A denied claim isn't lost money yet, but every one costs staff time to fix, and many are never reworked at all. The good news is that most denials come from a short list of causes, and most of those causes start before the claim is even created.
What are the most common reasons claims get denied?
Most denials fall into six groups: eligibility problems, missing prior authorization, coding and modifier errors, missing or mismatched information, duplicate claims, and late filing. Each has a predictable fix, and most fixes belong at the front desk or in coding, not in the billing office.
1. Eligibility and coverage
The patient's coverage was inactive, the plan changed, or the service isn't covered under their benefits.
Prevent it: verify eligibility before every visit, not just the first one. Re-check when a patient says nothing has changed. Plans change at the start of the year and when jobs change.
2. Missing prior authorization
Imaging, some procedures and many specialty drugs need approval from the payer before the service.
Prevent it: keep a payer-by-payer list of services that need authorization and check it when the order is placed. Record the authorization number where the biller will see it.
3. Coding and modifier errors
The procedure and diagnosis don't support each other, a modifier is missing or wrong, or the code doesn't match the documentation.
Prevent it: code from the note, not from memory. Modifier 25 and modifier 59 are frequent offenders. Use them only when the documentation shows a separately identifiable service or a distinct procedure.
4. Missing or mismatched information
A wrong date of birth, a subscriber ID typo, or a missing referring provider NPI.
Prevent it: scrub claims before submission. Most of these errors are caught by a good claim scrubber or clearinghouse edit.
5. Duplicate claims
The same service was billed twice, often when a claim was resubmitted instead of corrected.
Prevent it: check claim status before resubmitting, and send corrections as corrected claims, not new ones.
6. Timely filing
The claim reached the payer after the filing limit, which can be as short as 90 days.
Prevent it: submit within 24–48 hours of the visit and work rejections the same day. Track each payer's filing limit.
How do you know which denials to fix first?
Sort open denials by appeal deadline and dollar value. Work the high-value claims closest to their deadline first, then look for patterns. If one reason code accounts for a large share of denials, the fix is upstream, not in the appeal.
What is a good denial rate?
Industry benchmarks put a healthy initial denial rate at around 5% or lower. Above 10%, a practice is usually losing meaningful revenue to rework and write-offs.
Want to know where your practice stands? Our free billing audit reviews a sample of your recent denials and shows you the biggest fixes.