Everything You Need to Know About Claims Denials: Causes, Prevention, ANSI Codes & More

Everything You Need to Know About Claims Denials: Causes, Prevention, ANSI Codes & More

ED (or emergency department) claims denials are a common occurrence in medical facility coding and billing when the payers (or insurance providers) deny a claim for reimbursement. This article dives into the most common causes for these denials, how to prevent them with denial management services, and related topics, such as ANSI codes and the definitions of appeal versus rebill.

Main Factors Causing ED Denials

• The coding is incorrect or has errors, such as a missing modifier, unsupported level selection, or invalid diagnosis.
• Coders billed CPT codes together that should not be submitted at the same time due to NCCI (National Correct Coding Initiative) edits.
• The coder, software scrubber, or EHR system has not been updated on a recent update or edit that affected correct coding.
• The organization’s billing system is not current, and does not suggest the proper edits.
• Payers issue new rules or changes to current rules that dictate they no longer cover that service.
• Ongoing contract negotiations between the facility and insurance provider.

Each denial will include an ANSI code. Coders use American National Standard Institute (ANSI) codes to explain the reasoning behind the claim denial. Furthermore, with the system of ANSI codes, there are two classifications: Claim Adjustment Reason Codes (CARCs) label why an adjustment was issued for a claim; and Remittance Advice Remark Codes (RARCs) provide additional explanation out the adjustment. Additionally, coders can refer to online ANSI dictionary examples like this for descriptions of all ANSI codes.

Read our previous article on medical billing denials for more information about denials and how to prevent them.

How to Prevent & Reduce Claims Denials

• Ensure the billing system has the latest coding and edits updates. Implement system updates more than once a year, if applicable.
• Provide the coding team with thorough, continued education on the annual coding updates and other popular medical topics.
• Conduct trending denials audits to record the most common types of denials that the organization encounters. YES HIM Consulting’s trending denials reports provide clients with recommendations to prevent and reduce such denials. Either through tailored coder/provider education programs, template consulting, and/or front-end edits.

After the payer issues a denial, the organization has the opportunity to appeal or rebill. In an appeal, the facility will state their case to the payer with documentation to support their code selections. In a rebill, the facility will correct the error, and resubmit the bill.

With 96% of denied claims recovered on average, YES HIM Consulting’s denials remediation services help clients recover millions of dollars. Our list of denial management services includes clinical appeals, coding appeals, complex denials, education and coder mentoring, and clean claims program. Contact our team today.