Module 02

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DENIAL MANAGEMENT
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DENIAL MANAGEMENT
Denial Management
 Denial is refusal/rejection of something requested, needed

or claimed.
 In medical billing, denial is a refusal of an insurance
company to pay for health care service(s) rendered by a
health care professional.
 Denial management refers to, taking corrective action and
preventive measures are established to avoid future
occurrence.
CO16 – Claim/service lacks information which is needed for adjudication.
Reasons
 The CO16 remark code is an alert regarding missing or incomplete information that is required in
order to process the claim.
 Drug name and dosage may be missing
 Additional information is required for benefit determination
 Office notes/clinical documentation requested for claim consideration
 Referring/rendering physician information may be missing
 More specific/corrected billing/coding is required
 Missing appropriate modifier, diagnosis or procedure
 Insurance need information from patient for claim processing
Suggested Action(s)
 See the explanation of additional remark code(s) on the ERA under the code 16 for further
information that what type of information is requested for claim processing.
 If the additional remark code(s) is not provided, one should call insurance to get the
information needed to resubmit the claim
 Provide/attach/append/rectify claim information accordingly and re-file claim
Example ERA (Electronic Remittance Advice)
CO18 – Duplicate Claim/Service

Reasons
The charges submitted to insurance for processing have already been considered. This denial informs
the duplicate billing, previously considered for the patient.
Reason that may cause duplicate claim are;

 If more than one claim is submitted for the same health care procedure, for the same date of
service, the subsequent claim(s) will be denied as duplicate claim
 Service denied because payment already made for same/similar procedure within set time frame
 The service was billed twice but performed only once
 The service was performed more than once by the same provider, or group of providers, on the
same day
 The service was performed by another provider, and payment has already been made to that
provider
 The claim was re-submitted noticing no response from insurance or without corrected claim
indicator
Suggested Action(s)
 Never simply resubmit a denied claim citing the reason, duplicate claim; because it will just get
denied again with same reason
 Before resubmitting a claim, check claim status for previous submission to see original denial
 Fix the claim and resubmit with the correct information or appeal the original decision with
additional information
 Ensure appropriate modifiers are appended to claim lines if applicable, and resubmit the claim
 Make sure to apply “corrected claim” indicator while resubmitting a modified/corrected claim
CO4 - The procedure code is inconsistent with the modifier used

or a required modifier is missing
Reasons:
 Procedure code and modifier mismatch
 The reported modifier is not appropriate to describe the performed services
 Insurance requires additional information (Modifier) to process the claim
Suggested actions:
 One should review patient’s account/claims to see if the submitted information is correct
 Determine (from CCI edit/coding team) which of the modifier is actually describing the performed
services
 Ensure necessary, appropriate modifiers are appended in the claim
 Resubmit the claim with appropriate modifier
CO22 - Payment adjusted because this care may be

covered by another payer per coordination of benefits
Coordination of benefits (COB): When a patient is covered by more than one

insurance plans, then patient has to determine which insurance plan has the primary
payment responsibility and which plan will act as secondary.
Reasons
 Patient has other insurance which covers the services as primary payer
 Patient has not updated the COB information
 Missing primary insurance EOB/payment information
Suggested Actions
 Verify plan’s eligibility and consult COB section to confirm primary insurance
 Ensure that the correct primary insurance for the patient has been billed
 In case of missing primary payment information, talk to EDI/submission team to
make sure it was sent in/with respective segment-loop/HCFA form or resubmit with
primary EOB
 If COB information is not updated by the patient, then bill the patient with rejection
type: 19 - Insurance needs COB information from patient.
10
11
CO119 - Benefit maximum for this time period has been

reached
Lifetime Maximum: An insurance contract with the patient, which bounds

the amount that can be paid in the policy period, each insurance policy has a
lifetime maximum.
Reasons
 Patient’s annual benefits for the services billed has been exhausted
 Maximum benefits crossed for a specified service
 Insurance has paid the maximum amount according to aggregate limit and
cannot pay more amount
Suggested Action
 One should review patient’s account/claims to see if the submitted
information is correct
 Bill to patient
12
13
CO50 - These are non-covered services because this is not deemed

