Missing Piece Blog

The Difference Between Rejected & Denied Claims

Submitting healthcare claims is a complex and ever-changing process as new technology and regulations bring changes that make understanding claims processing sometimes feel like a moving target. Understanding claims processing is an evolving skill, but learning the basic language is the first step to successfully navigating this landscape. One of the keys is knowing the difference between rejected and denied claims.

We look at the definition of rejected and denied claims and share how Missing Piece, one of the leading ABA therapy billing services, can assist.

Claims rejections

Claims rejections occur when the clearinghouse or the payer stop a claim from entering their processing system. This is typically due to missing, incomplete, outdated, or incorrect information included in the claim. When claims fail to enter the payer’s processing system, ABA consultation and service providers do not receive an explanation of benefits or remittance advice for the claim rejection. Depending on the processor, providers may or may not receive a rejection notice from the clearinghouse or other electronic system.   

When the statuses of claims go unmonitored, rejections can be especially problematic for providers, their patients, and patients’ families. It is not uncommon for providers to wait for a notification to trigger action on unpaid claims. In the instance of a rejection that does not include a follow up notice, a significant amount of time may go by before realizing a claim went unreceived. At this point, deadlines for timely filing requirements may have passed for the payer. Unfortunately, timely filing denials are rarely overturned when appealed; therefore, it is important that as part of a claims review process, providers have a method for monitoring rejections.   

Claims denials

Claims denials are claims that are received by the payer, processed, and then denied. Why are claims denied? Some of the more common claim denial reasons include: 

  • Eligibility, coverage, or coordination of benefits issues  
  • Authorization problems  
  • Misinformation on the claim form 
  • Incomplete information on the claim form 
  • Incorrect or incomplete processing by the payer   

It is important to note that a claim that is processed by the payer and posted to a deductible or coinsurance is not considered a denied claim.   

When a claim is denied providers may be notified of this in a few different ways including on explanation of benefits (EOB) documentation, explanation of payment (EOP) documentation, electronic remittance advice (ERA) and/or other methods by which providers are notified of claims payments and statuses. A denial response will typically include the reason for the denial. As a provider, you have a limited window of time — one that can vary significantly by payer — to respond to the denial and submit either a corrected claim or a new claim altogether. 

Following up on denied claims is an integral part of revenue cycle management. Many providers assume that once they submit a claim, their job is completed with a timely payment on the way (if only in a perfect world). An experienced Accounts Receivable representative is aware that follow-up on claims submission is necessary to ensure payment is received.   

How do I simplify navigating rejected and denied claims?

Does the pressure of claim follow-up and accounts receivable management create stress for you? When you understand the difference between rejection and denial in medical billing, it makes navigating the process that much easier. Let the experts at Missing Piece Billing and Consulting help you with your behavioral health and ABA billing needs. Our experienced staff knows and incorporates best practice payer specific policies and protocols on a daily basis. We ensure that your behavioral health and ABA claims are not rejected or denied, especially due to avoidable issues like incorrect ABA billing codes and out-of-date payer profiles, and that they are paid correctly and on time. 

To learn more about how our comprehensive revenue cycle management process helps ABA services, contact us online or by phone at 765-628-7400.