Most Common Denials in Medical Billing in 2024

How can we address the most common denials in medical billing without understanding them? The ideal scenario for any healthcare provider is to receive payments on time. But it has become increasingly impossible with the rise of claim denials.

According to an analytical report, the claim denial rate on inpatient treatments and procedures increased by 51% between 2021 and 2023. The most frequent reasons? Incorrect or missing information and coding errors!

Insurance companies use a variety of denial codes to specify the problems in a medical claim. But whatever the reason is, receiving a denial code means rework and payment delays. You can only improve your practice’s revenue cycle by understanding the most common denial codes in medical billing.

Top 10 Denial Codes in Medical Billing

The statistics show that the acceptance rate of medical claims is decreasing with time. In fact, private insurance companies deny nearly 15% of submitted claims initially. Some claims are denied due to basic mistakes, while others get rejected due to insurance coverage issues. 

So, no matter how insignificant your mistake is, it can lead to the insurance company denying your request for reimbursement.

The most regrettable thing is that claim denials also impact the most vital aspect of a healthcare organization – patient care. 

Therefore, you should resolve your billing issues, asap. The key is to pay attention to the reasons behind claim denials. 

We have created a list of the top 10 denial codes in medical billing so you can understand the common mistakes behind rejected claims and the necessary preventive measures.

#	Most Common Denial Codes	Description
1	CO 4	The required modifier is missing.
2	CO 11	The coding does not match the service.
3	CO 16	The required information is missing, or the modifier is incorrect.
4	CO 18	The claim is a duplicate.
5	CO 22	The patient has another insurance plan. (Coordination of benefits)
6	CO 27	The insurance coverage has expired.
7	CO 29	The claim was filed after the deadline.
8	CO 45	The billed amount exceeds the Fee Schedule.
9	CO 97	The service has already been adjudicated.
10	CO 167	The policy does not cover the service.

Denial Code 4 – Missing Modifier

Insurance companies send denial code 4 when a required modifier is absent in a medical claim. Your practice can also receive this denial code in case of any discrepancy between the procedure code and the used modifier.

If you are unfamiliar with a modifier, it is simply a two-character code attached to an appropriate CPT or HCPCS code in a medical claim. Modifiers offer additional information about the particular service to the payer without changing the original meaning of the code.

Prevention & Management Tips

You can avoid the CO 4 denial code by carefully reviewing the medical claim before submission. But if you have already received the denial code, identify the issue and correct and resubmit the claim.

Denial Code 11 – Incorrect Coding

Incorrect coding can also be quite problematic! Denial code 11 specifies that your medical claim has used the wrong code for the billed procedure or service. Insurance companies send this denial code when the service in a medical claim does not match the correct CPT code.

Prevention & Management Tips

Healthcare professionals can easily prevent this denial code by streamlining the medical coding process. But if this is a common occurrence, identify the root cause by:

• Meticulously reviewing the medical codes
• Establishing a proper coding team

If you have recently received a CO 11 denial code, resolve it by identifying and correcting the coding mistake in your medical claim. Then, resubmit the claim to the payer.

Denial Code 16 – Incorrect or Missing Information

CO 16 is also one of the most commonly received denial codes. Insurance companies reject medical claims with this denial code if the necessary information is missing from a medical claim. You can also receive denial code 16 if you submit a claim with the wrong modifier.

Prevention & Management Tips

You can effectively avoid this denial code by including accurate patient information in your medical claim. But if the payer has sent you denial code 16, address it by:

• Identifying any missing information or incorrect details
• Verifying patient information
• Filling in all the missing details
• Resubmitting the claim

Denial Code 18 – Duplicate Medical Claim

Insurance providers issue the CO 18 denial code for duplicate medical claims. This denial code highlights that a healthcare professional has already been compensated for the mentioned service. 

Keep in mind that insurance companies compare medical claims to verify their originality before paying the healthcare providers.

