How Many Types of Rejections in Medical Billing?

Table Of Contents

Understanding insurance claim rejections
Medical billing rejection codes explanation
Difference between claim rejection and denial
Classification of denials and rejections
Medical billing errors leading to rejections
Preventing medical billing claim rejections
FAQs

Do you know what makes billing challenging and concerning? Medical billing becomes difficult due to rejection and denials faced by the insurance company which is one of the most fearful components in medical billing and coding.

According to statistical data, about 60% of healthcare providers face rejections of their claims by the insurance company which shows rejection is one of the highly concerning issues among healthcare providers, billing companies, and hospitals that can be challenging for them to offer efficient and accurate services. EmdeonMD is here to help out regarding billing solutions for rejected and denied claims, for details have a look at our website Emdeon MD for accurate and validated billing solutions.

Understanding insurance claim rejections

Understanding insurance claim rejections is important to know the cause behind the rejection or denial. Insurance claims get rejected by the insurance company if the claim does not comply with the insurance company’s guidelines. Proper understanding of rejections includes identification of the type of rejection and the cause behind it for proper mitigation in which the medical coder is the main individual who needs to be considerate of the coding procedure acting as the base of efficient coding offered by a billing and coding company.

Medical billing rejection codes explanation

How to find out whether the insurance claim is accepted or rejected? If rejected then how we can find out about the specific rejection cause? Here are medical billing rejection codes explained in the proper way they are defined as the medical codes that are universally used for insurance claim rejection indicated by the insurance company. It includes alphanumeric codes that are specific for certain rejections, denoted by CO with numbers that depict specific types of rejection, here is a list of some common rejection codes being practiced by the insurance companies such as:

CO-4 ( missing modifier )
CO-11 (coding error in diagnostic code)
CO-15 ( missed or invalid authorization number)
CO-16 (lack of information )
CO-18 ( duplicate claim or service )
CO-22 (coordination of benefits error )
CO-27 (Expiry of coverage or insurance plan)
CO29 ( time limit expired)
CO-45 ( excessive charges)
CO-50 ( unnecessary medical service)

Difference between claim rejection and denial

There are usually two types of challenges being faced by the insurance claims named as rejection and the other is named as denial, both can be confusing but both are different terminologies. A major difference between claim rejection and denial is that rejection is defined as eros or missed information written in a claim that leads to rejection by the insurance company to the billing and coding company for correction and resubmission. While denial means the claim doesn’t comply with the payer guidelines for payment. Claim rejection vs. denial in healthcare is considered different terms having different causes and solutions that lead to differentiated approaches in the billing and coding industry.

Classification of denials and rejections

Denial and rejections are further classified into different types for a better understanding and severity of challenges in billing and coding. Here is a detailed explanation of rejection types along with denial categories :

Types of claim rejections in medical billing

Types of claim rejections in medical billing cover missing information, incorrect information, coding errors, prior authorization issues, refusal issues, duplication of claims, invalid payer information, eligibility issues of the candidate, and billing and service date errors, are some commonly addressed rejections types

Medical billing denial categories

Medical billing denial categories cover administrative denials, clinical denials, policy denials, and technical denials. These are broad and extended categories covering all aspects of the specific type of medical billing denial being commonly faced by the billers during the billing procedure. This type is more concerned and related to the billers rather than the medical coders as they are concerned with medical claims rejection issues. The most common and highly addressed ones are missed or incorrect modifiers, incorrect procedure codes along mismatched codes are often encountered by the biller from the insurance company, covered under the technical category.

Medical billing errors leading to rejections

Medical billing errors leading to rejections are the causes that are usually covered under the different types of rejection and denials acting as the leading cause of rejection of insurance claims that affect the overall services of billing and coding companies, health care providers, and others. This leads to the resubmission of claims for reimbursement of the payment to the physician or other healthcare provider, which leads to a waste of time, and financial resources affecting multiple individuals at once. The top reasons for claim rejections in medical billing cover incorrect information of patients including misplaced names, invalid insurance, or incorrect date being written on the claim. Use of outdated and invalid CPT, ICD codes, or incorrect pairing of diagnosis and procedure codes leads to major complications. Unable to produce the required medical records or other required documents on time leads to claim rejection by the insurance company. Multiple submissions of claims for one patient may cause rejection of the claim that is majorly caused by inaccurate records and documentation of claims. The addition of incorrect payer information such as incorrect payer ID or other information, about an expired insurance plan of the individual, leads to the rejection of claims along with incorrect placement of billing services and billing dates can be a leading cause of medical claim rejection.

These common medical billing rejection reasons are the root cause of rejection of claims that require proper consideration and attention on the billing and coding procedure being followed by the biller and coder to avoid this minor or major complication.

Preventing medical billing claim rejections

Preventing medical billing claim rejections requires proper attention, and advanced and updated strategies complying with the regulatory guidelines for the provision of accurate and validated billing and coding services. Training and education of the staff about updated guidelines, automated software with notifications altering mistakes, an expert giving details about billing and coding that is latest and updated, along with rechecking of claims can avoid these complications.

Emdeon MD could be the right decision for your billing solutions if you are looking for foolproof, transparent, efficient service, can have a professional experience by having a free consultation with our professional team members on our website named EmdeonMD, can email us through info@emdeonmdllc.com or reach us out at 307 459 0875.

FAQs

What is the difference between a claim rejection and a claim denial?

A claim rejection occurs when an insurance company returns a claim before processing due to errors or missing information, such as incorrect patient details or invalid codes. In contrast, a claim denial happens when a claim is processed but not paid because it doesn’t meet the payer’s guidelines, often due to services not being covered, lack of prior authorization, or coding errors.

What are some common reasons for medical claim rejections?

Common reasons for claim rejections include:
Missing or incorrect patient information: Errors in patient details like name, date of birth, or insurance information.
Invalid or outdated codes: Use of incorrect or outdated ICD-10 or CPT codes.
Lack of prior authorization: Services requiring authorization that were not obtained.
Duplicate claims: Multiple submissions for the same service.
Eligibility issues: Patient’s insurance coverage status at the time of service.
Incorrect billing dates: Errors in service dates or billing periods.

How can healthcare providers prevent claim rejections and denials?

To minimize claim rejections and denials, healthcare providers should:
Verify patient information: Ensure all patient details are accurate and up-to-date.
Use correct and updated codes: Apply the most current ICD-10 and CPT codes that accurately reflect the services provided.
Obtain necessary authorizations: Secure prior authorizations for services that require them.
Maintain complete documentation: Ensure all required medical records and documentation are complete and submitted with the claim.
Implement regular training: Provide ongoing training for billing and coding staff to keep them informed about the latest guidelines and best practices.

What steps should be taken when a claim is rejected or denied?

When a claim is rejected or denied, follow these steps:
Review the explanation: Examine the rejection or denial notice to understand the reason.
Correct errors: Address any identified issues, such as incorrect information or missing documentation.
Resubmit the claim: After making the necessary corrections, resubmit the claim to the insurance company.
Appeal if necessary: If the claim is denied, consider appealing the decision by providing additional information or clarification.
Document the process: Keep detailed records of all communications and actions taken regarding the claim.