SSI claims reporting and management series part 2 of 3: What are the top five most common types of claim denials?

Eligibility related denials often result in a hard denial or one where you will not likely be paid and these include those related to coordination of benefits, plan coverage, incorrect plan code entry, maximum benefit exceeded, inactive coverage, or even member not found. These types of denials often stem from either the information not being obtained from the patient during preregistration or when they present at registration. These types of denials can even come from the fact that coverage changes during the patient’s hospital stay, especially if you have a patient whose hospital stay spans a month end. Obviously, the most effective way to prevent these types of denials is to make sure information is gathered from the patient up front, but even this won’t prevent all eligibility denials. So, in addition, running eligibility checking again before billing the claim is another option along with utilizing a coverage discovery tool that will go out and look for active coverage on a patient. Ultimately, when it comes to eligibility related denials, it is worth the effort to deploy any and all strategies you can to prevent or lessen the occurrence of these types of denials.

Missing or invalid claims data denials are generally considered soft denials meaning you can usually fix the claim and resubmitted it for payment. These types of denials occur when the data submitted does not pass the payer’s adjudication edits and means there may be key data missing. Also, if you’re billing secondary claims it may mean there was missing or invalid data in the remittance advice information submitted on that claim. In most cases, these types of denials can be prevented by having a robust edits library as part of your billing or claims management software to prevent claims from being submitted with missing or invalid data. Alternatively, you may be able to utilize your host system, such as those included as part of your electronic health record software, to manage and correct potential missing or invalid data so there’s no need for additional intervention required before the claim is submitted. These types of claims related denials are important to resource appropriately so they do not end up resulting in a hard denials and thereby loss of revenue for the organization.

Authorization related denials, in most cases, end up being hard denials and you will not be able to fix them nor will you be able to recover any payment on these claims. This is especially true when a required authorization was not obtained prior to service or an invalid authorization number was included on the claim. Sometimes you may have in fact received prior authorization, but the claim was still denied. For example, this can happen when there’s an eligibility issue such as the patient’s coverage changed or expired after receiving the authorization, but before it was used. And payers often have time limits or expiration dates associated with authorization numbers and if not used within their specified timeframe, you will also receive a denial.

In cases where you receive notice of services exceed authorization, you may actually be able to appeal these claims and recover the denied amount. However, for these denials, it is highly dependent upon having the appropriate documentation as to why the services exceeded authorization and being able to prove why the provided services were necessary.

Non-covered service denials are almost always hard denials, meaning it’s highly unlikely you will be able to recover any dollars associated with these claims. When these types of denials occur it’s often because the provided service simply was not covered by the payer’s plan. You can also get this type of denial when a patient stay goes over the maximum number of allowed days for a particular service. In addition, a non-covered service denial could also be associated with restrictions pertaining to a managed care plan that were not adhered to. Although you may be able to provide documentation via an appeal for these types of claims, more often than not, these claims will not be able to be recovered.

Missing documentation denials are generally soft denials and you will mostly likely be able to fix what’s missing and resubmit the claim. Just as the description states, these types of denials are missing documentation, either the requested documentation was not originally provided or it was provided, but not received and in this case it’s often referred to as a technical denial. Sometimes the documentation was simply not provided in the timeframe required by the payer. In other cases, inadequate or insufficient information was received and therefore the claim was denied, but it might be possible to appeal these claims by resubmitting additional information as needed by payer. Another type of missing documentation denial is one where documentation provided does not substantiate the service. You still might be able to appeal these claims if you can provide the documentation necessary to prove why the service was necessary and did need to be performed. In all cases of missing documentation denials, if you plan to try and fix what’s missing, you must be sure to provide any necessary additional documentation in a timely manner per each payer’s guidelines. Having a solid clinical documentation improvement (CDI) system will also help you prevent these types of denials.