Medicare Top ten Claim denials and how to resolve insurance denial?

Top 10 Claim Denials
What should you do when you get a denial?

• Do you file a new claim?
• Request an appeal?
• Top denials will be discussed
      o Denial codes and descriptions
      o Reason denial occurred
      o How to resolve and avoid future denials






1. 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 homepage


2. Denial Code CO -125, MA120


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.


3.Denial Code CO - 16, MA83


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




4. Denial Code CO - 16, N290


Denial Message
 
•  Claim/service lacks information which is needed for adjudication (16)
•  Missing/incomplete/invalid rendering provider identifier (290)
 
Reason for denial 
• The claim was filed with an invalid or missing rendering NPI


How to resolve and avoid future denials
 
• Refile the claim with the valid rendering provider’s NPI in Item 24J of the CMS 1500 claim  form
•  For assistance with obtaining NPIs
   o NPI Registry
   • https://nppes.cms.hhs.gov




5. Denial Code CO - 16, N257


Denial message
 
•  Claim/service lacks information which is needed for adjudication (16)
•  Missing/incomplete/invalid billing provider primary identifier (257)
 
Reason for denial• The claim was filed with an invalid or missing NPI


How to resolve and avoid future denials
 
•  File claims with the valid billing provider NPI
•  Verify the appropriate billing provider NPI is listed in Item 33 of CMS 1500 claim form
•  Billing for group – use group NPI
•  Solo practitioner – use individual NPI





6. Denial Code CO - 5


Denial message
• The procedure code/bill is inconsistent with the place of service (05)
 
Reason for the denial• Service was rendered at a facility/location that was inappropriate or invalid


How to resolve and avoid future denials
• Verify that the procedure code/bill is consistent with the place of service
• Resubmit as a new claim with a procedure code consistent with the place of service



7. Denial Code CO -140, MA61


Denial message
• Patient/insured health identification number and name do not match (140)
• Missing/incomplete/invalid social security number or health insurance claim number (61)
 
Reason for denial• Claim was filed for a patient whose Medicare number does not match the SSA records and CWF


How to resolve and avoid future denials
 
• Review the patient’s file to locate a copy of the Medicare card. If copy has not be obtained:
   o Contact the patient for the information
   o Call the referring/ordering physician to obtain the information
• File a new claim with the correct name and Health Insurance Claim Number (HIC) as listed on the Medicare card




8. Denial Code CO - 96, M117


Denial message
• Non-covered charge(s) (96)
• Not covered unless submitted via electronic claim (117)
 
Reason for denial• Claims were received in hard copy format


How to resolve and avoid future denials
 
• Submit claims electronically in the HIPAA complaint 837 format
•  If you must submit hard copy claims, contact EDI Technology Support Center to appeal your filing status
•  EDI Technology Support – 1-866-749- 4301




9. Denial Code CO - 16, N286


Denial message
• Claim/service lacks information which is needed of adjudication (16)
• Missing/invalid/incomplete referring provider primary identifier (286)
 
Reason for denial•  Claim was filed with a invalid or missing NPI in Item 17B of CMS 1500 Claim Form


How to resolve and avoid future denials
 
•  Refile the claim with the valid referring provider NPI in Item 17B of the CMS 1500 Claim Form
•  For NPI listing, visit
   o  http://www.nppes.cms.hhs.gov




10. Denial Code Co -16, N234


Denial message
• Claim/service lacks information needed for adjudication (16)
• Missing/incomplete/invalid last seen visit date (234)

Reason for denial
• Claim was not submitted with a 6-digit or 8-digit date patient was last seen by their attending physician




How to resolve and avoid future denials
• Routine foot care
 o Item 19 of CMS 1500 claim form
 
• Include a 6-digit (mm/dd/yy) or an 8-digit (mm/dd/yyyy) date patient was last seen by his/her attending physician
 
• Include the NPI of the patient’s attending physician

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Medicaid denial reason code list

