Handling medical billing isn’t always easy, and claim rejections are a frequent challenge. They can delay payments, increase administrative costs, and cause frustration for both providers and patients. However, understanding the various types of rejections in medical billing and using the right strategies can reduce these issues significantly.

What Are Claim Rejections?

Claim rejections happen when there is an issue with the claim's information. They can happen at the clearinghouse or the payer. The claim is returned to the practice for correction. It is different from a claim denial. A rejection does not mean the claim is denied, but it has to be corrected and submitted again. It is important to understand the various reasons for rejections so one can address them quickly and easily. 

Reasons for Medical Billing Rejections

Some of the reasons for claim rejection in medical billing are:

• Incorrect or Missing Information on the Claim Form

Mistakes on claim forms are one of the main reasons claims get rejected. Missing or wrong information often prevents insurance companies from processing claims. For example, if a patient’s date of birth is missing, the claim cannot be entered into the system. Similarly, errors like incorrect provider numbers or insurance details can result in immediate rejections.

To Avoid This:

Double-check every form for accuracy before submission. Make sure all fields are filled out and keep patient records up to date.

• Errors in Billing and Coding

Coding mistakes can cause claims to be rejected. Insurers use specific coding systems, such as ICD-10 for diagnoses and CPT for services. If the code is wrong or missing details, the claim won’t be processed and will be denied.

To Avoid This:

Stay updated with the latest coding guidelines and make sure the correct codes are used. Train staff regularly to reduce errors.

• If the Service Isn’t Covered by Insurance

Claims will be rejected if the insurance plan of the patient doesn’t cover the treatment or procedure.

To Avoid This:

Check the patient’s insurance benefits and coverage before providing services. Communicate with the patient about non-covered services in advance.

• Prior Authorization and Referral Issues

Many treatments require prior authorization from the insurance provider. Without this approval, claims are rejected.

To Avoid This:

Ensure your team knows the insurance provider’s requirements. Obtain and document the necessary pre-authorization before services are provided.

• Duplicate Billing

Submitting the same claim twice is a common issue. Some systems may not flag duplicate claims, which results in rejection.

To Avoid This:

Implement an efficient claims management system that checks for duplicates before submission.

• Timeliness of Filing

Claims submitted after the required filing time are often rejected. Each insurance provider has a specific deadline for claim submission.

To Avoid This:

Submit claims on time. Keep track of deadlines and follow up instantly after treatment.

• Missing Supporting Documentation

Some claims require additional documents, such as medical records, prior authorization, or referral letters. Without these, claims are often rejected.

To Avoid This:

When submitting the claim Attach all necessary documents and have an organized record for easy access.

Common Medical Billing Errors 

Errors in billing and coding are some of the most common issues in billing. Some common errors are:

• Incorrect patient demographics

• Errors in point-of-service codes

• Missing diagnosis or CPT codes

Looking to avoid common mistakes that cause claim rejections? Our medical billing services focus on accuracy to help your claims get approved and paid promptly!

Difference Between Denial and Rejection

Claim denials and rejections may seem similar, but they are entirely different. Let’s explore their differences.

Claim Denials

Claim denials happen when an insurance company reviews a claim and decides not to pay it. It usually occurs due to errors or issues found during the review process. Common reasons for denials include:

• Incomplete provider or patient information

• Missing authorizations

• Services not covered by the insurance plan

• Provider credential issues

• Incorrect point-of-service codes

Claim Rejections

On the other hand, claim rejections occur before a claim is processed. These rejections are often caused by simple errors, like typos or missing information. Some common reasons for rejections include:

• Incorrect billing codes

• Missing patient information

• Duplicate claims

What to Do If a Rejection Happens?

To increase claim acceptance rates, follow a simple, step-by-step process.

Start by reviewing rejected claims to spot common errors. Next, train your staff and set up alerts for quick detection. Afterward, evaluate if changes to your internal processes could help or harm revenue. Use these insights to improve your operations and address areas that need attention.

In the past, denial management was primarily managed by large healthcare systems. However, today, many smaller practices are opting for outsourced billing and claim denial management services to effectively handle rejections. It allows them to stay updated and manage denials efficiently without having to invest in large in-house teams.

At Dilijent Systems, we offer expert revenue cycle management (RCM) services. From medical billing and coding to credentialing, we handle all aspects of the process. Our proven system has helped clients increase revenue, and we’re ready to help you too.

Want to increase your revenue? Let’s talk! Schedule your free consultation today to learn how we can help.

Conclusion

Medical billing can be complex, and rejections are a common problem. By understanding the different types of rejections and taking steps to prevent them, you can reduce the number of rejected claims. By investing in staff training, using advanced billing software, and maintaining accurate patient information, practices can streamline their billing processes and improve their overall financial performance.

Don’t let claim rejections slow you down. With Dilijent Systems by your side, you can get your claims right the first time. Contact us to learn how we can help!

FAQs

What Is a Rejection Claim?

A claim rejection happens when the insurance company won't process your claim. This usually happens because of mistakes like missing or wrong information.

What Are the Types of Denials in Medical Billing?

Denials in medical billing are:

• Clinical

• Technical

• Administrative

What Is the Most Common Rejection in Medical Billing?

The most common rejection happens due to incorrect or missing information on the claim form.

What Should I Do If My Claim Is Rejected?

If your claim is rejected, review the reason for rejection, then correct the issue and submit the claim again as soon as possible to avoid delays in payment.

Can I Resubmit a Rejected Claim?

Yes, you can. Fix the issue and resubmit the rejected claim for processing.

Why might my claim be denied for duplicate billing?

If you have billed for the same service more than once, the insurance company might deny the claim. Make sure you only bill for each service once.

What is EDI rejection in medical billing?

EDI rejections happen when claims have errors like coding mistakes or incomplete documentation. Check codes and submit all necessary documents to avoid this. 

Can I appeal a denied claim?

Yes, you can. Review the reason for the denial, fix any mistakes, and then formally appeal to the insurance company. Be sure to include any relevant documents with your appeal.