Dispute insurance denial - Types of hospital Denials

Insurance claim denials generally fall into 2 major categories: claim-level denials and service-level denials. Medicare and Medicaid have created a set of status codes to indicate why claims have been denied. Appropriate hospital staff members involved in billing and coding should be familiar with these

codes and what they mean to the organization. Code information can be found at the CMS Web site: www.cms.hhs.gov/manuals/IOM/list.asp.

Denial of the entire claim is considered a claim-level denial. For many hospitals, this type of problem accounts for the majority of Medicare and Medicaid denials and typically results from inaccuracies related to patient registration, late-charge management, duplicate billing, production of medical

information for external review, and/or physicians’ ordering practices. Common denial types include the following:

> The patient was not identified as insured

> The claim submitted was a duplicate

> The services were deemed by the payer as not medically necessary

> The charges for outpatient services were in proximity to inpatient services

> The patient’s date of death preceded the date of service

A service-level denial occurs when any portion of the claim associated with an individual service is denied. Service-level denials often result from problems with patient registration, questions of medical necessity, issues related to local medical review policies, and inaccurate diagnostic and procedural

coding processes. Typical reasons for denial include:

> The claim is denied based on diagnosis

> The procedure code used is inconsistent with the modifier, or information is missing

> The service is considered not medically necessary by the payer

> The service is not paid separately. Problems with claims that originate during patient registration are common because this function is decentralized in many healthcare organizations, particularly for outpatient services. Therefore, denied claims often result from process breakdowns due to inadequate interdepartmental communication or failure to learn from the experience of previous denials. Repeated denials within hospital systems occur frequently for the same patient and typically happen for several reasons. For example, the registration staff may be using out-of-date demographic data and may not be informed of the original denial. Denials related to deceased

patients are often due to poor management of late charges, as these charges may be entered into the system using the date of data entry as the date of service instead of listing the actual date the patient received treatment. Denials related to medical necessity and failure to provide information

are usually due to inaccurate diagnostic coding (ICD-9) and/or insufficient medical record documentation to support the services billed