Understanding the Importance of Authorization in Medical Billing
February 17, 2025
Email: info@prgmd.com | Call: +1 (630) 242-6474
Business hours: 9:00 to 5:00 | Monday to Friday
Email: info@prgmd.com | Call: +1 (630) 242-6474
Business hours: 9:00 to 5:00 | Monday to Friday
Denials of a healthcare insurance claim is one of the most irritating things a healthcare provider or a medical biller can experience. Common denial codes help with re-filing reimbursement claims – however, it takes time and effort. Therefore, getting your claims right the first time is highly important; it is always better to outsource to a medical billing services provider. Third-party billers are experts in handling billing and preventing denials, so you are safe.
While we talk about the common reasons for denied claims, these include:
Let’s take a look in detail at the common denial codes in 2024:
The denial code CO-15 corresponds to a claim that has a wrong authorization number for a procedure or a service.
You shall need prior approvals for proper coverage, especially for specific treatments or procedures. After getting this approval, you must enter the correct prior authorization number in block 23. This particular block is on the CMS-1500 form.
It is one of the common denial codes, and if the pre-authorization is not available, try and get retro authorization for the particular claim.
Additionally, CO-16 is another one of the common denial codes that a person comes across in healthcare billing. You might get CO-16 if you submit a claim with missing information or incorrect/misplaced modifiers. Some reasons for CO-16 denial include the following:
For navigating the CO-16 claims denial, as a provider/biller, you must heed any of the accompanying remark codes. Furthermore, these codes are specifically there to help you further define what information is missing from your claim so you can make changes accordingly.
The denial code CO-29 is another one of the common denial codes. It means that you sent a claim after the deadline for submission. Every health plan has a specific submission timeframe, so you must know your payor requirements.
In case you receive a denial code CO-29, you must:
Also, take proof of a timely filing for filing an appeal
Healthcare insurance plans do not cover every procedure that a patient might need. For such cases, payers mostly use the denial code CO-167 to reject claims that do not fall under their coverage.
For handling the common denial codes, especially the CO-167, you must:
Claim denials disrupt cash flow and create administrative troubles. Denials arise when insurance payers reject claims on account of errors, incomplete information, or non-compliance. Understanding common denial codes and reasons for denial of claims is a great step in taking care of these difficulties. There are two categories of denials: Hard Denials and Soft Denials.
Hard denials refer to claims that payers have permanently rejected, and there is no opportunity to resubmit. They can often result from services not covered under the plan, lack of pre-authorization, or passing filing deadlines. System-wide changes in billing will help to reduce hard denials. Utilizing professional medical billing services ensures payer compliance, thereby minimizing cases of hard denials.
Soft denials are those which are temporary and can be corrected and resubmitted once again. They are generally the results of either half of the information being sent, minor coding mistakes, or mismatches in patient eligibility. Unlike hard denials, one can get them resolved by producing more documentation or other corrections. On-time follow-up and trend analysis will reduce soft denials and improve claim acceptance rates.
As far as denials are concerned, the most efficient method is to prevent them from arising in the first place. For example, the preventive measures will include ensuring the eligibility of the patient, accurate coding, and filing of claims within the time limits. One can go into detail about those preventive measures.
Verifying a patient’s current insurance status and benefits for services required by that patient is vital. Verification should include policy numbers, coverage dates, and plan details with the payer to minimize denials due to ineligibility or policy expiration.
Coding errors are among the frequent reasons for denial. The use of standard coding systems such as ICD-10, CPT, and HCPCS will ensure accuracy in the reflection of diagnoses and services. In this way, timely, accurate coding will decrease rejects and can even make everything easier through the use of professional medical billing services.
Some procedures require pre-approval by insurers. Pre-authorization guarantees that the payer will accept the costs incurred for particular treatments. Most denials occur due to the lack of proper approvals; hence, it is very important to verify these approvals much earlier.
Incomplete documentation is one of the major reasons why an organization rejects a claim. Well-developed medical records highly support billed services, justification for clinical necessity, and effortless claim processing well-documented progress notes and treatment plans.
The claims must be filed within the deadlines allocated by the payers. Submissions beyond the deadlines are rejected as late submissions. Since every payer has specific filing requirements, efficient workflows, and tracking systems are used to ensure timely submission and denial reduction.
Correction of coding errors accounts for as much as 81% of claim denials. The best part is that the common medical billing denials are avoidable. With thorough vetting of data, collecting proper patient data, and even relying on the best software – your medical practice can efficiently practice that are experts in claims handling. At Physicians Revenue Group, Inc., we are experts at common denial codes and offer a range of claims-related services that can assist your practice in avoiding healthcare billing denials.
These types include:
The hard denials are irreversible, and more often than not result in written-off or lost revenue. Furthermore, the soft denials are temporary which can be potentially reversible if providers offer additional information, or correct the claims.
Share:
Categories
Recently Added
Understanding the Importance of Authorization in Medical Billing
How to Optimize Your Medical Billing Workflow?
Common Mistakes in Podiatry Medical Billing and How to Avoid Them
We Would Love to Assist You!
We treat your data confidentially and don’t share any information with a third party.