Common Reasons for Insurance Claims Denials (2024)

Clear and comprehensive documentation is the backbone of any successful insurance claim. Missing or inaccurate details about a diagnosis, treatment, or procedure can cause a denial. Information on or submitted with a claim must be accurate and complete. This includes:

  • Patient informationincluding name, date of birth, address, and insurance policy number(s)
  • Provider informationincluding name, address, and National Provider Identifier (NPI) number
  • Codesincluding procedure (must match the provided service or treatment), diagnosis (must be medically necessary and supported by the medical records), and place of service (must match the location where the service or treatment was provided) codes
  • Documentationincluding medical records, prescriptions, and referral forms

COB denials occur when a patient has two or more insurance policies, and there is confusion or lack of clarity about which plan is primary and which is secondary. Many factors can contribute to COB denials, including:

  • Complex payer COB policiesthat can be difficult to understand
  • Incomplete or inaccurate informationon the claim form, like the patient’s insurance information and the dates of coverage for each plan
  • Communication errors between payersto determine and agree on which plan is primary and which is secondary (or tertiary, etc.)

Insurers may deny a claim if they don’t believe the service or treatment was medically necessary or if the provided documentation doesn’t adequately support it — like denying a claim for surgery, stating the patient could be treated effectively with physical therapy. These denials often require appeals to provide:

  • Additional documentation that may include medical records, prescriptions, or referral forms
  • Comprehensive justifications for any treatments or tests ordered
  • Updated or more detailed coding
  • More detailed information about the visit or condition
  • Information specific to that policy’s coverage criteria
  • A “Letter of Medical Necessity” from the physician

Some insurance policies require prior authorization for specific procedures, medications, or medical equipment to be obtained before providing that service or treatment. Examples of services that may require prior authorization include:

  • MRI and CT scans
  • Certain medications
  • Specialist referrals
  • Elective surgeries
  • Durable medical equipment

Insurance plans have specific guidelines on which services or treatments they cover and which they don’t. Common examples of non-covered services or treatments include:

  • Cosmetic or elective surgeries
  • New or experimental procedures
  • Chiropractic care
  • Physical therapy
  • Durable medical equipment
  • Dental or vision care
  • Hearing aids

Most policies also have defined limitations, such as a set number of visits or procedures — for example, a set number of physical therapy visits — allowed per year.

A duplicate claim denial occurs when a claim is submitted multiple times for the same service or procedure performed on the same day. This can happen for reasons such as:

  • A provider submitting a claim multiple times by mistake — more likely to occur when claims are sent manually
  • A billing software or system inadvertently submitting the same claim multiple times
  • Glitches in a payer’s system resulting in duplicate claims processed

You may also see denials for services not paid separately, meaning that service or procedure was included in the payment or allowance for another service or procedure that has already been billed, processed, and paid.

A timely filing denial occurs when a claim is submitted after the deadline, typically 120 to 180 days from the date of service, set by the insurance company.

Reasons a claim may be filed late include:

  • Delays in receiving patient informationor other necessary documentation from the patient
  • Inaccurate or incomplete claimsreturned to the provider for correction
  • Administrative errorssuch as typos or miscoding
  • Lack of knowledgeof, or failing to keep up with, the timely filing deadlines for each insurance company (even rare or out-of-state payers)
Common Reasons for Insurance Claims Denials (2024)


What is a typical reason for a denied claim? ›

The claim has missing or incorrect information.

Whether by accident or intentionally, medical billing and coding errors are common reasons that claims are rejected or denied. Information may be incorrect, incomplete or missing. You will need to check your billing statement and EOB very carefully.

What is the most common source of insurance denials? ›

Six common reasons for denied claims
  • Timely filing. Each payer defines its own time frame during which a claim must be submitted to be considered for payment. ...
  • Invalid subscriber identification. ...
  • Noncovered services. ...
  • Bundled services. ...
  • Incorrect use of modifiers. ...
  • Data discrepancies.

What are the most common claims rejection? ›

Most common rejections

Duplicate claim. Eligibility. Payer ID missing or invalid.

What are the 3 most common mistakes on a claim that will cause denials? ›

Here, we discuss the first five most common medical coding and billing mistakes that cause claim denials so you can avoid them in your business:
  • Claim is not specific enough. ...
  • Claim is missing information. ...
  • Claim not filed on time (aka: Timely Filing)

What are 3 reasons why an insurance claim may be rejected or denied? ›

9 top reasons your claim is denied
  • Incomplete information. Claims often get denied due to incomplete information. ...
  • Service not covered. ...
  • Claim filed too late. ...
  • Coding or billing error. ...
  • Insurer believes the procedure wasn't necessary. ...
  • Duplicate claim filed. ...
  • Pre-existing condition not covered. ...
  • Lack of pre-authorization.
Dec 12, 2023

What is a dirty claim? ›

Dirty Claim: The term dirty claim refers to the “claim submitted with errors or one that requires manual processing to resolve problems or is rejected for payment”.

How often do insurance companies deny claims? ›

“Americans deserve information and data that has relevance to their own personal health and circ*mstances.” The limited government data available suggests that, overall, insurers deny between 10% and 20% of the claims they receive.

What is a clean claim? ›

1. Clean claim defined: A clean claim has no defect, impropriety or special circ*mstance, including incomplete documentation that delays timely payment.

What is a clean claim in insurance? ›

(ii) Clean claim defined In this paragraph, the term “clean claim” means a claim that has no defect or impropriety (including any lack of any required substantiating documentation) or particular circ*mstance requiring special treatment that prevents timely payment from being made on the claim under this part.

What are hard denials? ›

Hard denials cannot be reversed and result in written-off revenue or lost revenue. This type of denial can be appealed if it results from some errors. Soft denials are temporary and can be reversed with the right follow-up action.

What are common errors in insurance claim submissions? ›

Be Diligent. You should always double check your work when you're creating a claim. Simple clerical errors like missing digits or misspelled names can be the difference between an approved and a rejected claim, so go over each claim you create before you send it off.

What are three possible reasons for preauthorization review denial? ›

3 common reasons for medical claim denials
  • Reason 1: Missing or incomplete prior authorizations. ...
  • Reason 2: Failure to verify provider eligibility. ...
  • Reason 3: Code inaccuracies. ...
  • Leveraging AI Advantage to reduce medical claim denials.
Apr 6, 2023

How do I challenge an insurance claim denial? ›

You can start the appeal process by calling your insurance provider. Ask for more details about the denial and review your appeal options. Your insurance agent can walk you through the appeals process to help get you started.

What are the possible solutions to a denied insurance claim? ›

If an insurance company denies a request or claim for medical treatment, insureds have the right to appeal to the company and also to then ask the Department of Insurance to review the denial.

How do you prevent a denied claim? ›

By addressing issues such as inaccurate documentation, coding errors, lack of medical necessity, timely filing limits and insurance coverage problems, providers can significantly reduce claim denials and improve overall financial performance.

What's one of the most common reasons for a claim being rejected by an insurance company quizlet? ›

What is a frequent reason for an insurance claim to be rejected? The procedures are not medically justified by the diagnosis.

What are the two main reasons for denying a claim quizlet? ›

What are the most common reasons for claim denials? 1) billing non covered services 2)lack of medical necessity 3) beneficiary not covered.

What may lead to claim denials or improper? ›

Incorrect or Missing Patient Information

Many claim denials start at the front desk. Manual errors and patient data oversights such as missing or incorrect patient subscriber number, missing date of birth and insurance ineligibility can cause a claim to be denied.

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