Denied claims in healthcare, especially in the durable medical equipment (DME) space, create significant challenges for suppliers. Denials in medical billing not only disrupt cash flow but also delay patient care and increase administrative workload. Understanding common reasons why insurance claims are denied can help reduce errors, improve revenue cycle management, and maintain compliance.
Below are the top five causes of claim denials in DME billing, followed by a list of commonly encountered denial codes. Understanding these issues provides valuable insight into the complexities of the insurance process and the challenges that can lead to delays in claims processing.
1. Missing or Insufficient Documentation
One of the most frequent reasons for claim denial is missing or insufficient documentation. Common denials in medical billing often stem from incomplete physician orders, missing proof of delivery, incomplete certificates of medical necessity (CMNs), or even missing surgical documentation. Without the proper paperwork, insurance payers will reject claims, leading to delays in reimbursement.
2. No Documentation Submitted at All
Surprisingly, some claims are denied simply because no supporting documentation is submitted at all. This error is among the top 10 denials in medical billing and is easily preventable.
3. Lack of Proof of Medical Necessity
Claims lacking proper justification for the prescribed equipment frequently face denials. Without clear evidence of medical necessity, claims are often rejected by insurers. This lack of documentation makes it difficult for payers to verify that the prescribed equipment is appropriate for the patient’s condition, leading to delays or denials in reimbursement.
4. Incorrect Coding
Incorrect coding is another major source of claim denial. This includes errors with HCPCS codes, modifiers, or diagnosis codes. Examples include the CO-22 denial code, which refers to coverage termination, and the CO4 denial code, indicating that the procedure code is inconsistent with the modifier or diagnosis.
5. Failure to Respond to CERT Audit Requests
CERT (Comprehensive Error Rate Testing) audits are used to identify improper Medicare payments. Failing to respond to these audit requests in a timely and complete manner often results in claim denials.
Common DME Denial Codes
Understanding denial codes is essential for billing teams to quickly identify and address issues. Below is a list of denial codes in medical billing that frequently impact DME claims:
|
Denial Code |
Reason |
|
CO-16 |
Missing or incomplete information |
|
CO-50 |
Services not medically necessary |
|
CO-109 |
Claim not covered by this payer |
|
CO-27 |
Expenses incurred after coverage ended |
|
CO-97 |
Procedure/service not paid separately |
These codes often appear on payer denial reports. A denied code list is commonly used to track and understand denial reasons across different payers. Additional references include the CO-29 denial code (time limit for filing expired) and the pr 1 denial code description (deductible amount), which are frequently encountered in DME billing.
How to Prevent Denials in DME Billing
At Notable Systems, we understand how complex DME billing can be and how denied claims affect both operations and revenue. Our Payor Greenlight System (PGS) focuses on automated documentation checks and payer requirement verification, helping suppliers address common denial risks earlier in the billing process.
To learn more, explore our PGS product page and see how Notable Systems can support cleaner, faster billing.