Medicaid Claim Denial Codes

1  Deductible Amount
2  Coinsurance Amount
3  Co-payment Amount
4  The procedure code is inconsistent with the modifier used or a required modifier is missing.
5  The procedure code/bill type is inconsistent with the place of service.
6  The procedure/revenue code is inconsistent with the patient's age.
7  The procedure/revenue code is inconsistent with the patient's gender.
8  The procedure code is inconsistent with the provider type/specialty (taxonomy).
9  The diagnosis is inconsistent with the patient's age.
10  The diagnosis is inconsistent with the patient's gender.
11 The diagnosis is inconsistent with the procedure.
12 The diagnosis is inconsistent with the provider type.
13 The date of death precedes the date of service.
14 The date of birth follows the date of service.
15 Payment adjusted because the submitted authorization number is missing, invalid, or
does not apply to the billed services or provider.
 16 Claim/service lacks information which is needed for adjudication. Additional
information is supplied using remittance advice remarks codes whenever appropriate
Note: Changed as of 2/02
17 Payment adjusted because requested information was not provided or was
insufficient/incomplete. Additional information is supplied using the remittance advice
remarks codes whenever appropriate.
Note: Changed as of 2/02
18 Duplicate claim/service.
19 Claim denied because this is a work-related injury/illness and thus the liability of the
Worker's Compensation Carrier.
20 Claim denied because this injury/illness is covered by the liability carrier.
21 Claim denied because this injury/illness is the liability of the no-fault carrier.
22 Payment adjusted because this care may be covered by another payer per
coordination of benefits.

