Common Coding Denials You Need to Know for Faster Payments

Denial Code CO 18: Everything You Need to Know About
Denial Code CO 18: Everything You Need to Know About

Common Coding Denials You Need to Know for Faster Payments


No one likes to see a denied claim from an insurance payer. A denied claim is lost or delayed revenue for your eye care practice.

Researching and re-submitting denied claims can lead to long, frustrating hours trying to figure out why the claim was denied in the first place. That’s why nearly 65% of denied claims are never reworked by providers.

Not only do you have to adhere to strict state-specific coding and audit guidelines, but you must also evaluate medical documents and physician notes to ensure claims are not under or over-coded. Knowing how to prevent rejections or denials in the first place is your best return on investment (ROI).

The good news is that on average, 63% of denied claims are recoverable and nearly 90% are preventable. Let’s take a closer look at common coding denials and reasons, and how you can establish a proactive solution to increase your business revenue.

What is a Coding Denial?

A denied claim is a claim that has made it through the adjudication system—it’s been received and processed by the insurance or third-party payer. However, the claim has been deemed unpayable for services received from the healthcare provider.

Payers will send you an Explanation of Benefits (EOB) or Electronic Remittance Advice (ERA) that explains why the claim was denied. Even though a payer denies a claim, that doesn’t mean it’s not payable and you can’t appeal the claim. Before you can resubmit the claim, you must determine why the claim was denied and correct the errors.

“With Fast Pay Health, they check all our claims via coding reviews before they’re even submitted. If for some reason we do have a denial, they take care of the claim correction and resubmission.” -Michelle Schoch, Vision Center Ltd (see success story)

The Difference Between Diagnosis Code and Procedure Code

Diagnosis Code: The ICD-10-CM (International Classification of Diseases) diagnosis code is a medical code that describes the condition and diagnoses of patients, whereas the ICD-10-PCS code describes inpatient procedures. A diagnosis code tells the insurance payer why you performed the service.

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Last summer, the Centers for Medicare & Medicaid Services (CMS) and the National Center for Health Statistics (NCHS) released the 2019 ICD-10-CM eye-specific code changes. ICD-10-CM codes are divided into 21 chapters and based on code subjects.

2019 ICD-10-CM codes are used for eye-specific patient encounters occurring from October 1, 2018, through September 30, 2019. This is the third mandated update to ICD-10-CM codes since ICD-10 codes went live on October 1, 2015.

Related: Stay Current with This 2019 Eye Care ICD-10-CM Code Updates Guide

Procedure Code: The American Medical Association® Current Procedural Terminology (CPT®) code describes a medical, surgical and/or diagnostic procedure. 2019 CPT® code changes became effective January 1, 2019.

CPT® codes are published by the AMA and consist of three types or categories of five-character codes and two-character modifiers to describe any changes to the procedure.

  • Category 1: Describes services and procedures providers perform

  • Category 2: Tracks follow-up and outcomes

  • Category 3: Indicates the use of emerging technologies

For additional 2019 CPT® code change eye care industry resources, visit Ophthalmic Professional and Review of Ophthalmology.

Common Coding Denials and Adjustment Reasons You Need to Know

Claim denials fall into three categories: administrative, clinical, and policy—a majority of claim denials are due to administrative errors. Once you correct the errors, you can resubmit the claim to the insurance payer.

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For example, the diagnosis and procedure codes may be incorrect, or the patient identifier and/or provider identifier (NPI) is missing or incorrect. Let’s examine a few common claim denial codes, reasons and actions.

CO-4: The procedure code is inconsistent with the modifier used or the required modifier is missing for adjudication (the decision process). Use the appropriate modifier for that procedure. For example, some lab codes require the QW modifier.

CO-15: Payment adjusted because the submitted authorization number is missing, invalid, or does not apply to the billed services or provider. Resubmit the claim with the authorization number or valid authorization.

CO-50: Non-covered services that are not deemed a “medical necessity” by the payer. To avoid coding denials, when you use a CPT® code, you must also demonstrate that it is “reasonable and necessary” to diagnose or treat the patient’s medical condition. Medical necessity is based on “evidence-based clinical standards of care.” Check the diagnosis codes or bill to the patient.

CO-97: The payment was adjusted because the benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated. Resubmit the claim with the appropriate modifier or accept the adjustment.

CO-167: The diagnosis (es) is (are) not covered. Review the diagnosis codes(s) to determine if another code(s) should have been used instead. Correct the diagnosis code(s) or bill the patient.

CO-222: Exceeds the contracted maximum number of hours, days and units allowed by the provider for this period.

CO-236: This procedure or procedure/modifier combination is not compatible with another procedure or procedure/modifier combination that was provided on the same day according to the National Correct Coding Initiative (NCCI) or workers compensation state regulations/fee schedule requirements. The service has been paid as part of another service you billed on the same date of service.

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CO-B16: The payment was adjusted because “New Patient” qualifications were not met. Resubmit the claim(s) with the established patient visit.

OA-109: Claim not covered by this payer/contractor. You must send the claim to the correct payer/contractor. Review coverage and resubmit the claim to the appropriate carrier.

PI-204: This service/equipment/drug is not covered under the patient’s current benefit plan. Bill the patient.

PR-1: Deductible amount. Bill to secondary insurance or bill the patient.

Claim Adjustment Reason and Remittance Advice Remark Code Resources

Claim Adjustment Reason Codes (CARCs): Reason Codes communicate why the payment was adjusted and describe why the claim or service line was paid differently than it was billed.

Remittance Advice Remark Codes (RARCs): Remark Codes are used to provide additional explanation for an adjustment already described by a Claim Adjustment Reason Code or to convey information about remittance processing.

Get Paid Faster with Fewer Coding Denials

Fast Pay Health certified coders and billing consultants have extensive experience in optometry and ophthalmology coding. Coders are well-versed in CPT® and ICD-10 coding, billing with code modifiers, electronic data interchange (EDI) processes, industry standards, and maintaining 100% HIPAA compliance.

Our billers make sure your claims are scrubbed clean and free from errors before we submit them—decreasing claim denials and delivering a consistent and positive cash flow for your practice.

Request a free practice analysis today and start reaping the benefits of fewer denied claims and faster payments.

CPT® is a registered trademark of the American Medical Association®.

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