Top 10 Denial Codes in Medical Billing: Meanings, Causes, and How to Fix Them

Claim denials are one of the most common challenges in US medical billing. Even experienced billing teams face denials due to payer rules, documentation gaps, or small data errors. Understanding the top 10 denial codes in medical billing helps billing professionals identify issues quickly and take corrective action.

For students and professionals trained in US healthcare billing, denial code knowledge is not optional. It directly impacts reimbursement, accounts receivable, and overall revenue cycle performance.

This guide explains the most frequently seen denial codes, their meanings, common causes, and how to fix or prevent them.

What Are Denial Codes in Medical Billing?

Denial codes are standardized codes used by insurance payers to explain why a claim or service was not paid. These codes appear on the Explanation of Benefits (EOB) or Electronic Remittance Advice (ERA).

Most denial codes fall under:

• CO (Contractual Obligation)
• PR (Patient Responsibility)
• OA (Other Adjustment)

Top 10 Denial Codes in Medical Billing

1. CO 16 Denial Code

Meaning: Claim lacks required information or contains billing errors.

Common Causes:

• Missing modifiers
• Incomplete diagnosis codes
• Missing authorization details

How to Fix:

• Correct missing data and resubmit the claim.

2. CO 50 Denial Code

Meaning: Medical necessity not supported.

Common Causes:

• Diagnosis does not justify the procedure
• Insufficient clinical documentation

How to Fix:

• Submit medical records and appeal if appropriate.

3. CO 45 Denial Code

Meaning: Charges exceed the payer’s allowed amount.

Common Causes:

• Billing above contracted rates
• Incorrect fee schedules

How to Fix:

• Write off contractual adjustments or appeal if contract terms are violated.

4. CO 97 Denial Code

Meaning: Service is bundled and included in another procedure.

Common Causes:

• Unbundled CPT codes
• Missing modifiers like 59

How to Fix:

• Review bundling rules and apply correct modifiers.

5. CO 18 Denial Code

Meaning: Duplicate claim or service.

Common Causes:

• Same claim submitted more than once
• Duplicate service dates

How to Fix:

• Verify claim history and avoid resubmitting unnecessarily.

6. CO 29 Denial Code

Meaning: Timely filing limit exceeded.

Common Causes:

• Late claim submission
• Delays in corrections or appeals

How to Fix:

• Track payer filing deadlines and submit on time.

7. CO 96 Denial Code

Meaning: Non-covered service.

Common Causes:

• Service not included in patient’s plan
• Missing coverage verification

How to Fix:

• Verify coverage before service or bill patient if applicable.

8. CO 167 Denial Code

Meaning: Diagnosis not covered or invalid for the service.

Common Causes:

• Diagnosis-procedure mismatch
• Incorrect ICD-10 coding

How to Fix:

• Correct diagnosis coding and resubmit.

9. CO 234 Denial Code

Meaning: Procedure requires prior authorization.

Common Causes:

• Authorization not obtained or missing on claim

How to Fix:

• Obtain authorization and resubmit with details.

10. CO 197 Denial Code

Meaning: Precertification or referral required.

Common Causes:

• Missing referral number
• Plan-specific referral rules

How to Fix:

• Verify referral requirements before billing.

Why These Denial Codes Matter

These top denial codes account for a large percentage of unpaid claims. If not managed properly, they lead to:

• Increased AR days
• Delayed cash flow
• Higher administrative workload
• Lost revenue due to missed deadlines

How to Reduce Denials in Medical Billing

Best practices include:

• Accurate eligibility and benefits verification
• Correct CPT, ICD-10, and modifier usage
• Pre-authorization checks
• Regular claim audits
• Denial trend analysis
• Staff training on payer rules

A proactive denial management process improves clean claim rates.

Importance of Denial Code Knowledge for Medical Billing Careers

Understanding denial codes is critical for:

• Medical billing executives
• AR analysts
• Denial management specialists
• Revenue cycle professionals

Denial management skills are highly valued in US healthcare billing roles.

Conclusion

Knowing the top 10 denial codes in medical billing helps billing professionals respond faster, prevent repeat errors, and improve reimbursements. While denials are common, most can be avoided or corrected with strong billing practices and payer awareness.

For anyone pursuing a career in medical billing or revenue cycle management, mastering denial codes is a core competency.