Medical billing can be tricky. Even the slightest mistake can lead to claim denials, resulting in payment delays or lost revenue. If you work in healthcare billing, understanding common denials in medical billing is the first step to fixing them and preventing them in the future.
In this article, we’ll go over the most common reasons why claims get denied and share easy tips to avoid them. Let’s break it down in simple words.
Read this blog: What is Tier 1 and Tier 2 in Medical Billing?
What Are Claim Denials and What Are Common Denials in Medical Billing?
Claim denials happen when an insurance company refuses to pay for a medical service. There are many reasons for this. Some denials happen because of human error. Others happen due to missing information or problems with insurance coverage.
Not all denials are final—you can fix and resubmit them. But it takes time, effort, and money. That’s why it’s important to get it right the first time.
1. Missing or Incorrect Patient Information
This is one of the most common denials in medical billing. Simple errors like spelling the patient’s name wrong, entering the wrong date of birth, or missing the insurance ID can cause a denial.
How to avoid it:
Double-check all patient details before submitting the claim. Use automated software if possible to reduce human errors.
2. Invalid or Expired Insurance
If the patient’s insurance policy is no longer active, the claim will be denied. This often happens when patients forget to inform about insurance changes.
How to avoid it:
Always verify insurance coverage before the patient’s visit. Confirm that the policy is active and the service is covered.
3. Incorrect Coding
Using wrong or outdated codes is another big reason for denials. CPT, ICD-10, and HCPCS codes must match the service provided.
How to avoid it:
Stay updated with coding changes. Use coding tools and reference materials. Consider having certified medical coders on your team.
4. Lack of Medical Necessity
Sometimes, the insurance company denies a claim because they believe the treatment was not medically necessary. This usually happens when there is not enough documentation to support the claim.
How to avoid it:
Make sure the provider documents the reason for treatment clearly. Link diagnosis codes properly with the procedures.
5. Duplicate Claims
Submitting the same claim more than once by mistake can lead to denials. Insurance companies will flag them as duplicates.
How to avoid it:
Track your claims carefully. Don’t resubmit unless you are correcting a previous error or responding to a request.
6. Timely Filing Limit Exceeded
Each payer has a time limit for submitting claims. If you submit a claim after this window, it will be denied.
How to avoid it:
Know the filing deadlines for each insurance company. Submit claims as soon as possible after the service is provided.
7. Out-of-Network Provider
If the provider is not in the patient’s insurance network, the claim may be denied or paid at a lower rate.
How to avoid it:
Verify whether the provider is in-network before offering services. Inform patients about out-of-network costs in advance.
8. Coordination of Benefits (COB) Issues
If a patient has more than one insurance, and the order of payment is not clear, it can cause a denial.
How to avoid it:
Make sure patients provide all insurance details. Clarify which insurance is primary and secondary.
9. Pre-Authorization Not Obtained
Some services need prior approval from the insurance company. If you don’t get it, the claim may be denied.
How to avoid it:
Check the insurance plan to see if pre-authorization is required. Obtain written approval and keep it on file for the patient.
10. Service Not Covered
If the service is not part of the insurance plan, it won’t be paid.
How to avoid it:
Check the patient’s benefits and make sure the service is covered. If it’s not, inform the patient beforehand.
Why Denial Management Is Important
If you ignore denials, they pile up—and that’s lost money for your practice. But with good denial management, you can fix errors, resubmit claims, and improve your approval rate.
Here’s how:
- Keep a record of all denials
- Analyze trends to find repeated errors
- Train staff on updated policies and codes
- Use medical billing software for tracking and alerts
Conclusion – Common Denials in Medical Billing
Common denials in medical billing can slow down your revenue cycle, hurt your practice’s income, and frustrate your team. But the good news is—most of these denials are preventable. With proper checks, clear documentation, and updated knowledge, you can reduce errors and improve your claim success rate.
Remember: It’s not just about working harder; it’s about working smarter. The more you understand about why denials happen, the better you can stop them before they start.
FAQs
Q1: What are the most common denials in medical billing?
The most common denials include missing patient info, wrong codes, lack of pre-authorization, and filing after the deadline.
Q2: Can I resubmit a denied claim?
Yes, many denials can be fixed and resubmitted. Ensure that you correct the issue and follow payer rules.
Q3: How long do I have to file a medical claim?
It depends on the insurance provider. Some allow 90 days; others allow up to a year. Always check the payer’s policy.
Q4: What is a soft denial vs. a hard denial?
A soft denial can be corrected and resubmitted. A hard denial is final and cannot be changed.
Q5: How can I reduce medical billing denials?
Verify patient info, check insurance eligibility, get pre-authorization, use correct codes, and file claims on time.
