6 Common Reasons For Claims Denials & What To Do

The Denial Dilemma

Claim denials are a persistent challenge for healthcare providers, with the average denial rate ranging from 5% to 10% across the industry. The American Medical Association estimates that claim denials cost the healthcare system over $260 billion annually. Understanding the most common reasons for denials is the first step toward preventing them and recovering lost revenue.

1. Patient Eligibility and Coverage Issues

The single most common reason for claim denials is eligibility-related issues—patients whose insurance has expired, changed, or doesn’t cover the rendered services. These denials account for approximately 27% of all claim rejections.

What to do: Implement real-time eligibility verification before every patient encounter. Verify coverage details, including plan type, deductible status, copay amounts, and authorization requirements. For scheduled appointments, verify eligibility 48 hours in advance to allow time to resolve any issues.

2. Missing or Incorrect Information

Incomplete or inaccurate patient demographics, provider information, or claim details account for a significant portion of denials. Simple data entry errors—transposed numbers, misspelled names, wrong dates—can result in automatic claim rejection.

What to do: Implement double-entry verification for critical fields, use electronic submission to reduce manual data entry errors, and run claims through automated scrubbing software before submission to catch common errors.

3. Prior Authorization Not Obtained

Many payers require prior authorization for specific procedures, services, and medications. Failing to obtain required authorization before rendering services results in automatic denials that are often difficult to overturn on appeal.

What to do: Maintain a current list of payer authorization requirements, implement a systematic pre-authorization workflow, and use electronic prior authorization (ePA) tools to streamline the process and reduce turnaround times.

4. Coding Errors

Incorrect diagnosis codes, mismatched procedure codes, unbundling errors, and missing modifiers are frequent causes of claim denials. Coding errors are particularly problematic because they can also raise compliance concerns and trigger audits.

What to do: Ensure all coders are certified (AAPC or AHIMA) and receive ongoing education about annual code updates. Implement regular coding audits to identify error patterns and provide targeted training. Consider using computer-assisted coding tools to improve accuracy.

5. Duplicate Claims

Submitting the same claim more than once—whether accidentally or due to system issues—results in automatic denial. Duplicate claims waste payer and provider resources and can flag your practice for increased scrutiny.

What to do: Implement a claim tracking system that identifies potential duplicates before submission. Ensure payment posting is timely and accurate so that claims already paid are not resubmitted. Review and reconcile claims regularly to prevent duplicate submissions.

6. Timely Filing Violations

Each payer has a specific window—typically 90 to 180 days—during which claims must be submitted. Late claims are denied outright, and most timely filing denials cannot be appealed.

What to do: Implement a claim submission deadline tracking system with automated alerts. Submit claims within 24-48 hours of the date of service whenever possible. At GoBill, we ensure same-day claim submission for maximum compliance and minimum denial risk.

Taking Action

Don’t let claim denials drain your practice’s revenue. GoBill’s denial management services combine AI-powered analytics with expert human review to identify denial patterns, implement targeted solutions, and recover revenue from previously denied claims. Our clients see denial rates drop below 5% within the first quarter of partnership.