Getting healthcare claims submitted is going to take a lot of work. It’s a highly complex and technical process, but if you know the fundamentals of claim submitting, you’ll have an easier time working through it. One critical detail to understand is the difference between denied and rejected claims. Today, we’ll review the differences between denied and rejected claims and how each should be handled.
Rejected Claims
If a claim rejection happens, the payer or clearinghouse prevents a claim from ever getting into the processing system. The reason for a claim rejection will usually be that information is missing or that the information isn’t correct.
If a medical claim cannot get into the processing system, service providers don’t get any explanation of benefits or remittance advice regarding the rejected claim. Whether or not a rejection notice is delivered depends entirely on the processor.
When claim statuses aren’t adequately monitored, rejections can become a huge problem for patients and providers. Many providers will not act on unpaid claims until a notification to do so is delivered. This is a big problem because a lot of time may pass before providers even realize a medical claim wasn’t received. When enough time passes, deadlines to complete filing requirements on time may already be finished.
Sadly, you’ll rarely ever find filing denials get overturned when they’re appealed, even when they’re on time. This is why providers need to have a method in place to keep track of claim rejections.
Denied Claims
Denied claims are different from rejected ones. These reach the payer and get processed before getting denied. There are a few reasons why a claim denial could happen, including false information on a claim form, incomplete information on a claim form, or authorization issues.
When claims get denied, providers will get informed in one of many ways, which include electronic remittance advice (ERA), explanation of payment (EOP), and explanation of benefits (EOB), and the provider will often give a reason why the denial occurred. You only have a certain amount of time to respond to denied claims, and when you respond, it needs to be by either correcting the current claim or submitting an entirely new one.
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