Introduction
Medical claim denials are a significant challenge for family medicine practices, affecting both revenue cycle and patient care. When claims are denied, practices face delayed payments, increased administrative workload, and potential patient dissatisfaction. According to industry data, between 5-10% of medical claims are denied on first submission, with each denial costing practices an average of $25-30 in administrative costs to resolve.
For family medicine practices operating on tight margins, understanding the most common denial reasons and implementing preventive strategies can significantly improve financial performance. This blog post explores the top 10 denial codes in family medicine, providing insights into their causes and practical prevention strategies.
Common Denial Codes in Family Medicine
Below is a table outlining the top 10 denial codes that family medicine practices commonly encounter:
| Denial Code | Description |
|---|---|
CO-16 | Claim/service lacks information or has submission/billing error(s) |
CO-18 | Exact duplicate claim/service |
CO-22 | This care may be covered by another payer per coordination of benefits |
CO-27 | Expenses incurred after coverage terminated |
CO-29 | The time limit for filing has expired |
CO-45 | Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement |
CO-50 | These are non-covered services because this is not deemed a medical necessity |
CO-167 | This (these) diagnosis(es) is (are) not covered |
CO-197 | Precertification/authorization/notification absent |
CO-204 | This service/equipment/drug is not covered under the patient’s current benefit plan |
Detailed Analysis of Top Denials
1. Denial Code: CO-16
Description: Claim or Service Lacks Required Information or Has a Billing Error
This is one of the most common denial reasons in family medicine, occurring when claims are submitted with missing, incomplete, or incorrect information. Common issues include missing patient demographics, incorrect insurance ID numbers, missing referring physician information, or incorrect procedure and diagnosis codes.
Prevention:
- Check patient and insurance details at every visit. Make sure all the information is current and filled in correctly.
- Use claim-checking tools. These can help catch missing or incorrect info before the claim is sent.
- Train staff on common errors. Help front desk and billing teams understand which parts of the form are often missed or filled out incorrectly.
- Review denied claims regularly. Look for patterns so the same mistakes don’t happen again.
- Verify insurance online. Confirm coverage before submitting the claim to avoid delays.
2. Denial Code: CO-50
Description: Services Not Deemed Medically Necessary
This denial happens when the insurance company decides that the service provided was not needed based on the patient’s condition. It can also occur if the provider’s documentation doesn’t clearly explain why the service was needed. In family medicine, this is often seen with preventive care, routine screenings, or certain tests that aren’t supported by enough medical detail in the notes.
Prevention:
- Document patient symptoms and clinical reasoning. Make it clear why the service or test was needed based on what the patient reported and what was observed.
- Check insurance guidelines. Medical necessity rules vary by payer, so it’s important to know what each one requires.
- Use tools that guide care decisions. These can help providers follow clinical guidelines for testing and treatment.
- Get prior authorization when needed. Some services require approval even if they seem necessary.
- Train providers on documentation. Teach them how to describe the patient’s condition in a way that supports the need for the service.
- Consider internal reviews. For more complex cases, review the documentation before the claim is submitted.
3. Denial Code: CO-18
Description: Exact Duplicate Claim/Service
This denial happens when the same claim is submitted more than once. It often occurs when staff resend a claim due to delayed payment without checking the claim status first, or when more than one person submits the claim by mistake.
Prevention:
- Track submitted claims. Use a system that shows the current status of each claim to avoid unnecessary resubmissions.
- Create a clear follow-up process. Set rules for when and how staff should follow up on unpaid claims.
- Train staff on checking claim status. Make sure they verify whether a claim is still processing before sending it again.
- Use software with duplicate alerts. Some billing tools can warn you before a duplicate claim is submitted.
- Assign claim follow-ups to one person or team. This helps avoid confusion and multiple submissions.
- Audit billing workflows regularly. Look for patterns that might be causing duplicate submissions and adjust as needed.
4. Denial Code: CO-22
Description: Claim Denied due to Coordination of Benefits(COB)
This denial occurs when a patient has more than one active health insurance policy, but the claim is sent to the wrong one first. Insurance companies follow rules about which plan should pay first, called Coordination of Benefits. If the primary insurer is not billed first, the claim will be rejected until it’s submitted in the correct order. This is common in family medicine when patients are covered by more than one plan, such as through a spouse or when children are covered under both parents.
Prevention:
- Ask patients about all insurance plans. Don’t assume there’s only one — ask clearly if they have any secondary coverage.
- Verify which plan is primary. Use tools or contact insurers directly to confirm which one should be billed first.
- Update insurance details often. Insurance coverage can change, so check regularly — especially at the start of the year.
- Train front desk staff to ask follow-up questions. A quick extra question during check-in can help catch dual coverage.
- Keep clear notes in patient records. Document which plan is primary and secondary to avoid repeat errors.
- Use a checklist for patients with more than one insurance. This keeps billing organized and avoids unnecessary denials.
5. Denial Code: CO-29
Description: The Time Limit for Filing Has Expired
This denial happens when a claim is sent to the insurance company too late. Each payer has its own deadline for when a claim must be submitted after a service is provided — some allow 30 days, others may allow up to a year. If the claim is submitted after that deadline, it is likely to be denied. Family medicine offices often deal with many insurance plans, which can make keeping track of deadlines a challenge.
Prevention:
- Keep a list of each payer’s filing deadlines. This helps staff know how much time they have for each claim.
- Use a tracking system. A tool that alerts staff as deadlines get closer can prevent missed submissions.
- Send claims quickly. Try to submit claims soon after the patient’s visit to avoid last-minute delays.