Prevention & Management Tips

As a healthcare, you can easily avoid this denial code through honesty. File authentic medical claims with accurate information to get quick reimbursements. However, mistakes can happen. In that case, address denial code 18 by:

• Carefully examining the claim
• Identifying the reason for duplication
• Correcting any discrepancies
• Providing all the relevant documents to the payer

Denial Code 22 – Coordination of Benefits

This denial code suggests that the patient has another insurance plan. Payers issue denial code 22 to specify that another insurance provider is responsible for the billed services based on the coordination of benefits (COB). These rules determine the primary payer and clarify the contribution of other providers.

Prevention & Management Tips

Healthcare providers can avoid this denial code by verifying their patient’s insurance coverage before providing any treatment. As for addressing denial code 22, make sure to:

• Get in touch with the primary insurance provider
• Submit another claim to the correct insurance company
• Keep track of the secondary claim

Denial Code 27 – Expired Insurance Coverage

Insurance providers issue this denial code to explain that the patient’s coverage has expired. In simple words, denial code 27 suggests that the billed services were performed after this expiration date. As a result, healthcare providers don’t receive any reimbursement.

Prevention & Management Tips

You can avoid this financial loss by verifying the expiration date of your patient’s insurance coverage beforehand. But if the payer has denied your claim with a CO 27 denial code, take the following steps:

• Communicate the situation to the patient
• File an appeal with the insurance company
• Explore financial assistance programs

Denial Code 29 – Late Submission

This denial code indicates that you have missed the deadline for submitting a medical claim. Insurance companies require timely submissions of medical claims after the date of service. They usually have a defined timeline for the billing process. If you exceed that timeframe, they will deny your medical claim with a CO 29 denial code.

Prevention & Management Tips

File medical claims on time for quick reimbursements. Avoid unnecessary delays and errors to reduce the possibility of receiving this claim denial code. But if you are already facing this denial code, then address it by:

• Determining the reason for missing the submission deadline
• Collecting supporting documentation
• Appealing to the insurance provider

Denial Code 45 – Billed Amount Exceeds the Schedule Fee

CO 45 is also one of the most common denial codes. Many healthcare providers receive this code due to overbilling. Insurance companies define their maximum allowable amount in fee schedules or contracts. They send this CO 45 denial code when you exceed that amount for a particular service.

Prevention & Management Tips

You can easily prevent this denial code by verifying the contractual rates of covered services. But if you have already received adjusted reimbursement with the CO 45 denial code, take the following steps to solve this issue:

• Identify the overcharged service
• Review the scheduled fee
• Don’t exceed the payer’s maximum allowable fee

Denial Code 97 – Already Adjudicated Service

Insurance providers hand out this code for services or procedures already included in another service. CO 97 indicates that the billed service has already been reimbursed as part of another procedure. In other words, it does not qualify for individual payment.

Prevention & Management Tips

Thorough documentation can help you avoid this code. Some effective strategies for addressing denial code 97 include:

• Reviewing the insurance policies to identify bundled services
• Double-checking the adjudication in the medical claim
• Talking with the coding team to find an appropriate modifier
• Taking appropriate actions

Denial Code 167 – Non-Covered Services

Another common type of denial code is CO 167. Insurance providers usually issue this denial code when they think a diagnosis is medically unnecessary. Denial code 167 explains that the patient’s insurance plan does not cover the performed service or procedure.

Prevention & Management Tips

CO 167 occurs for various reasons, including non-covered services and insufficient or outdated information. Therefore, healthcare providers should take the following steps to avoid denial code 167:

• Verify patient’s coverage
• Review insurance guidelines
• Keep up with all the changes
• Use appropriate codes

To resolve this code, take the following steps:

• Analyze the claim details
• Review your patient’s medical records
• Understand the denial reason and make necessary corrections

Bottom Line

Minimize claim rejections by understanding the different denial codes! Delayed payments are a major concern in the healthcare industry. Due to the complex billing process, healthcare providers often make simple mistakes in medical claims. As a result, insurance companies deny most medical claims with appropriate denial codes. Some errors are more frequent than others. Therefore, we have explained the most common denial codes in medical billing to help you avoid unexpected billing issues. But if this whole thing is too much of a headache, outsource denial management services to address these codes.