are denied, what to do about each one, and the steps to take when a denial does happen.
Denied vs. Rejected Claims: What Is the Difference?
A rejected claim has errors, such as a missing field or wrong ID, that stop it from being processed. It is usually fixed and resubmitted quickly. A denied claim was processed and the payer refused to pay, so it must be corrected, resubmitted or appealed. This article is about denials.
1. Eligibility not verified
If coverage has lapsed or changed, the payer will deny the claim. Fix: verify insurance eligibility and benefits before every visit, not just the first one.
2. Incorrect or missing patient information
A misspelled name, wrong date of birth or incorrect policy number is enough for a denial. Fix: confirm demographics and insurance details at check-in and compare them with the insurance card.
3. Coding errors
Wrong CPT or ICD-10 codes, missing modifiers, or codes that do not match the documentation lead to denials and audit risk. Fix: use trained coders and review claims against the clinical notes before submission. See our medical coding services.
4. No prior authorization or referral
Many procedures and specialist visits require approval first. Fix: keep a checklist of payer authorization requirements and confirm before scheduling.
5. Missed timely filing deadlines
Each payer sets its own filing and appeal windows, and a missed deadline usually cannot be recovered. Fix: submit claims promptly and track every payer’s deadlines.
6. Medical necessity not supported
If the documentation does not show why a service was needed, the payer may deny it. Fix: make sure notes clearly support the diagnosis and the services billed.
7. Denials that are never worked
Many denials are simply written off because no one has time to follow up. Fix: work every denial, track the reason, and use the pattern to correct the process behind it. Our denial management services do exactly this.
What to Do When a Claim Is Denied
- Read the remittance advice (ERA/EOB) and note the denial reason.
- Check the payer’s filing and appeal deadline right away.
- Correct the error and resubmit, or file an appeal with supporting documents.
- Track the claim until it is paid.
- Record the cause and fix the process so it does not repeat.
When handling claims, remember that patient information must be protected under HIPAA, including when you share records with payers or your billing partner.
How ClearPath Can Help
ClearPath Medical Billing handles billing, coding and denial follow-up for US healthcare practices, so your team can focus on patients. We are HIPAA compliant, our team is HIPAA trained, and medical billing starts from 3.5% of collections.