- Watch for rejections. If a claim is rejected, act fast to correct and resubmit it before the deadline.
- Train staff on timely charge entry. The sooner services are entered and coded, the sooner billing can happen.
- Evaluate your billing process. If your team struggles with on-time submissions, you might consider extra help or tools.
6. Denial Code: CO-45
Description: Charge Exceeds Fee Schedule or Maximum Allowable Amount
This denial occurs when the amount billed for a service is more than what the insurance company has agreed to pay. Instead of denying the entire claim, the payer usually makes a reduced payment based on the fee schedule in your contract. In family medicine, where reimbursement can already be tight, these adjustments can impact overall income if they happen often.
Prevention:
- Keep your charge rates updated. Make sure the prices you bill match what’s listed in your contracts with payers.
- Review payer fee schedules. Know what each insurance plan allows for common procedures.
- Watch for contract updates. Payers sometimes change what they’ll pay — stay informed.
- Audit your billing regularly. Compare what you’re billing to what’s allowed and adjust if needed.
- Use contract tracking tools if possible. These can help keep all payer information organized.
- Discuss contract terms with payers. If a contract consistently pays too little, consider renegotiating.
7. Denial Code: CO-197
Description: Precertification/Authorization/Notification Absent
This denial happens when a service is done without getting the required approval from the insurance company ahead of time. In family medicine, this often applies to referrals, certain lab tests, imaging, procedures, or medications. If prior approval isn’t given, the claim may be denied or delayed.
Prevention:
- Keep a list of services that need approval. Know which tests, treatments, or referrals require authorization for each insurance plan.
- Review patient needs before their visit. Check if anything planned requires pre-approval.
- Assign a staff member to handle authorizations. Having a go-to person can reduce missed steps.
- Use electronic systems when available. Some payers allow faster online requests.
- Have a plan for urgent cases. Set up a quick process for last-minute approvals when needed.
- Record all authorization details. Save reference numbers and who you spoke to in case you need them later.
- Check the status before providing the service. Follow up on pending requests to avoid denials.
8. Denial Code: CO-204
Description: Service Not Covered Under the Patient’s Current Benefit Plan
This denial shows up when the service provided is not part of what the patient’s insurance plan covers. In family medicine, this might include certain preventive services, wellness visits, or treatments that are considered alternative or not part of the standard benefit package. If the service is excluded in the plan details, payment won’t be made.
Prevention:
- Check coverage before the visit. Confirm that the service is included in the patient’s plan.
- Keep a list of services that are often not covered. This helps staff spot possible problems ahead of time.
- Make benefit checks part of your regular workflow. Before providing care, verify what’s included.
- Use insurance tools to check eligibility. Many payers have systems to look up what’s covered.
- Have patients sign waivers when needed. If you know a service isn’t covered, get their consent before proceeding.
- Talk with patients about their plan limits. Let them know in advance what they may need to pay for out of pocket.
- Offer payment options. If a patient wants the service anyway, consider payment plans to reduce financial stress.
9. Denial Code: CO-27
Description: Expenses Incurred After Coverage Terminated
This denial is triggered when services are billed for a patient whose insurance was no longer active on the date the care was given. It’s a frequent issue in family medicine, where patients may come in unaware that their plan ended or changed. This can lead to unpaid claims and unexpected costs for both the provider and the patient.
Prevention:
- Confirm insurance status before the appointment. Don’t rely on old records—check every time.
- Ask clear questions during check-in. Patients might not realize their plan changed unless directly asked.
- Use an electronic verification tool. It helps confirm if the coverage is still active, even on the same day.
- For walk-ins, pause to verify. A quick insurance check before the visit begins can avoid billing issues.
- Flag patients with regular visits. Create reminders to re-check insurance for patients seen often.
- Have a policy for inactive coverage. If coverage is expired, have clear steps for rescheduling or discussing payment.
- Talk to patients about keeping insurance info updated. A simple reminder can help prevent problems later.
10. Denial Code: CO-167
Description: This Diagnosis Is Not Covered
This denial shows up when the diagnosis code used on a claim is either not recognized by the payer as appropriate for the service provided or is excluded from the patient’s insurance plan. In family medicine, it often applies to routine exams, screenings, or services tied to diagnoses that aren’t considered valid for coverage.
Prevention:
- Connect the diagnosis directly to the service. Notes should clearly show why the service was needed based on the patient’s condition.
- Make sure coding is specific. Avoid vague or “unspecified” diagnosis codes when better options exist.
- Help providers choose the right codes. Provide coding resources or quick-reference guides for common payer rules.
- Stay updated on what payers accept. Some insurers have unique lists of approved diagnosis codes for each procedure.
- Include related conditions. If a patient has other health issues that support the service, document those too.
- Look back at past denials. Patterns can help identify which diagnosis codes are often rejected.
- Provide regular training for staff. Short sessions on accurate coding can help reduce this type of denial.
Conclusion
Effectively managing claim denials is crucial for the financial health of family medicine practices. By understanding these top 10 denial reasons and implementing the suggested prevention strategies, practices can significantly reduce their denial rates and improve their revenue cycle.
Remember that denial management is an ongoing process that requires regular monitoring, staff education, and workflow adjustments. Consider implementing a comprehensive denial management program that includes:
- Regular denial tracking and analytics
- Root cause analysis for recurring denials
- Staff training on prevention strategies
- Clear accountability for denial resolution
- Performance metrics and goals for denial reduction
With a proactive approach to denial management, family medicine practices can minimize revenue leakage, reduce administrative costs, and ultimately improve both their financial performance and patient satisfaction.