Are medical claim denials keeping you on your toes? We understand the struggle you must be going through while trying to juggle your clinical tasks with billing activities. Thus, we decided to help you understand each denial code in detail through our comprehensive guides.
This blog is one from this series that will cover everything you should know about denial code 277, its causes, how to address it, and some preventative strategies. So, if you don’t want to leave any penny on the table, you should read it till the end!
OA 277 Denial Code – Description
Denial code 277 is used with Group Code OA indicating ‘other adjustments’. You may receive this denial code when the disposition of a medical claim is undetermined during the grace period of the premium payment as per the Health Insurance SHOP Exchange. Simply put, the submitted claim or service will be corrected or reversed after the grace period concludes, either because the patient paid the insurance premium or failed to pay the premium.
Reasons for OA 277 Denial Code
The following are the main reasons for the OA 277 denial code:
- Reason # 1 – You submitted the claim during the premium payment grace period. It is the time given to the patient for insurance premium payment deposits before the coverage is terminated.
- Reason # 2 – Many small businesses buy insurance plans from the Health Insurance SHOP Exchange for their staff members. While most employers deduct health insurance premiums from salaries, the fate of these plans can become uncertain after resignation and layoffs, triggering denial code 277.
- Reason # 3 – The OA 277 denial code is always used with Group Code OA. This represents that the claim denial is bound to be reversed or corrected (in other words, the payment will be readjusted) once the insurance premium is paid, the grace period ends, or the lack of premium payment is confirmed.
- Reason # 4 – The nature of the medical claim was undecided since it was submitted during the premium grace period. As a result, the payer waits for the premium payment or decides whether there is a lack of premium payment rather than processing the reimbursement.
OA 277 Denial Code – Management & Resolution
Implementing medical billing best practices can considerably decrease the likelihood of claim denials. However, mistakes happen. Thus, we have curated a detailed list of things you should do if you get the OA 277 denial code. Here’s what needs to be done to address it:
Step # 1 – Review the claim details to determine what led to this denial. At this stage, you must review the following:
- Premium payment history
- Insurance coverage
- Documentation
Step # 2 – Next, you should verify the grace period of premium payment. Find out whether the medical claim in question falls within the grace period. You can get this information from the payer.
Step # 3 – Check the premium payment’s status; is it paid or not? It is a vital detail that will help you understand the reason behind denial code 277.
Step # 4 – Collaborate with the insurance company to discuss the reason for the denial and ask what else is required to resolve the issue.
Step # 5 – Take the required corrective measures to resolve the OA 277 denial code based on the information you gathered in step # 4.
Step # 6 – Document all payer communication to steer clear of any disputes in the future.
Step # 7 – Track claim status to ensure the successful resolution and supply additional documentation to the insurance payer if required.
How to Prevent OA 277 Denial Code?
In this section, we will discuss denial code 277 prevention strategies. So, without delay, let’s dive right into it:
Proactive Eligibility Verification
The best denial code 277 mitigation strategy is to regularly perform patient eligibility verification to identify whether the insurance coverage is active or not. Checking every patient’s insurance eligibility before providing services and submitting a claim will help you resolve premium payment challenges right away.
Streamline Claim Submission Process
You should utilize efficient claim submission processes to reduce the probability of triggering the OA 277 denial code. These may include training staff on documentation best practices and coding guidelines while creating proper billing SOPs to minimize errors and delays.
Besides, a seamless claim submission process will result in fewer denials and faster reimbursements, ultimately leading to a healthier revenue cycle.
Focus on Provider-Payer Relationship
Establishing open communication lines with the payers can give insights into premium-payment-related issues. Intel about these issues can enable you to quickly address the concerns, preventing the occurrence of denial code 277.
Educate Patients
Communicating to patients the consequences of non-payments and the significance of on-time premium payments can mitigate the risk of this OA 277 denial code. Also, assisting patients in making payments is another preventative strategy you can implement.
Follow-up on Unpaid Premiums
You can implement a robust payment tracking and monitoring system to keep a tab on insurance premium status and follow up with patients by sending alerts and reminders.
Comprehensive Documentation
Maintaining detailed and error-free documentation is essential. You must keep records of the patient’s premium payments, patient and payer communication, and insurance eligibility checks to submit as supporting documents with the claim form. It is one of the best prevention techniques for denial code 277 since it serves as evidence in audits or disputes.
Bottom Line
Denials can significantly disrupt your practice’s revenue cycle. Yes, resolving denials is possible, but there is a cost associated with reworking and resubmitting claims. Thus, why not direct your efforts toward preventing these denials?
CARC Denial code 277 reflects “other adjustments” made to the reimbursement amount because of the lack of clarity regarding the patient’s insurance premium payments. However, you can follow our prevention and denial management tips to get out of the “decision awaiting” period and get a decisive answer on your reimbursements.
But if it is easier said than done, leave your healthcare facility’s medical billing challenges to professionals. At MediBill MD, our denial management services are tailored to your practice’s specific needs. Our expertise will help you get a steady cash flow and higher reimbursements.
