In the event that a claim is denied or Payment is reduced, an appeal may be filed to reverse the denial. Each insurance payer has procedures in place to handle the appeals process. A denied claim is not the same as a rejected claim. A rejected claim is one that has not been processed because of problems that were discovered before the claim processing.
A denied claimed is one that had been through the claim processing and determined by the insurance company that it cannot be paid ("Healthcare Claim Processing Medical Billing Errors," 2012). A typically rejected claim would be if the insurance information was not up to date. Since rejected claims have not been processed the claim just needs correcting and can be resubmitted.
Denied claims require an appeal letter to be submitted, usually within a certain period of time. This letter should state why a denied claim should be paid. Some denials are due to coding error such as, incorrect place of a service code ("Healthcare Claim Processing Medical Billing Errors," 2012).
Another reason for a denial would be registration mistakes such as, errors to patient demographic data; age, date of birth, or sex. To improve the rate of paid claims over time, medical insurance specialists track each payer’s reason for denial (Bayes, Newby, Seggern, & Valerius, 2008, p. 463). Tracking the reasons why a claim was denied may provide solutions that will result in less claim denials in the future.
- Bayes, N., Newby, C., Seggern, J., & Valerius, J. (2008). Medical Insurance: An Integrated Claims Process Approach (3rd ed.). Retrieved from http://www.axialibrary/phoenix.edu
- Healthcare Claim Processing Medical Billing Errors. (2012). Retrieved from http://www.all-things-medical-billing.com.