D
Reimbursement

Denied Claim

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