a medical necessity by the payer
Reasons
 The insurance company has doubts about the patient’s medical history or current
condition and they need more information for claim processing
 The performed services doesn’t appear to be medically necessary for the patient
 The diagnosis code may be insufficient to support medical necessity according to billing
guidelines
 The procedure code(s) billed is incompatible with the diagnosis code(s)
 Appropriate modifier or documentation is missing on the claim
Suggested Actions
 One should check that the diagnosis and procedures are appropriate according to NCCI
edits
 Consult Coding Team and provide/attach/append claim information according to their
feedback and re-file claim
 If the insurance just needs medical notes, the office should be requested to provide
medical notes for resubmission with the correspondence
22
Example ERA (Electronic Remittance advice)
23
CO31 - Claim denied as patient cannot be identified as

our insured
Reasons
 Subscriber or patient's name is spelled incorrectly
 Subscriber or patient's date of birth on the claim doesn't match the date of birth in
the health insurance plan's system
 Subscriber/policy number is incomplete or invalid
 Subscriber’s group number is missing or invalid
Suggested Actions
 Verify if the claim is submitted to correct payer
 Check patient’s eligibility through real time or obtain through insurance website to
make sure information submitted is correct and there is no mismatch
 Is case of any conflict, correct the information and resubmit claim
 If all seems correct, one should generate call for insurance to review the claim
24
Example ERA (Electronic Remittance advice)
25
CO252 - An attachment/other documentation is required to adjudicate

this claim/service
Reasons
 Insurance requires medical notes or any other documentation which is necessary
to process the claim
 Insurance need Primary insurance’s explanation of benefits for claim processing
Suggested Actions
 One should review patient’s account/claims to see if the submitted information is correct
 To further clarify which information is required, insurance call can be helpful
 Attach/provide requested information/documentation and resubmit the claim
26
Example
27
CO109 - Claim not covered by this payer/contractor. You must send

the claim to the correct payer/contractor
Reasons
 Patient is enrolled in Medicare advantage plan
 Claim is submitted to the insurance company that is not patient's primary insurance
 In case of secondary insurance primary EOB is required
Suggested Actions
 Review patient’s account / claims to see if the submitted information is correct
 Verify the patient’s eligibility for correct payer confirmation
 In case of MCR, submit the claim to Medicare advantage plan as primary insurance,
Medicare Eligibility provides Medicare Advantage Plan information, update and
resubmit the claim
 Check scanning, insurance information is received and may be missing
 Consult with provider for confirmation of insurance information
 If correct insurance information is not confirmed, bill to patient with the rejection type
16 - covered by another payer
28
What is an Appeal
 An appeal is the action one can take if one disagrees with a

coverage or payment decision made by insurance.
 One has the right to appeal on a claim that is initially

submitted with incorrect information containing data-entry
error like wrong date of service or on inappropriately paid or
denied claims such as late filing, prior authorization and vice
versa for review and reprocessing.
53
Appeal Drafting Guidelines

Identify and understand why the claim was denied:
 First find out if claim needs to be appealed. See denial reason(s) on

explanation of benefits (EOB) or electronic remittance advice (ERA) to
determine if this can be appealed
 If it is still not clear why the claim was denied, contact insurance company
and ask the reason of denial
 If it has been determined that an appeal has to be filed, then adopt the
appropriate method of appeal.
 Some denials may be requested for review based on a telephone

conversation.
 For some, a written appeal can be filed as per the appeal filing guidelines
accompanying supporting documentation in order for the claim to be
reconsidered for processing.
54
Write to the insurance company, following their guidelines:
 An effective appeal is more than a letter demanding payment; it is an

argument supported by evidence
 Examine the insurance company’s reasoning for denial
 Make a list of the reason(s) that one disagrees with the insurance’s decision
 It is important to use appropriate appeal forms according to State and

insurance as some insurance plans require to use their own forms for appeals
 Begin appeal letter from salutation, then give the reference - patient, date of
service and the claim number.
 Describe the service for which payment was denied. Keep the focus on
writing the reason for review and possible reimbursements
55
Incorporate evidence with right paperwork:
 To dispute a denial based on the necessity of a service or the need to provide

