Denials Part 1

Something all medical billers deal with is denials.  You can do your best to post charges correctly, make sure all the proper modifiers and diagnosis codes are in place so you can send nothing but clean claims, but unfortunately denials are still inevitable.  Although most of you medical billers out there are most likely extremely familiar with different kinds of denials, I think it would still be beneficial for you and for medical billing students to review the basics.  This will be part one of a series of posts about denials and how deal with them. 

I thought I'd start with Medicare denials which can be more complex as Medicare has Claim Adjustment Reason Codes as well as Remittance Advice Remark Codes.

Claim Adjustment Reason Codes - Communicate why a claim or line item was denied.

Remittance Advice Remark Codes - Provide an additional explanation.

The image below shows an example of a Medicare explanation of benefits. I have circled where you can find these denial codes.  Of course the location of these codes on the page may vary depending on the layout you are using in your office.

Some of the more common Claim Adjustment Codes I work with are:

24 - Charges are covered under a capitation agreement/managed care plan. This is one I see a lot ever since Medicare Advantage plans started popping up everywhere.  If you see this code it means that you should not be billing Medicare directly.  The patient has a Medicare HMO plan through a different insurance company.  Check with the patient to find out which insurance it is so you can bill that insurance directly.  Sometimes patients get confused and present the insurance card as their secondary plan.  If this is the case be sure to explain to the patient that it is not secondary, it takes the place of Medicare.

29 - The time limit for filing has expired. The claim was submitted too late and will not be paid unless you submit proof of timely filing from your computer system or clearinghouse.

27 - Expenses incurred after coverage terminated. Coverage is no longer in effect.  Call the patient to get current coverage information, or if you don't have time or cannot get a hold of the patient, send them a bill.

97 - The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated. This means the service took place during a global period (within a certain number of days after a procedure). Look at the diagnosis code used. Is it the same diagnosis used in the original claim?  If not, a global modifier needs to be added.  A modifier 24 for an office visit or a modifier 79 for any other procedure will tell them this claim has nothing to do with the previous claim.  If so, this should have been considered a no charge post-op visit, unless the doctor can provide you with a different diagnosis also discussed during the visit.

50 - These are non-covered services because this is not deemed a 'medical necessity' by the payer. Medicare can be very picky about what diagnosis codes can and cannot be billed with certain procedure codes.  If you receive a medical necessity denial you need to look at the LCD (Local Coverage Determinations) list to find which diagnosis codes are accepted. Then ask the doctor to choose one of those codes if applicable.  You can find LCD lists on the CMS.gov website or just click here.

140 - Patient/Insured health identification number and name do not match. There is a problem with the way the patient's name is spelled in your computer system.  Check the patient's Medicare card.  Every part of the name has to match including the middle initial.  If one little thing is off, Medicare will automatically deny the claim. Sometimes if I can't figure it out I will play around with the patient's name and date of birth combination on the Endeavor website until I "crack the code" and it shows me the name the way they have it spelled.

31- Patient cannot be identified as our insured. This means the Medicare ID number is entered incorrectly.  If you have verified the number with the patient's Medicare card and double checked it with the patient's social security number (if the patient provided you with one), then chances are the problem lies with the letter at the end of the ID number.  These letters can sometimes change. I will usually go to the Endeavor website and play around with it, changing the letter from an A to a T or a D until eventually when I get it right the website will allow me to view the patient's eligibility information.  If this doesn't work, try calling the patient to ask if they know if the letter in their ID number has changed. Denials can be a pain, but knowing what they mean is half the battle.  Do you have any additional tips or denial codes you think should be included on this list?  Please add a comment!  I always welcome suggestions and feedback.