Common healthcare claim denials often stem from administrative errors like missing/incorrect patient information, lack of prior authorization, or coding inaccuracies (e.g., mismatched ICD-10 codes). Other major reasons include services deemed not medically necessary, coverage limitations, submitting claims after deadlines, or duplicate claims.
A rejected claim is typically the result of: A coding error(s), • A mismatched procedure and ICD-10 code(s), or • A terminated patient medical insurance policy.
Claim rejections (which don't usually involve the denial of payment) are often due to simple clerical errors, such as a patient's name being misspelled, or digits in an ID number being transposed.
Causes of Denial
Denial is often rooted in the desire to protect oneself from anxiety and distress. It can occur in response to a variety of situations, including: Stress: Avoiding the reality of a stressful situation to prevent feeling overwhelmed.
Sigmund Freud's Model
The most common medical billing denial codes involve missing or incorrect information (CO-16), duplicate claims (CO-18), mismatched diagnosis/procedure codes (CO-11, CO-4), lack of authorization (CO-15, CO-197), non-covered services (CO-97, PR-96), and timely filing issues (CO-29, CO-27). These codes, often starting with 'CO' (Contractual Obligation) or 'PR' (Patient Responsibility), highlight errors in data, authorization, coding, or submission, requiring providers to correct and resubmit claims.
"The four denials" refers to different frameworks for understanding how people avoid reality, often seen in psychology (denial of fact, impact, accountability, hope) or addiction (denial of behavior, its effects, the need for help, and the possibility of change). In broader contexts, they can relate to denying responsibility (Deny, Deflect, Defend, Diffuse) or philosophical extremes in Buddhism (Monism, Duality, Eternalism, Nihilism). The specific meaning depends on the context, but generally points to a refusal to face unpleasant truths or take responsibility.
Denial serves a few different purposes. First, using this defense mechanism means you don't have to acknowledge the problem. Second, it also allows you to minimize the potential consequences that might result. Denial is sometimes seen more often with certain types of mental health conditions.
Incomplete or Inaccurate Information
Incomplete or incorrect details on the insurance application are one of the most frequent causes of claim rejections. All forms must be completed with honesty and complete transparency.
Here, we discuss the first five most common medical coding and billing mistakes that cause claim denials so you can avoid them in your business:
When talking to an insurance adjuster, avoid admitting fault, speculating on the cause or extent of injuries/damages, giving recorded statements without legal advice, and volunteering extra information like past injuries or unrelated details, as anything said can be used to minimize your claim; instead, stick to basic facts, remain polite but brief, and consider getting legal counsel. Don't sign anything without review, and avoid saying you're "fine" or "okay" immediately after an incident.
Denial code 5 means that the procedure code or type of bill submitted is not consistent with the place of service where the service was provided. In other words, the code or bill does not match the location where the service was performed.
Common denial reasons: Missing documents, missed deadlines, incomplete claim forms, policy exclusions, lack of sufficient evidence, coverage lapses, or failure to follow claim procedures often lead to denial.
The top reasons for healthcare claim denials include missing or inaccurate claims data, authorizations, incomplete or incorrect patient registration data and code inaccuracy.
Insurance carriers issue denials or underpayments for many reasons. The major denial or underpayment classifications are generally technical/administrative, coding/billing, medical necessity (including level-of-care or medical necessity of a procedure or service), and clinical validation.
“Delay is the deadliest form of denial,” said historian C. Northcote Parkinson.
The five stages – denial, anger, bargaining, depression and acceptance – are often talked about as if they happen in order, moving from one stage to the other. You might hear people say things like 'Oh I've moved on from denial and now I think I'm entering the angry stage'.
In my Atlanta counseling and psychotherapy practice I talk with clients about the four types of denial of responsibility, which are denial of fact, impact, accountability and hope. This brief article describes how to recognize and respond to them.
Evaluation: A denial occurs after a claim has been evaluated (adjudicated) by the payer, while a rejection happens earlier in the process—either at the clearinghouse or during the payer's initial validation checks. In a rejection, the claim has not yet undergone full evaluation.
How to Resolve Common Denial Issues