23 Payment adjusted due to the impact of prior payer(s) adjudication including payments
and/or adjustments
24 Payment for charges adjusted. Charges are covered under a capitation
agreement/managed care plan.
25 Payment denied. Your Stop loss deductible has not been met.
26 Expenses incurred prior to coverage.
27 Expenses incurred after coverage terminated.
28 Coverage not in effect at the time the service was provided.
Note: Inactive for 004010, since 6/98. Redundant to codes 26&27.
29 The time limit for filing has expired.
30 Payment adjusted because the patient has not met the required eligibility, spend
down, waiting, or residency requirements.
Note: Changed as of 2/01. This code will be deactivated on 2/1/2006.
31 Claim denied as patient cannot be identified as our insured.
32 Our records indicate that this dependent is not an eligible dependent as defined.
33 Claim denied. Insured has no dependent coverage.
34 Claim denied. Insured has no coverage for newborns.
35 Lifetime benefit maximum has been reached.
Note: Changed as of 10/02
36 Balance does not exceed co-payment amount.
Note: Inactive for 003040
37 Balance does not exceed deductible.
Note: Inactive for 003040
38 Services not provided or authorized by designated (network/primary care) providers.
Note: Changed as of 6/03
39 Services denied at the time authorization/pre-certification was requested.
40 Charges do not meet qualifications for emergent/urgent care.
41 Discount agreed to in Preferred Provider contract.
Note: Inactive for 003040
42 Charges exceed our fee schedule or maximum allowable amount.
43 Gramm-Rudman reduction.
44 Prompt-pay discount.
45 Charges exceed your contracted/ legislated fee arrangement.
46 This (these) service(s) is (are) not covered.
Note: Inactive for 004010, since 6/00. Use code 96.
47 This (these) diagnosis(es) is (are) not covered, missing, or are invalid.
Note: Changed as of 6/00. This code will be deactivated on 2/1/2006.
48 This (these) procedure(s) is (are) not covered.
Note: Inactive for 004010, since 6/00. Use code 96.
49 These are non-covered services because this is a routine exam or screening procedure
done in conjunction with a routine exam.
50 These are non-covered services because this is not deemed a `medical necessity' by
the payer.
51 These are non-covered services because this is a pre-existing condition
52 The referring/prescribing/rendering provider is not eligible to
refer/prescribe/order/perform the service billed.
Note: Changed as of 10/98. This code will be deactivated on 2/1/2006.
53 Services by an immediate relative or a member of the same household are not
covered.
54 Multiple physicians/assistants are not covered in this case .
55 Claim/service denied because procedure/treatment is deemed
experimental/investigational by the payer.
56 Claim/service denied because procedure/treatment has not been deemed `proven to
be effective' by the payer.
57 Payment denied/reduced because the payer deems the information submitted does not
support this level of service, this many services, this length of service, this dosage, or
this day's supply.
Note: Inactive for 004050. Split into codes 150, 151, 152, 153 and 154.
58 Payment adjusted because treatment was deemed by the payer to have been rendered
in an inappropriate or invalid place of service.
Note: Changed as of 2/01
59 Charges are adjusted based on multiple surgery rules or concurrent anesthesia rules.
Note: Changed as of 6/00
60 Charges for outpatient services with this proximity to inpatient services are not
covered.
61 Charges adjusted as penalty for failure to obtain second surgical opinion.
Note: Changed as of 6/00
62 Payment denied/reduced for absence of, or exceeded, pre-certification/authorization.
Note: Changed as of 2/01
63 Correction to a prior claim.
Note: Inactive for 003040
64 Denial reversed per Medical Review.
Note: Inactive for 003040
65 Procedure code was incorrect. This payment reflects the correct code.
66 Blood Deductible.
67 Lifetime reserve days. (Handled in QTY, QTY01=LA)
Note: Inactive for 003040
68 DRG weight. (Handled in CLP12)
Note: Inactive for 003040
69 Day outlier amount.
70 Cost outlier - Adjustment to compensate for additional costs.
Note: Changed as of 6/01
71 Primary Payer amount.
Note: Deleted as of 6/00. Use code 23.
72 Coinsurance day. (Handled in QTY, QTY01=CD)
Note: Inactive for 003040
73 Administrative days.
Note: Inactive for 003050
74 Indirect Medical Education Adjustment.
75 Direct Medical Education Adjustment.
76 Disproportionate Share Adjustment.
77 Covered days. (Handled in QTY, QTY01=CA)
Note: Inactive for 003040
78 Non-Covered days/Room charge adjustment.
79 Cost Report days. (Handled in MIA15)
Note: Inactive for 003050
80 Outlier days. (Handled in QTY, QTY01=OU)
Note: Inactive for 003050
81 Discharges.
Note: Inactive for 003040
82 PIP days.
Note: Inactive for 003040
83 Total visits.
Note: Inactive for 003040
84 Capital Adjustment. (Handled in MIA)
Note: Inactive for 003050
85 Interest amount.
86 Statutory Adjustment.
Note: Inactive for 004010, since 6/98. Duplicative of code 45.
87 Transfer amount.
88 Adjustment amount represents collection against receivable created in prior
overpayment.
Note: Inactive for 004050.
89 Professional fees removed from charges.
90 Ingredient cost adjustment.
91 Dispensing fee adjustment.
92 Claim Paid in full.
Note: Inactive for 003040
93 No Claim level Adjustments.
Note: Inactive for 004010, since 2/99. In 004010, CAS at the claim level is optional.
94 Processed in Excess of charges.
95 Benefits adjusted. Plan procedures not followed.
Note: Changed as of 6/00
96 Non-covered charge(s).
97 Payment is included in the allowance for another service/procedure.
Note: Changed as of 2/99
98 The hospital must file the Medicare claim for this inpatient non-physician service.
Note: Inactive for 003040
99 Medicare Secondary Payer Adjustment Amount.
Note: Inactive for 003040
100 Payment made to patient/insured/responsible party.
101 Predetermination: anticipated payment upon completion of services or claim
adjudication.
Note: Changed as of 2/99
102 Major Medical Adjustment.
103 Provider promotional discount (e.g., Senior citizen discount).
Note: Changed as of 6/01
104 Managed care withholding.
105 Tax withholding.
106 Patient payment option/election not in effect.
107 Claim/service denied because the related or qualifying claim/service was not
previously paid or identified on this claim.
Note: Changed as of 6/03
108 Payment adjusted because rent/purchase guidelines were not met.
Note: Changed as of 6/02
109 Claim not covered by this payer/contractor. You must send the claim to the correct
payer/contractor.
110 Billing date predates service date.
111 Not covered unless the provider accepts assignment.
112 Payment adjusted as not furnished directly to the patient and/or not documented.
Note: Changed as of 2/01
113 Payment denied because service/procedure was provided outside the United States or
as a result of war.
Note: Changed as of 2/01; Inactive for version 004060. Use Codes 157, 158 or 159.
114 Procedure/product not approved by the Food and Drug Administration.
115 Payment adjusted as procedure postponed or canceled.
Note: Changed as of 2/01
116 Payment denied. The advance indemnification notice signed by the patient did not
comply with requirements.
Note: Changed as of 2/01
117 Payment adjusted because transportation is only covered to the closest facility that
can provide the necessary care.
Note: Changed as of 2/01
118 Charges reduced for ESRD network support.
119 Benefit maximum for this time period or occurrence has been reached.
Note: Changed as of 2/04
120 Patient is covered by a managed care plan.
Note: Inactive for 004030, since 6/99. Use code 24.
121 Indemnification adjustment.
122 Psychiatric reduction.
123 Payer refund due to overpayment.
Note: Inactive for 004030, since 6/99. Refer to implementation guide for proper
handling of reversals.
124 Payer refund amount - not our patient.
Note: Inactive for 004030, since 6/99. Refer to implementation guide for proper
handling of reversals.
125 Payment adjusted due to a submission/billing error(s). Additional information is
supplied using the remittance advice remarks codes whenever appropriate.
Note: Changed as of 2/02
126 Deductible -- Major Medical
Note: New as of 2/97
127 Coinsurance -- Major Medical
Note: New as of 2/97
128 Newborn's services are covered in the mother's Allowance.
Note: New as of 2/97

