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10 Most Common Reasons of Medical Billing Claims Rejection

There are multiple reasons your claim could be rejected. From claim preparation to the submission process, payment claims require expert scrubbing to make them perfect. The process is frustrating and you must eliminate all coding and processing errors as you file the claim. Almost 5% to 10% of claims are rejected due to errors and mistakes.

Fortunately, most denied medical bills can be avoided. To prevent this from happening, you should be aware of the most common mistakes.

To ensure you make no mistakes in your billings and can claim it without any problems we’ve made a list of the top 10 most common reasons medical billings claims get rejected.

1. Missing or Invalid Codes

One of the easiest and overlooked errors is typos or missed pieces of information. There are standard codes that are used to identify services and procedures called the Healthcare Common Procedure Coding System (HCPCS).

Important codes like Diagnostic code (ICD Codes) and Procedure code (CPT Codes) should be vetted carefully. If any of these are missing, invalid, incomplete or the diagnostic codes do not relate to the treatment provided, the claim will be rejected by the insurance company. For this reason, you should make sure you stay up-to-date and suitably use billing codes.

2. Delayed Filing

Payment claims must be submitted in a certain timeframe. Claims must be filed within a 60 to 90 days timeframe and submitting it late can create problems. It is important to notify the insurer and get authorization in time. Timely submission of the medical claims makes it easier to get approved and delays make it harder to settle.

So, make sure you’re always aware of the filing deadline or your claim will be denied.

3. Lost Claims 

Claims should be entered into the insurance company’s system to be processed correctly. No matter who loses the claim, once lost, the claims get difficult to follow-up and settle.

4. Duplicate Service 

Another reason claims are often rejected is because of duplicates. Insurance companies mostly have a strict one service per day policy. This means resubmission of a claim for the same service will be rejected. Whether the patient is authorized for 10 or 12 therapy sessions, if two are provided in one day, you won’t be paid for the second one.

Sometimes, a duplicate bill appears to be a second claim. These are exceptionally hard to work through and insurance providers usually reject bills when there’s a doubt.

5. Incorrect Patient Information

To ensure that the health insurance plan can identify the patient to make the payment accurately, correct patient information must be filed. The most common mistakes that people make are in spelling names, incorrect phone numbers, date of birth or that the subscribers’ group number is missing.

These small and common mistakes are one of the reasons your claim can get rejected.

6. Prior Authorization Required 

Most companies require prior authorization to ensure that only covered services and medical treatments have been provided to patients. For instance, radiology services, MRI or any other expensive service mostly require preauthorization.

If the healthcare provider provides services without proper authorization, their claim will be rejected.

Services will not be denied if the services are a medical emergency. In emergencies, providers can get the authorization later.

7. Billing the Wrong Company 

When billing, you must ensure the service dates and company address is correct. Often bills end up at the wrong place, and the patient might not have the same insurance anymore. Your claim will be rejected if the ICD and CPT codes are incomplete, invalid or missing.

Make sure all the addresses given to you by the providers are registered with the insurance company. A mistake on your bill and providing services at an unregistered location ends up with the claim rejection.

8. Provider Not Paneled with The Insurance Company

Sometimes people confuse the provider as their panel provider with the insurance company. If the insurance company has merged and has multiple panels or if the provider is for working for a larger clinic, it is common for the patient to get confused. The patient might think they’re a paneled provider when they’re still working under the same employer’s contract for the same insurance company.

Cases like these where the insurance plan is not paneled with the provider, are denied.

9. Patient Didn’t Acquire a Referral from A Physician 

Some insurance plans require you to get a referral from the primary care provider (PCP) before the services are carried out. If the healthcare services are provided without checking the referral, your claim will get rejected.


10. All authorized Sessions Have Been Used

One other error that commonly occurs, is when people don’t remember the number of appointments they were approved for and how many sessions they have. This causes problems and there’s a probability that you’ve run out of authorization sessions and the payment of service will not be paid by the insurance company. This way your claims are most likely to get rejected. There are various other reasons that a professional medical billing company can identify.

To avoid them from happening you should always look through your billing forms carefully or consider hiring a professional medical billing company.


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Written by FarooqKhan

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