Ultimate Guide to Denial Code CO 27

Seeing hundreds of patients, managing documentation, processing claims, and following up on payments is not easy when you try to juggle everything in-house, especially if you are a solo practitioner. In such a hectic routine, making mistakes becomes normal. However, getting denials or every claim can exhaust you financially and make it challenging to keep you afloat in this competitive healthcare space.

Thus, this guide will help you understand denial code 27, the common causes behind it, best practices to prevent it, and steps to resolve it. So, if you want to know about this denial code and how you can save your rightful reimbursements from it, read this guide till the end!

What is Denial Code 27?

Denial code 27 means that the expenses for the rendered care services or procedures were incurred after the insurance coverage expired. As a result, the insurance company is not liable to reimburse for the claim during this period.

Common Causes of CO 27 Denial Code 

Some of the common reasons that may lead to denial code 27 are discussed below:

Failure to Update Patient Records

You must promptly update patient insurance coverage details before every encounter and update the status in case of termination. Failure to update the insurance coverage status and charging for medical service after the termination results in the CO 27 denial code.

Delaying Claim Submission

Often, healthcare providers delay submitting insurance claims. In case, you submit it after the insurance coverage termination date, it will trigger denial code 27.

Error in Patient Record

Another reason that can result in this denial code is recording the wrong insurance coverage termination date in patient records. This error gives a false impression to the provider, leading to submitting claims after the coverage ends.

Lack of Communication with the Patient

The gap between provider-patient communication can also lead to inconsistent insurance coverage information. For example, the patient fails to inform you about the coverage termination, leading to the denial code 27.

Inadequate Coverage Verification

In case you or your staff failed to verify the patient’s insurance coverage details and status before rendering the service or procedure, it may also result in denial code 27.

Changes in Insurance Plans

Another reason that may trigger the CO 27 denial code is when a patient switches insurance plans without informing their healthcare provider, and the physician continues billing for services or procedures to the previous payer even after coverage termination.

Preventive Strategies for Denial Code CO 27

Here are some best practices to reduce the chances of receiving denial 27:

Communicate with Patient

Establish clear communication lines with patients and encourage them to notify you of any changes to their insurance plan or coverage termination to prevent denial code 27.

Verify Insurance Coverage

Make it a standard operating procedure (SOP) to verify the patient’s insurance coverage details before rendering any care procedure to avoid billing for services after coverage termination.

Perform Regular Audits

Regularly conduct internal audits to review billing and claim processing workflow to identify and rectify issues related to completeness and accuracy of patient documentation that may lead to denials related to coverage termination.

Stay Current on Payer Policies

Request your staff to stay up-to-date on any changes in the payer’s coverage policies, requirements, and coverage termination criteria to ensure compliance and prevent denial code 27.

Implement Automated RCM Solution

Utilize automated revenue cycle management (RCM) software to automate claim submission and coverage verification processes. It will minimize errors while checking coverage termination details.

Train Staff on Payer Policies

Train your staff on the insurance company’s plan coverage details, termination policies, and the importance of verifying eligibility before each encounter to avoid receiving denial code 27.

Optimize the Claim Submission Process

Implement a robust claim submission and insurance coverage verification process that checks for accuracy and completeness of insurance termination and other relevant information before submitting a claim to the payer.

Denial Code CO 27 Management & Resolution

The best practices we discussed above will help you prevent denial code 27. However, if it does occur, here’s a step-by-step guide for effective resolution and management.

1. The first step to resolve this denial code should be to check the exact date the patient’s coverage ended. You can easily find this detail in the patient’s insurance policy or directly contact the payer to fetch this information.
2. Next, look for medical billing or documentation errors to ensure the procedure was rendered before the insurance coverage ended. Besides, you can double-check the patient’s eligibility status at service time and verify the service date.
3. Connect with the patient to collect more information on the situation.
4. During the review, if you found evidence that the denial code 27 is unjust, we recommend you submit an appeal to the payer with proof that the procedure was performed before coverage termination.
5. If the patient cannot pay for the service out-of-pocket and the denial is upheld, it is time to discuss alternative payment options with the patient, including financial assistance programs.
6. It is always a good idea to keep a record of all steps taken to address the denial so you can have lessons learned, at hand, when dealing with similar denials in the future.

Bottom Line

The denial code 27 could be the result of a simple miscommunication between the patient and the healthcare provider or the provider and the insurance payer. It can be proactively prevented when vigilance is maintained during patient eligibility, documentation, and claims submission. 

Healthcare providers must employ best practices like timely insurance coverage verification, effective communication with the patient, staying current on payer policies, conducting regular audits, implementing automated RCM software, and investing in staff training to mitigate the occurrence of the CO 27 denial code. 

However, if you have already received a denial 27 and are struggling to manage and resolve it, you can get professional denial management services from a reputable company like MediBill MD.