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Most common reasons for claim denials and how to avoid them

Most common reasons for claim denials and how to avoid them

When a patient’s insurance claim is denied, not only can your cash flow be affected, the relationship with your patient can be damaged as well. Some claim denials can be successfully appealed, but even when appeals succeed, they can temporarily leave claim status up in the air – something both your practice and your patient would like to avoid.

Understanding common reasons for claim denials is key to preventing them. The insurers your practice works with may offer software tools to help you prevent claim rejections (which are claims that aren’t processed due to clerical errors) and claim denials (where claims are considered, but payment is denied) so it’s important that you are aware of these tools and utilize them. Here are the top 5 reasons why claims are denied, and how you can avoid these situations.

Insurance claim denials can become a grave concern if you do not take corrective steps at the earliest. Every denial or rejection will not only impact your revenue cycle severely but also strain your relationship with the patient. Well, this makes it imperative to avoid landing up in such a situation.

Claim Form Errors: Incorrect/Missing information

One of the most common mistakes that can result in a claim rejection or denial. A claim rejection is when it is rejected for some clerical errors but the payment is not denied. Entering an incorrect procedure code or diagnosis, wrong billing information is some of the usual errors that can lead to a claim denial, which means the Insurer will not make the payment.

Claim Submission Deadlines

Different insurers impose different deadlines for claims submissions, and they have different policies about what you can do when you miss a deadline. In some cases, you can clear things up with a phone call, but in others you may have to fill out more paperwork.


Changes in the Insurer networks or insurance plans can place your practice out-of-network and your patient can remain oblivious of this change. Before verifying these important details if you carry out a procedure, and it turns out to be an out-of-network case, the insurer will deny the payment. In such a scenario either you will have to bear the entire cost of treatment or the patient will. Both scenarios can be detrimental.

How to avoid these errors?

  • Verify and cross-verify the patients’ records, details, and all insurance and eligibility-related information before filing any claim. You can use supporting documents wherever required as a source of verification of data. You must engage knowledgeable certified coders and billers to assign accurate procedure codes and other billing information
  • Set up processes that can notify you on important deadlines, claim submission, claim statuses follow-up, and essential claim requirements. Such a system can inform you in advance about the upcoming claim submission deadlines and claim requisites such as pre-authorization approvals
  • Determine the sufficiency of the medical necessity through an open communication platform with the insurer, patient, billing staff, and fellow clinicians. This is important for all the parties involved to take an informed and practical decision
  • Assess your status in the network in regular interval. You must access and ascertain this information as soon as you come in contact with the patient seeking treatment. You can duly inform the patient if you are out-of-network and enumerate the benefits he may still receive from you

Are You Ready to Get Billing from Best Medical Billing Company?

Want to hire an experts in Medical billing and coding for your Practice? You are at the right place, what you need now is a partner who can finish out the rest of the work and make the technology and implementation just as simple. That’s what the best medical billing company like Medisys Data Solutions Inc. can do. If you’re ready to get started, schedule a meeting with our Medical Billing Manager from filling out enquiry form from our website!

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