Denial management
Denial Management Services and Appeals
We review each denial and correct or appeal it within the payer’s deadline. Then we trace it back to the step that caused it, so the same problem is less likely to return.
How we handle denials
- Categorize by reason code
- Correct and resubmit
- Appeal with documentation
- Track to resolution
- Report on root causes
How does denial management work?
Denial management means working out why a payer turned a claim down, fixing or appealing it before the deadline, and stopping the same denial from coming back. Every denial arrives with codes: a group code that shows who is responsible, a claim adjustment reason code (CARC) that shows why, and often a remittance advice remark code (RARC) with more detail. We sort denials by these codes, by value and by deadline. Some need only a corrected claim, such as a wrong modifier or a missing authorization number. Others need a written appeal with medical records and a clear argument. A few are better written off, and we tell you which ones and why. Each denial is then traced back to the step that caused it, whether that was registration, eligibility, coding or documentation. We report those root causes to you regularly, so your team can adjust the process and fewer claims come back denied.
The problem
Why denials are expensive
A denial means more than a late payment. Someone has to research it, redo the claim and follow up. Many denials are simply never worked.
How we handle it
Our denial management approach
We treat denials as both a queue to clear and a signal to act on.
- Regular review of denials from ERAs and correspondence
- Categorization by CARC/RARC and payer
- Corrected claims for fixable errors
- Reconsiderations and formal appeals
- Prioritization by value and deadline
- Root-cause analysis by category
- Feedback to front desk, coders and providers
- Denial trend reporting
Understanding denials
How to read a denial
Payers explain adjustments with Claim Adjustment Reason Codes (CARCs), grouped by who is responsible for the amount, and often add Remittance Advice Remark Codes (RARCs) with more detail.
| Group code | Meaning | Typical next step |
|---|---|---|
| CO (Contractual Obligation) | The provider is responsible; the amount generally cannot be billed to the patient | Correct and resubmit, or appeal if the adjustment is wrong |
| PR (Patient Responsibility) | The amount is the patient’s share (for example deductible or coinsurance) | Verify, then bill the patient or secondary coverage |
| OA (Other Adjustment) | An adjustment that does not fall under the other groups | Review the reason code to decide |
| PI (Payer Initiated) | A payer adjustment not tied to the contract or the patient | Review; appeal where appropriate |
Common reasons include missing or invalid information (CARC 16), services bundled into another procedure (CARC 97), medical necessity (CARC 50), missing prior authorization (CARC 197), duplicate claims (CARC 18) and timely filing (CARC 29). Read more in our guide to reading claim denials.
Appeals
Appeals that are documented and tracked
When a denial is wrong, a well-supported appeal is often the only way to recover the payment. We prepare appeals with the relevant documentation, submit them within the payer’s deadline and track each one to a decision.
Deadlines and levels vary by payer. Medicare, for example, has five levels of appeal, starting with a redetermination that generally must be requested within 120 days of receiving the initial determination.
- Denial reason and deadline confirmed
- Medical records and supporting documents gathered
- Appeal letter written for the specific denial reason
- Submission through the payer’s required channel
- Follow-up until a decision is issued
- Outcome logged for trend reporting
Process
How a denial gets resolved
Identify
Denials are pulled from remittances and payer correspondence as they arrive.
Analyze
The reason code, documentation and payer rules are reviewed.
Resolve
Depending on the reason, the claim is corrected, sent for reconsideration or appealed.
Prevent
The cause is fed back to the right step in the cycle.
Why it matters
What good denial management delivers
FAQ
Denial Management Services and Appeals: common questions
What is the difference between a corrected claim and an appeal?
A corrected claim fixes an error on the original claim, such as a wrong code or missing modifier. An appeal asks the payer to reconsider a decision you believe was wrong, usually with supporting documentation.
Which denials should be appealed?
Denials where the service was covered, medically necessary and properly documented are usually worth appealing. We weigh the amount, the reason and the deadline, and discuss write-off recommendations with you rather than deciding alone.
How do you prevent denials?
We track denials by cause and fix the step that created them. That might mean adding an eligibility check, tightening authorization tracking, adjusting a coding rule or clarifying what providers need to document.
Related services
Services that work alongside denial management
Let’s take a closer look at your revenue cycle
Tell us what’s getting stuck. Denials, old A/R, credentialing, reports nobody reads? We’ll look at how you work now and tell you straight what we’d change, and why.