Many of the top 10 most common denial codes in medical billing stem from avoidable errors. These payment cycle disruptions (even when temporary) can have a significant impact on an organization’s ability to continue delivering patient care. For facility leaders, understanding what often drives these rejected claims is crucial to protecting revenue and operational stability.
In this article, we'll outline some of the most frequent medical billing denial codes and provide tips to help you reduce avoidable claims errors and safeguard your organizational finances.
What Is Denial in Medical Billing Contexts?
Medical denial codes are standardized, alphanumeric codes that insurance providers send to facilities to explain why a claim was not approved. Each code represents a specific explanation and serves to help providers take corrective actions when submitting an appeal.
Denial codes are typically grouped into three different categories, which are represented by two letters at the beginning of each code:
- CO (contractual obligations) indicates that the provider has billed for services that have gone beyond the contractual agreement with the insurer.
- PR (patient responsibility) indicates that the patient is responsible for payments, such as copays or deductibles.
- CR (correction and reversals) indicates any administrative mistakes or reversals in the billing process.
"CO" codes are more specifically used to indicate the initial reasoning behind a denial. "PR" and "CR" codes are used alongside "CO" codes to show revised information or specify who's responsible for payment.
Where Can You Find a Comprehensive Denial Codes List?
Beyond understanding the most common denial codes in medical billing, it's important to know where to access a complete list for reference. Typically, you can obtain a denial code list from the insurance companies your providers are enrolled with. If you're looking for an updated public repository, you can also refer to the Claim Adjustment Reason Codes list maintained by X12.
What Happens if a Claim Is Denied?
A denial in medical billing doesn’t necessarily mean that the claim will never be paid. If the rejection was due to minor errors, a provider can make corrections and resubmit the claim to the insurance company. A provider also has the option to file an appeal, but there's no guarantee that it will be accepted.
Since many of the most common denial codes in medical billing are preventable, addressing errors prior to submitting claims can help reduce the burden of managing denials.
Preventing the Top 10 Denial Codes in Medical Billing at Your Facility
With over 80 million claims being denied by insurers each year, it's important for facilities to proactively work to optimize the claims submission process. Below, we'll outline the most common denials in medical billing (with codes) and share strategies that you can employ to help prevent them.
1. Denial Code CO-11: Error in Diagnosis Code
CO-11 indicates that a claim is mismatched with a diagnosis code. This commonly occurs when a documented diagnosis isn't specific enough to justify treatment.
Prevention tip: Regularly train staff on the most up-to-date ICD codes. This will help ensure that the most specific diagnoses are documented.
2. Denial Code CO-15: Missing or Invalid Authorization Number
This denial code is issued when the wrong authorization number is documented for a service. This can occur if, for instance, a doctor starts a claim for an MRI and then the medical biller accidentally types the wrong authorization number into the corresponding field.
Prevention tip: Ensure that your facility has an organized pre-authorization process in place and that all authorization requirements are double checked by staff.
3. Denial Code CO-16: Missing Information
Missing (or insufficient) information can lead to CO-16 denial codes and reasons for the rejected claim can be quite simple like a missing patient demographics or National Provider Identifier (NPI) number. If it’s related to medical necessity, denial code CO-16 may indicate that there was insufficient clinical information to support the service’s requirement.
Prevention tip: Use claim-scrubbing software that identifies missing fields or errors. This can help providers and billers double-check information prior to submitting a claim.
4. Denial Code CO-18: Duplicate Claim or Service
CO-18 indicates that the same service has been billed more than once. This can occur due to administrative errors or if providers forget to make adjustments during a resubmission. It can also occur with non-physician billing. For example, when a physician assistant bills for a new patient who was seen by a nurse practitioner within that practice two years earlier, it’s flagged as a duplicate service because the providers bill within the same specialty.
Prevention tip: Implement a clear process for how providers and billers should coordinate with each other during the submission process. Establishing roles will prevent multiple people from documenting the same information.
5. Denial Code CO-22: Benefit Out of Network
This out-of-network denial code is issued when a claim is submitted to the wrong insurer or falls outside of enrolled coverage. It’s commonly an issue when a patient has multiple insurers and there's a lack of coordination of benefits.
Prevention tip: Remind staff to verify a patient's insurance coverage options during each visit. This will ensure that any changes to their plan are accounted for in a timely manner.
6. Denial Code CO-29: Time Limit Expiry
This indicates that a provider has missed the deadline to submit a claim. This can become an issue if a facility frequently deals with claim backlogs or there are too many mistakes in the administrative billing process.
Prevention tip: Adopt a system that automatically tracks outstanding claims. This can help your staff stay ahead of pending payments or address claims that require more follow-up.
7. Denial Code CO-45: Excessive Charges
CO-45 indicates that the charges submitted on a claim exceed the maximum amount that the insurer will cover. This means that a provider has billed for a service at a higher price than what was established in their contract.
Prevention tip: This often occurs by mistake when providers are following an outdated fee schedule. Ensure that all fee schedules are verified prior to submitting a claim.
8. Denial Code CO-97: Service Already Paid For
This code indicates that a service being billed has already been paid for by the insurance company. Services that are bundled with other procedures are often mistakenly documented twice.
Prevention tip: Ensure your staff are trained to document appropriate modifiers when necessary. This will help distinguish similar services from one another.
9. Denial Code CO-167: Diagnosis Not Covered
CO-167 is issued when a patient's diagnosed condition isn't covered by their insurance plan. While CO-22 is caused by a poor coordination of benefits, this occurs when the service itself can't be covered.
Prevention tip: Ensure that staff are thoroughly documenting all information related to a patient's condition. This will help insurers verify medical necessity when reviewing a claim.
10. Denial Code CO-286: Appeal Time Limits Not Met
Unlike the other most common denial codes in medical billing, insurance denial code 286 is specifically related to appeals. A provider will receive this code if they miss the deadline to submit one.
Prevention tip: Implement a standardized denial management process to prevent a backlog of appeals from accumulating. This will also ensure that all staff members understand their responsibilities in relation to the appeals process.
Learn More Ways to Boost the Efficiency of Your Services
Now that you're familiar with the most common denial codes in medical billing, you may be seeking more ways to improve the efficiency of your administrative and care services. Use our latest expert-written healthcare management insights to help improve your organizational performance, starting today.