What Are the Most Common Reasons Medical Claims Get Denied?
Monday morning, your biller prints the denial report. Twenty-two claims. She reads down the reason codes: CO-197, CO-16, PR-204, CO-27, CO-29. Five different problems, five different fixes, and most of them started before the claims ever left the building.
Two came from a plan that ended in July. One came from an authorization number that covered the wrong date of service. One came from a member ID typed a digit off at check-in.
Sort a month of denials by reason code and a small handful of causes accounts for most of the pile. Once you know which ones land on your remits, you can fix the process making them.
What are the most common reasons medical claims get denied?
The most common claim denial reasons are patient eligibility and registration errors, missing or inaccurate claim data, and absent prior authorizations. Registration and eligibility alone cause 27% of denials, missing authorization causes 11.6%, and services the plan does not cover account for 10.6%. About half of all denials start at the front end of the visit. Those figures come from Change Healthcare's Revenue Cycle Denials Index, cited by MGMA.
Is a rejected claim the same as a denied claim?
No, and the difference decides how much time you have. A rejection bounces back from your clearinghouse or the payer's front-end edits before the claim reaches adjudication. Your biller corrects the error and sends it again as a new claim. A denial means the payer took the claim in, adjudicated it, and refused to pay. That one needs a corrected claim or an appeal, and the window opens the day the remittance posts.
Count the two apart. A month that looks like a 12% denial rate often splits into 7% rejections your biller cleared in a day and 5% true denials that took an appeal. Our guide to claims denial management walks through the appeal side step by step.
Which denial reason codes show up most on your remits?
Payers report the reason on the remittance advice with a Claim Adjustment Reason Code, or CARC, drawn from the standard X12 list. The group code in front of it tells you where the balance sits: CO puts it on your contract, PR puts it on the patient. These nine land on practice remits week after week.
Code | What X12 says it means | Where to start looking |
|---|---|---|
CO-16 | Claim/service lacks information or has submission/billing error(s) | The remark code printed beside it, which names the missing field. |
CO-27 | Expenses incurred after coverage terminated | Eligibility on the date of service, not the date of scheduling. |
CO-197 | Precertification/authorization/notification/pre-treatment absent | Your authorization log: the number, the CPT code, the date span. |
PR-204 | This service/equipment/drug is not covered under the patient's current benefit plan | The plan's benefit limits, and any waiver the patient signed. |
CO-50 | These are non-covered services because this is not deemed a "medical necessity" by the payer | The diagnosis code and the chart note behind it. |
CO-11 | The diagnosis is inconsistent with the procedure | The diagnosis-to-procedure match on the encounter form. |
CO-97 | The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated | Bundling edits, and whether a modifier belongs on the line. |
CO-109 | Claim/service not covered by this payer/contractor. You must send the claim/service to the correct payer/contractor | Primary versus secondary order, and Medicare Advantage plans billed to Medicare. |
CO-29 | The time limit for filing has expired | Your submission date against the payer's window. Medicare allows 12 months. |
Why do so many denials start at the front desk?
Your front desk holds the two facts every claim depends on: which payer to bill, and whether the patient carried that coverage on the day of service. Coverage changes on January 1, when a patient changes jobs, and when a spouse's plan renews. None of those announce themselves at the window.
Run eligibility 24 to 48 hours ahead of the visit, then check the card again at check-in. Read the whole response: effective dates, copay, deductible balance. Treat the yes-or-no line as the beginning of the answer. Watch for Medicare Advantage, because the card looks like a commercial card and the claim belongs to the plan rather than to Medicare. Type the member ID off the card in the patient's hand instead of the one saved in last year's chart.
Each of those takes a minute at the desk. Chasing the same error after a denial takes your biller three weeks and a phone call.
How often do payers deny claims?
More often than most practices expect. KFF reviewed the transparency data HealthCare.gov insurers file and found they denied about 19% of in-network claims in 2024, out of 451 million in-network claims.
