What is the difference between a rejected claim and a denied claim? What needs to be done in each case?

The two most misunderstood terms in medical billing and healthcare reimbursements are claim rejection and claim denial. Many people use these terms interchangeably, but the terms carry distinct meanings.

Denied Claims

The claims that were received, processed, and found faulty during the processing stage by an insurance service provider are deemed unpayable. These unpayable claims are known as denied claims.

Some of the most common issues leading to the denial of a claim include:

• Missing/Invalid Information: Blank fields, missing modifiers, Prior Authorization, National Drug Code etc
• Inclusive, that is, benefits for service are already covered in another service.
• Non Covered, not eligible for claims as per payer-patient contracts.
• Time-Limit for filing has exceeded.

A simple resubmission of a denied claim could result in another denial. The reason why the claim was denied for the first time, must be known, before submitting the claim again. A denied claim can be appealed and sent to the payer with all the corrections needed. If submitted again, without reconsideration request and corrections, it falls into the category of a duplicate claim and is denied. The process can be laborious and time-consuming since you have to dig in to know the root cause of the issue.

Resubmission of the denied claim must be submitted within stipulated timelines specified by the payer. Claims submitted after that are simply denied and remain unpaid, making it a provider liability. A good medical billing company can help get a clean claim in your first appeal.

Rejected Claims

When a claim is submitted, it is checked against the requirements specified by the payer before moving on to the processing stage. If it fails to meet the specified requirements, the claim is rejected. That is, the payer doesn’t accept the claim request, and the data is not entered into the computer systems.

The issues leading to the rejection of a claim may include:

• A coding error
• A mismatched procedure, and ICD code(s).
• A termed patient policy
• The inaccuracy of the medical documents

For example, a transposed digit from the patient’s insurance ID.

A rejected claim is sent back to the biller for corrections. A rejected claim is open for resubmission after the necessary correction. Timely submission is a key-factor when resubmitting the claim. You must meet the timeline specified by the payer for the request to be considered. Failing to do so, the issue of timely filing denial can be raised, leading to the unpaid claim and making it a provider liability. Choosing a professional billing firm can help you stay on top of your claims submissions at all times.

Atlantic RCM is one of the leading multi-specialty medical billing companies in USA that serves 25+ major medical billing specialties. Our experts work across your practice in billing, collections and account receivables management, to help you succeed.

Get in touch with the leading medical billing outsourcing company to learn more. Call us at (469) 501-1500 or write to us Info@atlanticrcm.com