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Medicaid Claim Denial Codes - List 2

Medicaid Claim Denial Codes

129 Payment denied - Prior processing information appears incorrect.
Note: Changed as of 2/01
130 Claim submission fee.
Note: Changed as of 6/01
131 Claim specific negotiated discount.
Note: New as of 2/97
132 Prearranged demonstration project adjustment.
Note: New as of 2/97
133 The disposition of this claim/service is pending further review.
Note: Changed as of 10/99
134 Technical fees removed from charges.
Note: New as of 10/98
135 Claim denied. Interim bills cannot be processed.
Note: New as of 10/98
136 Claim Adjusted. Plan procedures of a prior payer were not followed.
Note: Changed as of 6/00
137 Payment/Reduction for Regulatory Surcharges, Assessments, Allowances or Health
Related Taxes.
Note: New as of 2/99
138 Claim/service denied. Appeal procedures not followed or time limits not met.
Note: New as of 6/99
139 Contracted funding agreement - Subscriber is employed by the provider of services.
Note: New as of 6/99
140 Patient/Insured health identification number and name do not match.
Note: New as of 6/99
141 Claim adjustment because the claim spans eligible and ineligible periods of coverage.
Note: Changed as of 6/00
142 Claim adjusted by the monthly Medicaid patient liability amount.
Note: New as of 6/00
143 Portion of payment deferred.
Note: New as of 2/01
144 Incentive adjustment, e.g. preferred product/service.
Note: New as of 6/01
145 Premium payment withholding
Note: New as of 6/02
146 Payment denied because the diagnosis was invalid for the date(s) of service reported.
Note: New as of 6/02
147 Provider contracted/negotiated rate expired or not on file.
Note: New as of 6/02
148 Claim/service rejected at this time because information from another provider was not
provided or was insufficient/incomplete.
Note: New as of 6/02
149 Lifetime benefit maximum has been reached for this service/benefit category.
Note: New as of 10/02
150 Payment adjusted because the payer deems the information submitted does not
support this level of service.
Note: New as of 10/02
151 Payment adjusted because the payer deems the information submitted does not
support this many services.
Note: New as of 10/02
152 Payment adjusted because the payer deems the information submitted does not
support this length of service.
Note: New as of 10/02
153 Payment adjusted because the payer deems the information submitted does not
support this dosage.
Note: New as of 10/02
154 Payment adjusted because the payer deems the information submitted does not
support this day's supply.

