What is a Clinical Denial?
A clinical denial is when an insurance payer rejects a healthcare claim due to discrepancies or issues between the clinical documentation provided and the services billed. The payer believes that the documentation does not support the medical necessity or appropriateness of the billed services, leading to a denial of payment.
What are common reasons for a clinical denial?
- The documentation does not sufficiently demonstrate that the services provided were medically necessary for the patient's condition.
- The clinical notes or records do not support the billed services or do not provide enough detail to justify the procedure or treatment.
- Coding errors, such as using incorrect or incomplete procedure or diagnosis codes, can lead to denials.
- The services provided may require prior authorization or approval; if this is not obtained, the claim can be denied.
- Submitting a claim for services that have already been billed and paid for can result in denying duplicate charges.
- The claim may be denied if there are issues with the patient's insurance coverage or eligibility at the time of service.
- The services billed may not be covered under the patient's insurance plan, leading to a denial.
- Mistakes such as incorrect dates, provider information, or other billing errors can cause claims to be denied.
- Failure to meet specific documentation requirements outlined by the payer can result in a denial.
What are the differences between clinical denials and administrative denials?
Clinical denials and administrative denials differ in their underlying causes and focus.
Clinical denials occur when an insurance payer rejects a claim due to discrepancies between the clinical documentation and the services billed, often because the documentation does not support the medical necessity of the services.
Administrative denials occur due to issues with the claim's administrative aspects, such as missing information, incorrect billing codes, or procedural errors.
While clinical denials relate to the appropriateness of the care provided, administrative denials stem from errors or omissions in the claim submission process.
Examples of clinical denial
Example 1:
A patient undergoes an elective cosmetic procedure that is billed to insurance. The insurance company reviews the claim and finds that the documentation does not indicate any medical necessity for the procedure.
The claim is denied because the documentation does not show that the procedure was essential for the patient's health, leading to a clinical denial.
Example 2:
A patient receives a specific treatment that requires prior authorization. The healthcare provider fails to obtain the necessary approval before performing the treatment.
The claim is denied because the treatment was provided without prior authorization, resulting in a clinical denial due to the lack of approved services.