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What Can Cause a Claim To Be Denied?

QuestNS improves financial reporting for patients and healthcare providers
Read Time: 4 minutes
Dec 27, 2023

What Is a Claim Denial?

A claim denial is a term used when a health insurance company refuses to pay for any medical treatment that was provided. While it can be incredibly frustrating for a patient to get denied healthcare coverage, there may be some valid reasons an insurance company could not accept payment reimbursement. In some cases, a claim denial could change if you figure out the mistake or missing piece of information needed to refile a claim.

What Are the Common Reasons a Claim May Be Denied?

The carrier or insurance company may be unable to cover a form of medical care for many reasons, such as a patient not receiving a professional medical order from a certified provider, or perhaps the medical treatment simply isn’t included in the health insurance plan a patient signed up for. Here are the seven most common reasons a claim may be denied:

  • Coding mistakes
  • Lack of pre-approved authorization
  • Treatment not a medical necessity
  • Billing claim was filed late
  • Claim was expired or lost
  • The care you need isn’t covered in your plan
  • The provider you used was out of network

#1

Coding Mistakes

Sometimes claims denials could simply come down to incorrect coding. This is why having a system in place to accurately report medical billing is essential, as it can minimize claim denials and unnecessary costs for patients. If this is the reason your claim is denied, it could easily be corrected by resubmitting the claim with the correct codes. You should be careful not to allow coding mistakes to become a habit because it might trigger a fraud audit.

#2

No Pre-Approved Authorization

If you require hospitalization, surgery, medications, or other care for a health condition, you will need a certified medical professional to approve the treatment plan. If a patient seeks treatment on their own without medical approval, most insurance companies will not accept the charges.

#3

Criteria for Medical Necessity Weren’t Met

Sometimes a doctor may approve treatment, but then the insurance company will disagree with the approval and deem certain treatments unnecessary for some patients. Usually, these companies have a certain list of criteria that need to be met before an operation or treatment can be deemed medically necessary.

#4

Late Claim Filing

In some instances, timing may be the biggest factor for a claim being denied. Insurance companies will not pay for medical bills that were claimed too long after the treatment was provided. Typically, the window of time provided is 30 to 90 days.

#5

Lost or Expired Claim

Sometimes it isn’t a patient or medical provider’s fault for a claim being denied. Mistakes happen, and the insurance company may have simply lost a claim and only rediscovered it when it was too late. If this happens, a new claim will need to be made from a medical provider to ensure accurate payment.

#6

Insurance Plan Doesn’t Cover the Procedure

Some kinds of medical care may not be covered in an insurance plan. Patients and providers should always confirm with insurance providers that the care needed is covered before undergoing any major medical interventions to avoid out-of-pocket expenses.

#7

Out-Of-Network Healthcare Provider

If a patient uses a medical service or facility not included in their insurance plan, a claim could be denied due to it being out-of-network care. Patients should always confirm before receiving care if their provider is listed in the insurance company’s network.

What Should You Do if a Patient’s Claim Is Denied?

If your practice keeps having patients’ claims denied, you may require a more robust medical billing system to keep a set of checks and balances organized. This could include minimizing coding errors, ensuring timely billing, and adhering to compliance processes to ensure your patients aren’t overbilled and that your medical practice gets reimbursed correctly for the services provided.

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