Denial
A denial is an insurance company's refusal to pay for services rendered, resulting in loss or delay of payment for the healthcare provider.
What is a Denial?
A denial is the refusal by an insurance company or payer to pay for a healthcare claim. This can occur for various reasons, such as missing or incorrect patient information, or coding errors in the claim submission. Effective denial management is crucial for healthcare providers to maintain financial health and ensure proper revenue cycles.
Denial management involves identifying the reasons for claim denials, correcting the errors, and resubmitting the claims for reimbursement. Understanding common denial reasons, like an incorrect date of birth or a mismatched procedure code for a patient's age, allows healthcare organizations to implement strategies to prevent future denials and improve their revenue stream.
What is the difference between a Denial and Claim Adjudication?
Denial refers to the refusal by an insurance company to pay for a healthcare claim, often due to errors or missing information. Claim adjudication, on the other hand, is the process of reviewing a claim to determine if it is valid and how much should be paid.
Denial is an outcome where a claim is rejected, while claim adjudication is the process that leads to a decision on a claim.
Denial management involves correcting errors and resubmitting claims to secure reimbursement. Claim adjudication involves comparing the claim against the patient's benefits and the payer's rules.
Reasons for denial are often related to submission errors (e.g., incorrect patient information, coding errors), while claim adjudication assesses the legitimacy and coverage of the services rendered.
What are examples of a Denial?
A claim for a flu shot is denied because the patient's insurance plan only covers flu shots for individuals over 18, and the patient is 12 years old.
A claim for a surgery is denied because the patient's date of birth on the claim form does not match the date of birth on file with the insurance company.
A claim for a physical therapy session is denied because the submitted procedure code does not align with the diagnosis code provided, indicating a potential coding error.
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