These two common terms are Denied Claim and Rejected Claim. Both these terms are often used to discuss the medical billing claims and are also time and again used interchangeably. But, it is extremely important to understand that Rejected Medical Claims are very different from Denied Medical claims, yes they are not same. Today lets the different between a Denied and Rejected Claims in Medical Billing. Before we jump into that discussion, however, let’s review the difference between a rejected and denied claim.
A Rejected claim has been rejected because of errors. An insurance company might reject a claim because a medical billing specialist incorrectly input patient or insurance information. Rejected claims will not be processed because they are not considered to have been received by the insurance payer, and do not make it into the system. Once a medical billing specialist amends the errors on a rejected claim they can resubmit it for processing with an insurance company.
Reason for Rejected Claims:
- Delay in Filing the Claim:
On a general basis the insurance companies allow a period of 60 to 90 days to file the claim from the time of service. But certain time when the claims are not filed within the stipulated period or long after the date of service, they end up getting rejected
- Preauthorization / Authorization:
For many insurance plans preauthorization is a must. If the healthcare provider provides services without proper authorization the claims get rejected.
- Patient Changes the Insurance Plan:
When a patient changes his or her insurance plan, the provider needs to network the new plan to the system and also get a new preauthorization done for the patient. If the provider fails to do so, the claims get rejected.
- Lost Claim:
It doesn’t matter who replaced it, but if the claim gets misplaced and doesn’t make it to the insurance company’s system on time, the claim will be rejected.
A Denied claim is one that has been determined by an insurance company to be unpayable. Think of a Denied claim as the insurance saying ‘this claim has been sent for processing but has been denied for payment’. Claims are often denied because of common billing errors or missing information, but can also be denied based on patient coverage. Typically, insurance companies explain the reasons in the Explanation of Benefits (EOBs) attached to the claim.
Reason for Denied Claims:
There are plenty of reasons an insurer might deny your claims, but the most common billing errors are also the simplest and easiest to correct. Here are the top three:
- Incorrect and/or incomplete patient identifier information(e.g., name spelled incorrectly; date of birth or soc. sec. number doesn’t match; subscriber number missing or invalid; insured group number missing or invalid)
Solution: Verify patient demographic and insurance information at EVERY visit. Ask permission to photocopy the patient’s state-issued identification (passport, driver’s license, etc.) and insurance card, so that you are sure to have the proper spelling, group numbers, etc., on hand.
- Coverage Terminated:
Verifying insurance benefits prior to services being rendered can alert the medical office if the patient’s insurance coverage is active or has terminated. This will allow you to get more up-to-date insurance information or identify the patient as a self-pay.
- Services Excluded or Non-covered:
Exclusions or non-covered services refer to certain medical office services that are excluded from the patient’s health insurance coverage. Patients will have to pay 100 percent for these services.
This is another reason why it is important to contact the patient’s insurance prior to services being rendered. It is poor customer service to bill a patient for non-covered charges without making them aware that they may be responsible for the charges prior to their procedure.