Rejections and denials are not the same
A rejection happens before a claim is accepted for processing — the clearinghouse or payer bounces it for missing or invalid data. It was never adjudicated, so it can be corrected and resubmitted. A denial is a processed claim the payer refused to pay, in whole or in part, with a claim adjustment reason code (CARC) explaining why. Denials need either a corrected claim or an appeal, and they have deadlines. Treating the two the same way is one of the most common reasons claims age.
How to measure your denial problem
Start with your denial rate — denied claims divided by claims processed in the same period — and then split it two ways: by reason code and by payer. A single overall number hides the useful information. Ten percent of claims denied for eligibility is a front-desk problem; the same rate for bundling is a coding problem; a spike with one payer may be a policy change. Track how many denials are worked, how many are paid after appeal, and how long they take.
Prevention beats appeals
An appeal recovers one claim. Fixing the cause protects every claim after it. For each denial category, the fix belongs at the stage where the problem started:
- Registration and eligibility: verify coverage electronically before each visit, update insurance at every check-in, and identify secondary coverage.
- Authorization: check requirements by code and plan, and compare the approved codes with what was performed. See prior authorization.
- Coding: run NCCI and payer edits before submission, and use modifiers only with supporting documentation.
- Submission: work clearinghouse rejections daily and keep proof of timely filing.
- Payer behavior: when one payer starts denying a code it used to pay, check its published policy and contact the provider representative.
How appeals work
For Medicare Part B, the first level is a redetermination by the Medicare Administrative Contractor, requested within 120 days of the initial determination; the second is a reconsideration by a Qualified Independent Contractor within 180 days of the redetermination decision; later levels are an administrative law judge hearing, the Medicare Appeals Council and federal court. Simple clerical errors can often be fixed through a reopening instead of an appeal. Commercial plans set their own levels and deadlines in the provider agreement and manual. Strong appeals are specific: they quote the payer’s own policy, attach the records that meet it and ask for a defined outcome.
Where we fit
We work denials as part of medical billing or revenue cycle management: every denial is categorized, corrected or appealed, and summarized monthly by reason and payer with the upstream fix. For the meaning of individual codes, see our claim denial codes guide.