155 This claim is denied because the patient refused the service/procedure.
Note: New as of 6/03
156 Flexible spending account payments
Note: New as of 9/03
157 Payment denied/reduced because service/procedure was provided as a result of an act
of war.
Note: New as of 9/03
158 Payment denied/reduced because the service/procedure was provided outside of the
United States.
Note: New as of 9/03
159 Payment denied/reduced because the service/procedure was provided as a result of
terrorism.
Note: New as of 9/03
160 Payment denied/reduced because injury/illness was the result of an activity that is a
benefit exclusion.
Note: New as of 9/03
161 Provider performance bonus
Note: New as of 2/04
162 State-mandated Requirement for Property and Casualty, see Claim Payment Remarks
Code for specific explanation.
Note: New as of 2/04
163 Claim/Service adjusted because the attachment referenced on the claim was not
received.
Note: New as of 6/04
164 Claim/Service adjusted because the attachment referenced on the claim was not
received in a timely fashion.
Note: New as of 6/04
165 Payment denied /reduced for absence of, or exceeded referral
Note: New as of 10/04
166 These services were submitted after this payers responsibility for processing claims
under this plan ended.
Note: New as of 2/05
167 This (these) diagnosis(es) is (are) not covered.
Note: New as of 6/05
168 Payment denied as Service(s) have been considered under the patient's medical plan.
Benefits are not available under this dental plan
Note: New as of 6/05
169 Payment adjusted because an alternate benefit has been provided
Note: New as of 6/05
170 Payment is denied when performed/billed by this type of provider.
Note: New as of 6/05
171 Payment is denied when performed/billed by this type of provider in this type of
facility.
Note: New as of 6/05
172 Payment is adjusted when performed/billed by a provider of this specialty
Note: New as of 6/05
173 Payment adjusted because this service was not prescribed by a physician
Note: New as of 6/05
174 Payment denied because this service was not prescribed prior to delivery
Note: New as of 6/05
175 Payment denied because the prescription is incomplete
Note: New as of 6/05
176 Payment denied because the prescription is not current
Note: New as of 6/05
177 Payment denied because the patient has not met the required eligibility requirements
Note: New as of 6/05
178 Payment adjusted because the patient has not met the required spend down requirements.
179 Payment adjusted because the patient has not met the required waiting requirements
Note: New as of 6/05
180 Payment adjusted because the patient has not met the required residency
requirements
Note: New as of 6/05
181 Payment adjusted because this procedure code was invalid on the date of service
Note: New as of 6/05
182 Payment adjusted because the procedure modifier was invalid on the date of service
Note: New as of 6/05. Modified on 8/8/2005
183 The referring provider is not eligible to refer the service billed.
Note: New as of 6/05
184 The prescribing/ordering provider is not eligible to prescribe/order the service billed.
Note: New as of 6/05
185 The rendering provider is not eligible to perform the service billed.
Note: New as of 6/05
186 Payment adjusted since the level of care changed
Note: New as of 6/05
187 Health Savings account payments
Note: New as of 6/05
188 This product/procedure is only covered when used according to FDA recommendations.
Note: New as of 6/05
189 "Not otherwise classified" or "unlisted" procedure code (CPT/HCPCS) was billed when
there is a specific procedure code for this procedure/service
Note: New as of 6/05

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Medicaid rejection list - 3

Medicaid Claim Denial Codes

A0 Patient refund amount.A1 Claim denied charges.
A2 Contractual adjustment.
Note: Inactive for version 004060. Use Code 45 with Group Code 'CO' or use another
appropriate specific adjustment code.
A3 Medicare Secondary Payer liability met.
Note: Inactive for 004010, since 6/98.
A4 Medicare Claim PPS Capital Day Outlier Amount.
A5 Medicare Claim PPS Capital Cost Outlier Amount.
A6 Prior hospitalization or 30 day transfer requirement not met.
Note:
A7 Presumptive Payment Adjustment
Note:
A8 Claim denied; ungroupable DRG
B1 Non-covered visits.
Note:
B2 Covered visits.
Note: Inactive for 003040
B3 Covered charges.
Note: Inactive for 003040
B4 Late filing penalty.
B5 Payment adjusted because coverage/program guidelines were not met or were
exceeded.
Note: Changed as of 2/01
B6 This payment is adjusted when performed/billed by this type of provider, by this type
of provider in this type of facility, or by a provider of this specialty.
Note: Changed as of 2/01. This code will be deactivated on 2/1/2006.
B7 This provider was not certified/eligible to be paid for this procedure/service on this
date of service.
Note: Changed as of 10/98
B8 Claim/service not covered/reduced because alternative services were available, and should have been utilized.

