Insurance denials are a great cause of frustration for medical providers. The numbers paint a grim picture: reports have shown that the denial rates for some organizations are as high as 20%. In other words, one in every five medical claims has to be investigated and reworked.

Here’s the truth: reducing denials to zero is probably impossible, but decreasing them even by a fraction will have a significant impact on your bottom line. Here are the most common reasons for insurance denials and what you can do to avoid them.

1. Collect Accurate Patient Information

Registration errors are by far the most common reason that leads to denials. Something as simple as recording the wrong gender can cause insurance companies to deny a claim.

To prevent registration errors, you must ensure that you have the correct information on your patients from the moment they call for an appointment. Check their insurance eligibility over the phone and then reconfirm the information with them when they arrive for their appointment. Although it might seem unlikely, there is a chance that their coverage will change from the moment they’ve called for a consultation to the actual visit.

You need to make sure that the service they are inquiring is included in their plan’s benefit. Also, check past reporting and see if the number of maximum sessions allowed for an individual service, such as physical therapy, has not been exceeded at the moment of the appointment.

2. Look out for Coding Errors

Another common reason that can lead to denials is failing to code diagnosis with precision. More often than not, providers use the wrong procedure code, which can lead to confusion and result in the denial of the claim.

Another major reason for claim denials is inappropriate diagnosis codes used along with the CPT codes. The experience of many organizations is that outsourced billing companies such as Med-Strategies have mechanisms to address these issues before the claims are submitted. This could be based on both the experience of the team as well as the automation of the processes involved to address these issues before the claims are submitted.

In addition to the above, not having a clear understanding of appropriate modifiers to use as well as unbundling of claims cause frequent claim denials and follow-up time wasted by many staff members.

Try to determine your organization’s most common services and address the coding issues around them by payers guidelines to prevent future coding errors.

3. Keep track of the Various information Needed on a claim based on the reason for Patient visit

If your front office staff does not enter the complete information on a patient into your organization’s system or fails to confirm the data with them, then that can lead to registration errors. Some of the most common type of information that is missing includes specific dates, such as the date of accident, cause of accident, or payer responsible for paying this claim.

This error can be avoided by setting up a notification procedure in your management system that alerts your staff to fill out the necessary information before a patient leaves your organization.

4. Know Your Payers

While many common insurance denials are the result of simple registration errors, not keeping up with payer policy changes results in claim denials that impacts streamlined practice cash flow. Most practices who use in house billers do no pay attention to all of the policy changes emanating from payers as the billing staff is distracted with other issues or do not have the experience to understand or implement policy changes. Organizations such as Med-Strategies have specific team members focused on addressing and implementing policy changes so that these can be addressed timely without impacting streamlined revenue flow for the practice.

5. Prepare Your Practice for Denials

As much as you’re trying to minimize errors and reduce the possibility of medical billing denials, there are moments when they are unavoidable. When that happens, you need to be prepared to know how to manage them efficiently.

Sure, it’s easier to write-off denials than to appeal them, but keep in mind that when you do that you’re practically leaving money on the table. In spite the headaches it creates, each appeal has major potential for reimbursement. In fact, the success rate for appeals varies from 55% to 98%, but around 35% of healthcare organizations never make an appeal. Create an appeal letter template that you can use for your most common denials. Use tools that can help you to automate the appeal process and keep track of its progress. Last but not least, make sure you know the payers’ appeal deadlines so that you can prepare everything you need in time.


Bad things usually don’t come alone. Medical providers are losing millions of dollars due to insurance denials. And, all this happens in a healthcare environment that is more volatile than ever with massive funding cuts. By reducing the number of denials, you can improve your reimbursement rates and your bottom line with it.