Common Denials in Medical Billing: Causes, Appeal & Examples

Medical billing is an important part of healthcare, but sometimes claims get denied. A denial means the insurance company has refused to pay for a service. This can slow down payments and create extra work for healthcare providers. In this blog, we will explain the common reasons for denials in medical billing, how to appeal them, and share some examples. Understanding these can help you reduce mistakes, save time, and improve your billing process.

What Are Denials in Medical Billing?

In medical billing, a denial occurs when an insurance company refuses to pay for a medical service or procedure that was billed. This decision is based on specific reasons like missing information, policy exclusions, or coding errors.
A denied claim means no payment will be made unless corrected and resubmitted through the proper appeal process.

Why Do Claims Get Denied?
Medical claim denials can occur for several reasons. Some are preventable, others require clarification or additional documentation.

Reason	Explanation
Incorrect patient details	Typos in name, DOB, or insurance ID
Authorization missing	No prior approval from insurer
Coding errors	Wrong CPT, ICD-10, or modifiers
Non-covered services	Service not covered under patient’s plan
Late submission	Claim filed after the deadline
Duplicate claim	Same service billed more than once

Real Examples of Medical Billing Denials

Here are real-world denial situations:

Example 1: Authorization Not Obtained
A patient undergoes an MRI scan. The provider forgets to obtain pre-authorization. Claim denied with code CO-197 (authorization required).

Example 2: Incorrect Diagnosis Code
Claim submitted for asthma treatment with a vague or incorrect ICD-10 code. Denied under code CO-11 (diagnosis inconsistent with procedure).

Example 3: Non-Covered Service
Provider bills for cosmetic surgery. Patient’s insurance policy excludes it. Claim denied under code CO-96 (non-covered charges).

Most Common Denial Codes

Tip: Always review the Explanation of Benefits (EOB) to decode denial reasons.

How Denials Affect Your Revenue Cycle

Claim denials can hurt your healthcare practice in multiple ways:

• Delayed payments
• Increased administrative costs
• Staff burnout
• Lost revenue due to uncorrected claims
• Reduced patient satisfaction

It’s estimated that up to 10% of revenue is lost to preventable denials. That’s why denial management must be a top priority for any billing team.

Steps to Prevent Denials in Medical Billing

Here’s how to avoid denials before they happen:
1. Verify patient details upfront
Double-check insurance, policy number, and eligibility before the visit.

2. Use correct and specific codes
Stay updated on ICD-10 and CPT coding guidelines.

3. Obtain prior authorization
For surgeries, diagnostics, and specialty care.

4. Submit claims on time
Follow timely filing limits (often 30–90 days from date of service).

5. Conduct internal audits
Spot errors before claims go out.

6. Train billing staff regularly
Keep your team updated on payer-specific requirements.

Denial Management Best Practices for 2025

To stay ahead, adopt the following strategies:

• Automate eligibility checks using practice management software
• Track denial trends and create a monthly report
• Assign denial types to dedicated team members
• Use denial dashboards to visualize where things go wrong
• Follow up within 7 days of a denial to appeal or correct
• Educate physicians and coders on documentation best practices

How to Appeal a Denied Claim Successfully

Denied doesn’t mean dead. Here’s how to fix it:

1. Review denial reason in the EOB
2. Gather supporting documents – chart notes, authorization, corrected codes
3. Submit a clean corrected claim or formal appeal
4. Include a clear appeal letter stating why the service was necessary
5. Follow up with the payer every 10–14 days until resolved

Pro Tip: Use payer-specific appeal forms and maintain copies of everything submitted.

Conclusion

Denials in medical billing are common, but they can be reduced a lot with the right process, staff training, and use of technology. When providers learn how to prevent denials and handle appeals, they save time, improve cash flow, keep patients happy, and stay within the rules.

A strong medical billing workflow helps you avoid claim issues and get paid faster. If you want to learn how to manage this better, a medical coding course can help you build the right skills.