B9 Services not covered because the patient is enrolled in a Hospice.
B10 Allowed amount has been reduced because a component of the basic procedure/test
was paid. The beneficiary is not liable for more than the charge limit for the basic
procedure/test.
Note:
B11 The claim/service has been transferred to the proper payer/processor for processing.
Claim/service not covered by this payer/processor.
Note:
B12 Services not documented in patients' medical records.
Note:
B13 Previously paid. Payment for this claim/service may have been provided in a previous
payment.
Note:
B14 Payment denied because only one visit or consultation per physician per day is
covered.
Note: Changed as of 2/01
B15 Payment adjusted because this procedure/service is not paid separately.
Note: Changed as of 2/01
B16 Payment adjusted because `New Patient' qualifications were not met.
Note: Changed as of 2/01
B17 Payment adjusted because this service was not prescribed by a physician, not
prescribed prior to delivery, the prescription is incomplete, or the prescription is not
current.
Note: Changed as of 2/01. This code will be deactivated on 2/1/2006.
B18 Payment adjusted because this procedure code and modifier were invalid on the date
of service
Note: Changed as of 2/01, 6/05
B19 Claim/service adjusted because of the finding of a Review Organization.
Note: Inactive for 003070
B20 Payment adjusted because procedure/service was partially or fully furnished by
another provider.
Note: Changed as of 2/01
B21 The charges were reduced because the service/care was partially furnished by another
physician.
Note: Inactive for 003040
B22 This payment is adjusted based on the diagnosis.
Note: Changed as of 2/01
B23 Payment denied because this provider has failed an aspect of a proficiency testing
program.
Note: Changed as of 2/01
D1 Claim/service denied. Level of subluxation is missing or inadequate.
Note: Inactive for 004010, since 2/99. Use code 16 and remark codes if necessary.
D2 Claim lacks the name, strength, or dosage of the drug furnished.
Note: Inactive for 004010, since 2/99. Use code 16 and remark codes if necessary.
D3 Claim/service denied because information to indicate if the patient owns the
equipment that requires the part or supply was missing.
Note: Inactive for 004010, since 2/99. Use code 16 and remark codes if necessary.
D4 Claim/service does not indicate the period of time for which this will be needed.
Note: Inactive for 004010, since 2/99. Use code 16 and remark codes if necessary.
D5 Claim/service denied. Claim lacks individual lab codes included in the test.
Note: Inactive for 004010, since 2/99. Use code 16 and remark codes if necessary.
D6 Claim/service denied. Claim did not include patient's medical record for the service.
Note: Inactive for 004010, since 2/99. Use code 16 and remark codes if necessary.
D7 Claim/service denied. Claim lacks date of patient's most recent physician visit.
Note: Inactive for 004010, since 2/99. Use code 16 and remark codes if necessary.
D8 Claim/service denied. Claim lacks indicator that `x-ray is available for review.'
Note: Inactive for 004010, since 2/99. Use code 16 and remark codes if necessary

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INAPPROPRIATE MODIFIER USAGE denial AND UNPROCESSABLE CLAIMS

A modifier is a two-position alpha or numeric code that is added to the end of a Current Procedural Terminology (CPT) or Health Care Procedure Coding System (HCPCS) code to clarify the service(s) being billed. Modifiers provide a means by which a service is altered without changing the procedure code. They add more information, such as the anatomical site, to the code. The Multi-Carrier System (MCS), Medicare's claim processing system, denies claims as "unprocessable" for inappropriate modifier use. "Unprocessable" means the claim is missing certain information or the information present is incorrect. Unprocessable claim denials to not have appeal rights, you must correct the claim and resubmit it for a proper initial determination. Your Remittance Advice (RA) identifies unprocessable claims by the Medicare Outpatient Adjudication (MOA) code MA130 in the upper right corner of the claim information. Code MA130 means, "Your claim contains incomplete and/or invalid information, and no appeal rights are afforded because the claim is unprocessable. Submit a new claim with the complete/correct information." Please note that because no initial determination is made on a claim returned as "unprocessable," the submitter may not ask for a review or appeal. If the use of a procedure code/modifier combination is inappropriate, you will need to make the necessary corrections and resubmit the claim. Please refer to the current versions of CPT and HCPCS coding books for correct reporting of modifiers.

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Insurance denial - Some basic terms which we need to know

Reason Codes

• Provide information about claim decisions
• Tells why a claim was paid differently than it was billed
• CO, PR

Remark Codes

• Numerical codes that further explain the denial
• Indicate if/what appeal rights apply
• B, M, MOA, and N

CO: Contractual Obligation
• Patient cannot be billed
• Provider filing error
• Provider must correct and file a new claim

PR: Patient Responsibility

• Patient can be billed

What should you do when you get a denial?

• Do you file a new claim?
• Request an appeal?
o How to resolve and avoid future denials

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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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