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Key Strategies to Reduce Claim Denials


Claim denials can be complicated at most and confusing at best. Conquering the rules and regulations of medical billing and coding is one of the biggest challenges in the fight against denials and clean claim submissions. It's extremely important that medical practices ensure claims are filed appropriately the first time.

A denial management action plan is critical for practice success. Inaccurate claim submissions result in claim denials, which in turn causes delayed payments and extra work for staff. According to published statistics from MGMA and Change Healthcare, the approximate cost of reworking a claim is $25.20. This cost can turn into a huge expense for the practice.

The Change Healthcare's 2020 Revenue Cycle Denials index indicates that 11 percent of claims are denied upon initial submission. The report further contends that 86 percent of all denials are potentially avoidable, while 14 percent are unavoidable.

Why are denials increasing? Many industry professionals believe COVID-19 slowed the release of many payer policy updates and changes that were in the works prior to the public health emergency. Those changes and updates are now being released. Other contributing factors include insufficient staff training, staff turnover, lack of adequate resources, and an absence of effective denial management policy.

Denials can typically be placed into a few different categories, including:

Front-End Demographic and Eligibility Denials: This includes denials for claims with incomplete and/or inaccurate patient demographic and/or insurance information. The Change Healthcare index states that approximately 27 percent of the denials are related to registration and eligibility, which is consistent with 2017 report.

  • It's critical that front office staff know and understand the types of healthcare coverage and different insurance network requirements.
  • Staff should always ask about additional coverage. If the patient has more than one insurance policy, staff should understand the importance of sequencing primary and secondary coverage.
  • Patient registration data should be reviewed for completeness and accuracy.
  • Eligibility should always be confirmed prior to claim submission. Changes and/or differences in coverage can't and shouldn't be left up to the patient to disclose.

Preauthorization/Precertification/Medical Necessity Denials: This includes claims that were denied due to preauthorization not being obtained or preauthorization being obtained for an incorrect procedure. It also includes claims that were denied for medical necessity or non-covered services. Payers have expanded the number of services that require prior authorization and can sometimes change the rules unexpectedly.

  • It is critical that staff ensure the correct CPT code is being preauthorized. If there is a possibility of an additional procedure or multiple procedures being performed, obtain prior authorization for all CPT codes when possible.
  • Make sure the preauthorization number is included on the claim form.
  • Patient's charts should include documentation reflecting date and time prior authorization was obtained, as well as method used (i.e. automated phone line, website, telephone, etc.).
  • If the prior authorization is obtained via telephone, always document the name of the representative or employee identified on the call, the date and time, and a reference number for the call.
  • Language used by many insurance companies can be vague or unclear. Medical necessity is one of the most common reasons given for denial. Staff should familiarize themselves with payer policy exclusions and limits.

Coding Denials: This includes claim denials with Local Coverage Determination (LCDs) requirements not being met, bundling issues, or coding errors.

  • Accurate and specific clinical documentation is essential to show relevance, support treatment and level of care on the procedure.
  • Ensure coding staff is skilled in your specialty and current on all updates and/or coding changes.
  • Educate providers on LCDs, payer specific requirements, and bundling issues that could affect your practice.
  • Many practices have seen an increase in the number of medical records requests from payers. Staff should look for trends in the type of requests, as well as make sure they are sent in a timely manner.

Billing Denials: This includes claims that were submitted past filing limits, claims with missing or incomplete claim data, duplicate claims, and claims in which payer specific guidelines were not followed.

  • Staff should be aware of payer specific guidelines for timely filing limits.
  • Remark codes on remittance advice can be helpful when trying to identify the missing information.
  • Ensure staff is not submitting duplicate claims.
  • Make sure all CPT and ICD-10-CM codes are effective for the date of service being billed.
  • Verify there are no missing payer IDs.
  • Make sure billing software is utilized to its fullest capabilities. Claim edits should be reviewed to make sure they are current and kept up to date.

Consistency, vigilance, and persistence are the keys to success. Clean claims submission and clearing house rejection reports should be monitored daily. The appropriate manager or director should monitor trends and respond proactively to prevent future denials. Make certain that denials are addressed not only by high dollar amounts but by volume, as well. Issues should be corrected in real-time and prior to initial claim submission when possible. Don't hesitate to escalate your concerns by reaching out to a payer provider representative or a payer supervisor when the situation warrants.

Stacey Stuhrenberg, CMPE, CPC, CPB, CPMA, CPPM, CEMC, CHCO, is a senior consultant for coding and compliance at Kraft Healthcare Consulting, which has developed programs and techniques to ensure compliance while also making sure clients are not leaving money on the table. Stacey can be reached at (615) 346-2455 or


Kraft Healthcare

Kraft CPAs


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Change Healthcare, Claims Denial, Kraft Healthcare, KraftCPAs, Revenue Cycle Management, Stacey Stuhrenberg
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