D
Definition
A claim for payment that the payer (Broker or Insurance) refuses to reimburse due to errors, lack of authorization, or coverage issues.
Overview
Why it Matters
Denials directly impact cash flow. A 10% denial rate can wipe out a provider's entire profit margin.
How it Works
The payer sends back an "835 Remittance Advice" file with a code explaining the denial (e.g., "CO-16: Claim/Service lacks information").
Code Comparison
Comparison: Denied vs. Rejected
Rejected: The door was slammed shut at the entrance (format error). Denied: The claim got in, was reviewed, and then refused (policy/eligibility error).
Common Questions
- Unauthorized: Performing a trip without a valid Prior Authorization number (PA) on the claim.
- Timely Filing: Submitting the claim 91 days after the trip when the contract limit is 90 days.
- Work your "Denial Bucket" weekly. Most denials can be corrected and resubmitted.
- Track top denial reasons (e.g., "Invalid Member ID") to identify training needs.
Sources
CMS.gov - Medicare Claims Processing Manual