Insurance Claim Denied or Rejected? What are the reasons behind it?

Insurance billing in healthcare has become a challenging and complex task with constant upgrades and ever-changing guidelines and regulations. They keep billers and coders engaged in complying with the claim processing, which feels like a moving target as a whole.

Healthcare billers have to make sure that insurance companies pay medical claims on time. One of the most frustrating things that can happen to a medical biller is having a claim denied. If this happens, the biller needs to take action to appeal the denial and get the claim paid.

There are many reasons why a claim might be denied. The most common reasons are that the insurance company did not receive the claim, the claim was incomplete, an incorrect diagnosis code or procedure code, missing information, or the service was not covered by the patient’s insurance.

If a biller gets a denial, they should first contact the insurance company to find out why the claim was denied. They can then take the necessary steps to fix the problem and resubmit the claim. This can be a lengthy and complicated process, but it’s worth it if it means getting the claim paid. To know how you can proceed with the denied claim resolutions, keep reading.

What is a Denied Claim?

A denied claim is a claim that an insurance company does not pay. When a claim is denied, the insurance company will write a reason for the denial.

Medical healthcare claim denials happen for a variety of reasons, including;

  • The policyholder did not follow the proper procedures for filing a claim
  • The policyholder did not have the proper coverage in place
  • The policyholder made a mistake on the claim form
  • The claim is for an excluded item or service
  • The insurance company does not cover the item or service
  • The claim is for a pre-existing condition

If you have had a claim denied, you may be able to appeal the decision or file a grievance with the insurance company. The appeals process varies by the insurer but usually involves submitting additional documentation or information in support of your claim.

Best Practices to Combat Denials

Best Practices to Combat Denials

Identify the Problem

It can be frustrating and confusing if you receive a notice that your medical claim has been denied. However, by taking a closer look at the reasons for the denial and gathering supporting documentation, you can increase your chances of getting your claim approved.

The first step is to understand why your claim was denied. The notice you receive should give you a reason for the denial, and you can also contact your insurance company to get more information. Once you know the reason for the rejection, you can take steps to fix the problem and resubmit your claim.

You can also appeal the decision if you don’t think the denial is fair. Your insurance company should have a process in place for appeals, and you can also contact your state’s insurance commissioner for help.

Using the Right Technology

As technology improves, so too does our ability to streamline processes and reduce errors. Including many factors that contribute to medical claim denials, one of the most common is the use of outdated or incorrect technology. When medical billing and coding systems are not up-to-date, it can lead to errors that result in denied claims.

To reduce the number of claim denials, it is important to use the most up-to-date technology. This includes medical billing and coding software that is designed to meet ever-changing regulations. In addition, using electronic claims systems can help to ensure that claims are submitted correctly and in a timely manner.

For instance, many practices, clinics, and hospitals are now moving to use electronic health records (EHRs). This allows them to track patient information and records more easily and accurately, which can help avoid errors leading to claim denials.

There are also a number of claim denial management software programs that can help to identify and correct errors before claims are submitted. These programs can often be customized to fit the needs of a particular practice or hospital.

By using the right technology, you can help progress your practice revenue and reduce the number of medical claim denials, and improve the healthcare system’s overall efficiency.

Mitigating Losses to Reduce Medical Claim Denials

When billing for medical services, it is important to be mindful of the potential for losses due to claim denials. While some denials are inevitable, there are steps that can be taken to minimize losses and ensure that claims are more likely to be approved.

One way to reduce losses is to hire a billing specialist or outsource medical billing service with experience in medical billing and coding. This person can help to ensure that claims are filed correctly and in a timely manner. They can also help to identify any potential problems that could lead to a denial.

Another way to mitigate losses is to stay up-to-date on billing guidelines and requirements. This can be done by regularly reading industry publications and attending conferences and seminars. Staying current on billing requirements will help to ensure that claims are filed correctly and reduce the chances of them being denied.

Look for Duplicate Claims

Duplicate claims are a common reason for medical claim denial. A duplicate claim is when an insurance company receives two or more claims for the same service from the same provider. This can happen if the provider bills the wrong insurance company or if the patient has multiple insurance plans.

Duplicate claims can be a hassle for both patients and providers, but there are ways to avoid them. For providers, it’s important to verify a patient’s insurance information before billing. And for patients, it’s important to know which insurance plan to use for which service. If you have any problems, your provider or insurance company can help you sort them out.

Coverage Ineligibility

One common reason is that the insurance policy does not cover the patient. This can happen if the patient has not paid their premiums or if the coverage has lapsed for some other reason. Other times, a claim may be denied because the service needs to be covered by the policy. This can happen if the service is considered experimental or not medically necessary. Lastly, a claim may be denied because the patient has not met their deductible.

Hospital/Physician is not an In-network Provider

In-network providers are healthcare providers who have contracted with an insurer to provide care to its members at a negotiated rate. Out-of-network providers have not contracted with the insurer and may charge more for their services.

Many insurers require patients to get prior approval before using an out-of-network provider. If you use an out-of-network provider without prior approval, the insurer may deny your claim or only pay a portion of the charges.

In some cases, an out-of-network provider may be considered an in-network provider if they participate in the insurer’s network of providers. This is typically true if an in-network provider refers a patient to have extra services like a chiropractor or physiotherapist.


Undoubtedly, electronic claim management is a daunting task if they are not operated by a professional or with the need for more information about claims, dealing with insurance companies, and understanding the prerequisites of compliance. Medical billing specialists should look for the reasons for claim denials and keep learning from them to avoid future mistakes and further claim denials.

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