it as a distinct service, it should be accompanied by supportive references,
published reimbursement policies by an insurance, referrals, prescriptions
from the doctor and any relevant information such as medical history that
may help the claim get approved the second time around
56
Appeal correspondence/submission:
 It is important to file/submit the appeal to right corresponding address.
Mostly payers have a designated address (physical and postal) for sending
appeals. This information may be included on the patient’s insurance
card. One can also communicate with the insurance to obtain the
correspondence details
 If there is no response from insurance in a reasonable time, the status of
initial appeal must be checked first before appealing on same claim
Follow up with the insurance company:
 Once an appeal is submitted, it’s important to follow up in 30 days by
calling the insurance as some insurance companies will allow claims to
suffer for months if no one follows up.
 Calls must be made at regular intervals if there is no reply from the
insurance company. If the company doesn’t receive an appeal, the appeal
should be faxed followed by confirming whether or not they have
received the fax.
57
Stay organized by maintaining the logs:
 All the details of conversations with insurance, should be

documented
 Important points, such as name and the job title of the person
spoken to, date of conversation, call reference number, should
be noted down
 If an appeal was submitted, the “document control number”

should also be obtained
 This information will help to quickly access all the necessary

information for follow up call with insurance
58
Example
59
Capitation: Claim Submission Response
 CO24 – Payment for charges adjusted. Charges are covered under a capitation
agreement/managed care plan.
Reasons
 Above denial is received when:
 Patient is enrolled in Medicare advantage plan or Medicaid manage care plan /
Service is covered by a managed care plan Provider is in capitation agreement
with insurance company and already been paid through a capitation agreement.
Suggested Action
 In case of Medicare and Medicaid, check eligibility information from real time or
through insurance website to obtain advantage or managed care plan information
Update Medicare advantage or managed care plan information and re-file claim
Check either your practice/provider is in capitation agreement with payer, if yes
adjust the claim with adjustment code 24, if no, generate call for reprocessing
Copyrights © 2020 MTBC. All rights reserved 65
Overpayment
 If the sum of payment & adjustment gets greater than the

claim's charged or billed amount, it creates an
overpayment/adjustment in a claim. The over payment in
the claim is quoted as negative value and that claim is called
a negative balance claim or an overpaid claim.
 Types of an overpayment
Insurance overpayment
Patient overpayment
Human error
Insurance overpayment
In this scenario, insurance payment or adjustment in a

claim turns out to be more than the claim’s charged
amount due to one of the below reasons;
 Multiple submissions or multiple insurances processed

the claim as primary
 Processing error
 Duplicate claim entered
Patient Overpayment
 When a patient paid more than their actual liability it will be an

overpaid claim at patient end.
 Reasons
Multiple payments from patient for same claim/date of

service.
Patient paid more than his/her responsibility.
Payment Terminology - FAQ

 What is Capitation?
 What is Capitation List?
69
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70 of 70    Search document 

AD Download to read ad-free.

AD Download to read ad-free.

 Denial is refusal/rejection of something requested, needed

AD Download to read ad-free.

CO16 – Claim/service lacks information which is needed for adjudication.

 Drug name and dosage may be missing

 Additional information is required for benefit determination

 Office notes/clinical documentation requested for claim consideration

 Referring/rendering physician information may be missing

 More specific/corrected billing/coding is required

 Missing appropriate modifier, diagnosis or procedure

 Insurance need information from patient for claim processing

AD Download to read ad-free.

Example ERA (Electronic Remittance Advice)

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CO18 – Duplicate Claim/Service

Reason that may cause duplicate claim are;

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Example ERA (Electronic Remittance Advice)

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CO4 - The procedure code is inconsistent with the modifier used

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Example ERA (Electronic Remittance Advice)

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CO22 - Payment adjusted because this care may be

Coordination of benefits (COB): When a patient is covered by more than one

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Example ERA (Electronic Remittance Advice)

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CO119 - Benefit maximum for this time period has been

Lifetime Maximum: An insurance contract with the patient, which bounds

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Example ERA (Electronic Remittance Advice)

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AD Download to read ad-free.

AD Download to read ad-free.

AD Download to read ad-free.

AD Download to read ad-free.

AD Download to read ad-free.

AD Download to read ad-free.

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CO50 - These are non-covered services because this is not deemed

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Example ERA (Electronic Remittance advice)

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CO31 - Claim denied as patient cannot be identified as

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Example ERA (Electronic Remittance advice)

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CO252 - An attachment/other documentation is required to adjudicate

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CO109 - Claim not covered by this payer/contractor. You must send

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