Payers explain denials with claim adjustment reason codes (CARCs) on the remittance advice. The ten below show up again and again. The prevention steps are mostly about catching problems before the claim goes out.
1. Missing or incorrect information (CARC 16)
The claim lacks information or has a billing error, such as a wrong member ID, missing date or mismatched provider details. Prevent it: verify demographics and insurance at every visit and use a claim scrubber.
2. Duplicate claim (CARC 18)
The same service was billed twice, often when a claim is resubmitted while the original is still being processed. Prevent it: check status before resubmitting, and send corrections as corrected claims.
3. Timely filing expired (CARC 29)
The claim reached the payer after its filing deadline. Prevent it: submit quickly and track deadlines. See timely filing limits.
4. Not medically necessary (CARC 50)
The payer decided the service did not meet its medical necessity rules. Prevent it: document why the service was needed and check payer policies for covered diagnoses.
5. Bundled service (CARC 97)
The payer considers the service part of another one already paid. Prevent it: use correct modifiers only when services are truly separate. See modifiers explained.
6. Modifier problems (CARC 4)
The procedure code does not match the modifier used, or a required modifier is missing. Prevent it: train coders on payer modifier rules.
7. Authorization missing (CARC 197)
Precertification or authorization was not obtained. Prevent it: check requirements before scheduling. See prior authorization.
8. Coverage terminated (CARC 27)
The patient's coverage ended before the date of service. Prevent it: verify eligibility before each visit, not just the first. See eligibility verification.
9. Another payer is primary (CARC 22)
Coordination of benefits shows another plan should pay first. Prevent it: ask about all coverage at registration and update it regularly.
10. Diagnosis does not match the procedure (CARC 11)
The diagnosis code does not support the service billed. Prevent it: code from documentation and link the right diagnoses to each procedure.
What to do when a denial arrives
Read the reason, decide if it is correctable, and act quickly. Some denials need a corrected claim, some need an appeal, and some are valid. Tracking denials by reason shows where your process needs fixing. That is the heart of denial management.
Frequently Asked Questions
What is a good denial rate?
Many practices aim for about 5% or lower, though the right target depends on specialty and payer mix.
Should I appeal every denial?
Not every one. Appeal when the denial looks wrong or the service was covered, and fix the cause when it was a billing error.
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