How to avoid insurance denial - Best six points to remember.

Insurance claim denials can be costly for any family medicine practice. Denials may lead to one of two different scenarios:

A. If the denial is not applicable, your practice will experience a loss of income for a service already performed; or,

B. You will incur increased expense in appealing the denial — a situation no practice wants to be faced with, particularly as reduced payment from many payers affects practice income.

How to avoid insurance denial 

Here are the important points

1. Verify Insurance Plan Coverage every time: While this may seem obvious, in fact the number of claims denied or returned because the wrong insurance carrier is billed is staggering. It is the number one reason claims are not paid upon first submission.

2. Billing for services found to be “medically not necessary”: This is a second reason claims are commonly denied or not paid. All too often, practices write this money off and do not bill the patient for these services.

You can be proactive in reducing these denials by knowing which of the services you provide are tied to specific diagnoses, time periods (e.g., annually, biannually, every five years) or other payment conditions. Next, implement a policy to address how to bill for these services if one of the conditions is not met.

3. Updating Codes (ICD-9, CPT, HCPCS): Every year the code sets used to report and develop insurance claims are updated. Using invalid codes is a frequent source of claim denial.

4. Obtaining a copy of the member’s current insurance card at all visits, as policies can often change. This will ensure that the claims are submitted with the most current policy information.

5. If a corrected claim is needed, it must be marked as “corrected claim”, and indicate what is being corrected. If the corrected claim is not marked as such, it may be denied as duplicate or the issue may not be resolved appropriately

6.  Be sure to include all current and complete provider information on the claims, including the current tax identification number and NPI numbers in the correct fields

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Medicare denial CO 4, C0 125 , MA 120, CO 16 & MA 83

Denial code CO 4

Denial Message
• The procedure code is inconsistent with the modifier used, or a required modifier is missing (04)

Reason for Denial
• Claim was filed with a procedure code and modifier that did not correspond

How to resolve and avoid future denials

• Verify that the procedure code and modifier descriptions correspond with each other
• File claims with consistent procedure code and modifier descriptions
• Access the Modifier Lookup tool on www.PalmettoGBA.com/bsc

Denial reason code co 125 , MA 120

Denial message
• Payment adjusted due to billing or submission error (125)
• Missing/incomplete/invalid CLIA certification number (120)

Reason for denial
• Claim contains incomplete/or invalid CLIA certification number

How to resolve and avoid future denials

• Resubmit the claim using the appropriate CLIA number in Item 23 of the CMS 1500 claim form or in Loop 2300 or 2400, REF/X4, 02 for electronic claims
• Updates to the waived test under CLIA are published in the Medicare Advisory
• A complete list of tests granted waived status under CLIA is attached to CR 5913 at www.cms.hhs.gov/Transmittals/downloads/ R1477CP.pdf.

Medicare denial code co 16 MA 83

Denial message
•Claim/service lacks information which is needed for adjudication (16)
• Did not indicate whether Medicare is primary or secondary payer (83)

Reason for denial

•The MSP type was not submitted in the 2000B, SBR, 05 (Insurance Type Code) field

How to resolve the denial

• Resubmit the claim with the appropriate MSP type in the Insurance Type Code field
• For a complete list of MSP types
www.PalmettoGBA.com/bsc/resources
o Select Medicare Secondary Payer
o Electronic Claims – Valid MSP Types

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Avoiding denial - claim review before submission

Common Problems and Solutions

When a denial or underpayment is received from a payer, it’s often necessary to review the original claim
submitted to the payer along with the EOB to identify and correct the problem. By doing this type of
analysis, you can determine if there was a simple coding error or if the denial was based upon
something else, such as the payer’s coverage policy on a specific procedure or product. Here are some
items to keep in mind when reviewing the original claim and EOB.

1. Original Claim Analysis

> Review the claim to ensure that all codes are complete and accurate

—ICD-9-CM codes are listed and coded to the highest level of specificity
(don’t use a truncated ICD-9-CM code when a more specific code is available)

—ICD-9-CM codes are linked to each service line on the claim form

—J and Q codes for drug products are listed and units are accurately billed

—CPT codes reflect the services provided during the patient encounter

—Modifiers are used as necessary

—The most recent volumes of each of the coding books are used as a reference;
out-of-date codes can result in denials
> Examine your charges; most payers will reimburse the lesser of their allowable or your charges

—Verify that date of service and place of service are correct

—Include correct names and provider identification numbers of both referring and treating
providers on the claim

—Be sure you’ve billed the right payer, especially if the patient has primary and secondary insurers

—Confirm you have the signature of the patient on file and the treating physician’s signature on
the claim

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How to prevent the denial

Denial Explanation

Claim/service denied because Medicare cannot pay for the diagnosis/diagnoses on the claim. Denied based on a LCD. Provider liable.

How to Prevent These Denials

These are automated denials. LCDs include a list of covered diagnoses. The diagnosis codes on the claim are compared to the procedure code billed to determine if the services are covered by the LCD. When submitting a claim for payment, code all applicable diagnoses on the claim. Include the final diagnosis as well as
signs and symptoms.

Denial Explanation

Claim/service denied per the NCD module because the diagnosis/diagnoses on the claim did not support the medical necessity for the service. Provider liable


These are automated denials. The laboratory NCDs include a list of covered diagnoses. The  diagnosis codes on the claim are compared to the procedure code billed to determine if the services
are covered by the NCD. When submitting a claim for payment, code all applicable diagnoses on the claim. Include the final diagnosis as well as signs and symptoms.

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