Top Outpatient Denial Reason Codes

January 2010 J1 Part A Medical Review Top Denial Reason Codes


1.  No Documentation of Medical Necessity
Reason for Denial
This claim was fully or partially denied because the documentation submitted for review does not support the medical necessity of some of the services billed.

How to Avoid a Denial
Submit all documentation related to the services billed which support the medical necessity of the services
Use the most appropriate ICD-9-CM codes to identify the beneficiary’s medical diagnosis.

2.  No Physician’s Orders 
Reason for Denial
This claim was fully or partially denied because there were no physician’s orders submitted for review or all or some of the services billed.

How to Avoid a Denial
A physician’s order should be submitted for review with the request for copies of medical records
The copy of the order should be legible and dated.
Ensure that orders submitted for review are for the dates of service billed.

3.  Lack of Response to Medical Record Request

1 Medical Necessity is the benchmark for the payment of Medicare. We recommend adding a reason for referral or medical necessity statement to your evaluation. Or, when receiving an ADR attach as supplementary information.

2 This cause for denial is very appealable for therapy services. CMS has identified that although a referral from the physician identifies that the patient is under the care of a physician or non-physician practitioner (NPP – depending on the site of service) and that payment is dependent on the certification of the plan by the physician/NPP. You need to review your LCD to see if this referral is identified by your MAC. If so, we recommend including the CMS statements that can be found in the Benefit Manual; also it really is good practice to ensure the referral is present in the medical record.

3 This is a no brainer! To get a denial because you didn’t respond to the ADR timely is inexcusable.


4.  Services Not Documented 
Reason for Denial
This claim was partially or fully denied because the provider billed for services/items not documented in the medical record submitted.

How to Avoid a Denial 

•  Submit all documentation related to the services billed 

• Ensure that results submitted are for the date of service billed, the correct beneficiary and the specific service billed

5.  No plan of care 
Reason for Denial
This claim was partially or fully denied because the provider did not include a written plan of care or establish the plan of care before rendering treatment. For services to be covered by the Medicare program these services must be furnished under a written plan of care and the plan of care must be established before rendering treatment. The plan can be established by the physician or non physician practitioner (NPP), the treating physical therapist, occupational therapist, or speech-language pathologist. The NPP can be a physician assistant, nurse practitioner, or clinical nurse specialist. (Only a physician can establish a plan of care in a Comprehensive Outpatient Rehabilitation Facility.)

How to Avoid a Denial
Documentation and tips that may be helpful to avoid future denials for this reason may include, but are not limited to, the following: At a minimum, the plan of care should include (1) the diagnosis, (2) long term goals, and (3) type, amount, duration and frequency of the specific therapy service. Changes in the plan may be made in writing and must be signed by one of the following: the physician, the physical therapist who furnishes the physical therapy services, the occupational therapist who furnishes the occupational therapy services, the speech-language pathologist who furnishes the speech-language pathology services, a registered professional nurse, a nurse practitioner or a clinical nurse specialist or a physician assistant .



6.  No Physician Certification/Re-Certification 
Reason for Denial
For services to be covered by the Medicare program, the plan of care must be certified by the physician or non-physician practitioner (NPP). Certification means that the physician or NPP has signed and dated the plan of care or some other document that indicates approval of the plan of care.

How to Avoid a Denial
Documentation and tips that may be helpful to avoid future denials for this reason may include, but are not limited to, the following:

• The certification must indicate that the beneficiary (1) needed the type of therapy provided, (2) was under the care of a physician, nurse practitioner, clinical nurse specialist, or physician assistant, and (3) was treated under a valid plan of care. 
• The initial certification should be signed/dated within 30 days of the first day of treatment (including the evaluation) 
• The recertification must occur at least every 90 calendar days 
• The signature may be written, electronic, or stamped. If the physician fails to date his/her signature, staff can add “Received Date” in writing or with a stamp. 
• Clear copies of the medical records should be submitted.

8.  Billing Error 
Reason for Denial
The services billed were not covered. According to documentation in the medical record, the hospital has billed items and/or services in error. The hospital may not charge the beneficiary for items and/or services that were billed in error.

How to Avoid a Denial 
Check all bills for accuracy prior to submitting to Medicare Ensure that the documentation submitted, in response to the ADR, corresponds with the date that the service/diagnostic test was rendered, and the dates of service billed

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