Avoidable Claim Rejections and Denials

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By Erin Cammarata

Before introducing avoidable denials, let's review the differences between rejected claims and denied claims.

A rejected claim, according to the Centers for Medicare & Medicaid Services, is a claim that does not meet the basic format or data requirements for submission. If a claim is rejected, it never makes it to the payer. Rather, the rejection process usually takes place during the clearinghouse scrubbing process.

A denied claim has made it through the clearinghouse's scrubbing process, but the payer deems it unpayable and denies it, giving it a denial code to specify the reason. It is the O&P provider's responsibility to have processes in place whereby a vigilant person is working the accounts receivable. If the accounts receivable are being attended to properly, denied claims will be discovered within the timeframe for resubmission allowed by the insurance carrier. The claims can be corrected and resubmitted for successful processing, whereby the practice gets paid.

Whether your claim is rejected or denied the result is the same; you are not getting paid.

So let's review some common avoidable mistakes.


I wish this mistake wasn't on the top of my list, but it is one we see all too often. Simple data entry or clerical errors are far too common. That includes errors such as the patient's name, insurance identification number, and date of birth.

A misspelling of the patient's name or leaving off a prefix or suffix in the insurance identification number is enough to get the claim denied and not processed. For example, if the patient has Jr. on his Medicare identification card, Jr. must be included when that patient is added to your management software. When registering the patient, take the time to enter the patient's name exactly the way it appears on his or her insurance card.

Sending the claim to the wrong insurance company

This usually happens after patients come to the office without their insurance cards. For example, a patient tells your office staff he still has United Healthcare, and his United Healthcare information is in your system, so it's assumed to be correct. However, while the patient may still have United, he now has a different plan with a different payer ID and address. Unfortunately, you won't know it is the wrong payer until the claim is 10 to 15 days old, after your accounts receivable representative follows up on the claim status and is informed that the claim is not on file. This can be avoided by asking patients to mail, fax, or somehow provide a front and back copy of their insurance cards at the time of the visit or directly afterward.

During the verification process, also confirm with the payers if they are primary or secondary and request their Payer ID. Payer IDs are five- to seven-character codes that will route the claim to the appropriate payer. IDs can be numbers, letters, or a combination of the two and are usually found on the back of the insurance card. If the card is not in hand, it is recommended to ask the representative for the correct Payer ID.

Verification and eligibility

This is not a new concept in healthcare, but it is vital. Be sure to verify your patient's eligibility for services prior to delivery.

During the verification process, you will obtain information regarding the patient's coverage, deductibles, prior authorization requirements, and where the claim should be sent.

The issue that we see too often is that this information changes frequently. If the patient's original office visit was more than 30 days from the delivery appointment, it is recommended that his or her insurance coverage be reverified prior to delivery. This is the only way to be sure policies have not changed, deductibles remain, and the patient's coverage is still active.

Developing processes and holding employees accountable for them will help prevent these common claim denials. Not only will this practice speed up your cash flow, but it will allow you to garner data that will help you run your business more efficiently. Keeping track of all rejections and denials will help you identify and pinpoint where improvements and advanced training need to be made. For facilities that are accredited by the American Board for Certification in Orthotics, Prosthetics and Pedorthics, this information is part of accreditation standard PM.6: "You must collect and measure data to evaluate the frequency of billing and coding errors." Tracking the data will satisfy your requirements for that standard, and avoid the avoidables.

Erin Cammarata is president and owner of CBS Medical Billing and Consulting. She can be contacted at erin@cbsmedicalbilling.com.