The three categories of claim denial are listed below:
Administrative denials
When there is an error in the medical coding that the healthcare provider submits to the insurer, the payor could deny the claim using their standard denial management workflow. Errors in the claims generate denial codes, which serve as indicators of the nature of the issue. The payor will issue denial codes such as Contractual Obligation (CO), Patient Responsibility (PO), and Other Adjustment (OA). These denial codes serve as indicators for the corrective action required of the provider.
Clinical denials
When the payor adjudicates that the patient's treatment was not medically necessary, the payor can issue a clinical claim denial. The criteria to form this denial management adjudication depend on the payor policies, the insurance policy, and the patient. Other factors such as the duration of the policy, insurance coverage, and length of the treatment are also used in the determination.
Policy claims denials
The policy details might not cover certain aspects of the treatment or itself. For example, a patient might have an insurance plan without coverage for certain medication or procedure types, and Payors could deny claims on this ground.
How to manage denials using a healthcare denials management solution?
A healthcare denial management software system can automate the management of denied claims. The system can identify potential denials and rectify them to increase the chances of reimbursement. The system can help providers improve their appeals. The system can also leverage analytics to spot trends and provide actionable insights so that providers may use this information to create successful claims.
Conclusion
Although denial of claims is an indispensable part of healthcare delivery, providers can increase their chances of reimbursements by using a custom denial appeal management software software solution.