Dealing With Denials in Medical Billing

The increasing number of medical coverage plans offered by health insurance companies has complicated the process of medical billing. The complexities of the process can give rise to medical billing errors that can lead to claim denials.

Medical billing denials occur when the insurance company or payer refuses to honor a request by an individual to pay a healthcare provider for the services they have rendered.
Managing denials is one of the most frustrating tasks that your in-house medical billing team can experience. Not only can it waste the valuable time that you could have dedicated to your patients, but it can cost you a lot of money as well. Some frequent causes of denials in medical billing include incomplete information and errors in billing.
Here are some steps that you can take in effectively managing denials:


Your in-house medical biller is primarily responsible for filing claims and managing denials. Therefore, he/she must have the necessary training on the steps they need to take to handle denials appropriately. This will help you avoid denials. However, if your claim does get rejected over missing information, your staff should be quick in contacting the patient so that the matter can be resolved on an immediate basis.


Timing is one of the key factors in managing denials. If you promptly respond to denials, there is a high chance for you to receive your claim. Your office should have a structure in place to forward denials to the appropriate person. You should have an automated system for placing denials into work, as this is the quickest method. However, if you don’t have an automated system, you may respond via email or letter. Many insurance companies offer a time window, but it is quite short. Hence, you must act quickly to get your reimbursement.


It is a highly recommended practice to keep a copy of your document submissions and changes as proof. When you file a claim electronically, you can print a copy of the report. This way, you can keep a record of the information on the claim you submit, such as the date, medical codes, etc. For example, if the payer denies your claim for late submission, you can use this copy as proof and appeal for reimbursement.


If the health insurance company refuses to pay a claim, you can use your right to appeal and ask the payer to reconsider its decision. An external party will review this appeal. The policy requires insurance companies to provide why your claim was denied. The insurer will also have to brief you on how to dispute their decision.

Generally, there are two ways to appeal a medical claim denial:

  • Internal Appeal: The right to an internal appeal means that you can request the insurance provider to thoroughly review their decision and fair manner. You can also ask the insurance company to expedite the process if your case is urgent.
  • External Review: You can also take your appeal to an external party for review. In an external review, the insurance company does not get to make the final decision on whether to pay a claim.


Following up on appeals is an important step in managing denials. If your appeal is denied, then it is time for you to proceed to the next level of appeal. If you find that the payer always denies a particular service, then you should work to establish the root cause. Some key questions that you need to ask are:

  • Are the services reported using the method indicated by the payer?
  • Does the contract with the payer outline why the denied service(s) is always included with another service?

Setting up an appeal tracking system will help you identify medical billing denials patterns.


A tracking or reporting system can be used to conduct insightful analysis. Your objective should be to collect data that you can work on in the future to implement improvements to your existing procedure. For instance, if you have your office in multiple locations and one particular location has significantly lower medical billing denial rates, then you can scrutinize their procedures to improve performance at other facilities.


If the cause of the denial is the termination of the patient’s insurance coverage, then it is best to get in touch with the patient. It is often the case that patients fail to notify your billing staff when they have an insurance change. A call from your office will prompt them to inform you of any such change. Once you have the updated information, you can resubmit your claim and receive your money.

You must develop a system you will use every time you receive this form of denial. This will allow you to save time in figuring out what to do and the denial can be resolved quickly.


Medical billing services have automated software that optimizes the process of managing denials and uses algorithms to perform predictive analysis. This helps identify claims that can be denied and address the errors before submission. An efficient clearinghouse will also help speed up the process of resolving denials.


Many healthcare providers, including doctors, physicians, and hospitals lack the skills and expertise to manage denials effectively. With constantly changing government regulations and payer policies, outsourcing your medical billing to experts, such as PCS – Revenue Cycle Management can be a smart and profitable move. Our highly trained, experienced, and specialized team will ensure that your denials reduce by 80% so that you no longer have to bear the additional responsibility. This means you can better focus on providing your patients with the dedication and attention they deserve!

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