The reasons those insurers reported say as much about the data as about the denials. They filed 36% of 2024 in-network denials under "other," 25% under administrative reasons, 13% as an excluded service, 9% for prior authorization or referral, and 5% for medical necessity.
Practices feel it from the other side of the claim. In Experian Health's 2025 State of Claims survey of 250 revenue cycle leaders, 41% said at least one in ten of their claims comes back denied, and 54% said denials keep rising.
Patients seldom push back. KFF found consumers appealed less than 1% of denied in-network claims, and insurers upheld 66% of the appeals they received. The work of getting paid stays in your office.
How do you bring your denial rate down?
You can move this number without buying anything. Five habits do most of the work:
Sort denials by reason code every week. Group the report by CARC, count the dollars in each group, and fix the biggest group first. If CO-27 and PR-204 top the list, the answer sits at the front desk.
Verify eligibility twice. Once a day or two before the visit, once at check-in. Catch the plan that ended and the ID that changed before anyone codes the chart.
Keep a procedure-by-payer authorization list. Write down which CPT codes need an authorization from which plans, then match the number, the code, and the date span before the patient walks in.
Turn on your scrubber edits and work what they flag. A claim your clearinghouse kicks back costs a few minutes. The same claim denied by the payer costs weeks of aging and about $25 in staff time to rework.
Code with certified coders. CO-11, CO-50, and CO-97 come from the code set and the documentation behind it. See what certified medical coding specialists do with those denials.
Then watch your first-pass claim rate for the result. When the eligibility line on your denial report shrinks two months running, the change you made at the front desk is working.
Who works your denials when the week runs out?
TRACT Medical started as a private billing group. Physician groups in Tulsa built it to run their own billing, and for more than 30 years they paid for denied claims out of their own revenue. That history shows up in how our team reads a denial report: by hand, claim by claim, each reason code traced back to whatever created it.
Our coders hold AAPC, CIRCC, and RCC certifications, so a coding denial gets answered by someone who reads the chart note and knows the edit behind it. We handle medical billing, medical coding, credentialing, claims follow-up, denial management, and practice management. When a denial needs a decision, you call our office on East 41st Street and reach a manager. Practices weighing that against another hire can read how to outsource revenue cycle management without losing control.
If your denial report keeps growing and nobody has the hours to work it, we'll go through a month of your denials with you and show you where they come from. Call (918) 747-4975 or request a consultation. We're here Monday through Friday, 7:30 to 4:00. If you're in Tulsa, come see us. We give tours.
Frequently asked questions
What is the number one reason medical claims get denied?
Registration and eligibility errors. Change Healthcare's Revenue Cycle Denials Index put them at 27% of all denials, ahead of missing authorization at 11.6% and non-covered services at 10.6%. Most trace to a plan that ended, a member ID entered wrong, or a secondary payer nobody recorded at check-in.
What is the difference between a claim rejection and a claim denial?
A rejection comes back before adjudication, from your clearinghouse or the payer's front-end edits, so you correct it and resubmit as a new claim. A denial means the payer processed the claim and refused payment, which calls for a corrected claim or a formal appeal within the payer's filing window.
What is a CARC code?
A Claim Adjustment Reason Code, from the standard list X12 maintains, explains on the remittance advice why a payer adjusted or refused payment. The group code in front of it shows who carries the balance: CO for a contractual obligation you write off, PR for an amount the patient owes.
Can you resubmit a denied claim?
Yes, if you correct whatever caused the denial and stay inside the payer's timely filing window. Send a corrected claim for data and coding errors. Denials over medical necessity or an absent authorization often need a formal appeal, with the chart note and any authorization records attached.
How long do you have to file a Medicare claim?
Twelve months from the date of service. Section 6404 of the Affordable Care Act set that limit for Medicare fee-for-service claims furnished on or after January 1, 2010. Miss it and you get CARC 29, the time limit for filing has expired. Narrow exceptions cover administrative error and retroactive entitlement.
Sources: Change Healthcare 2020 Revenue Cycle Denials Index, as cited by MGMA (denial causes by percentage, front-end share, $25.20 rework cost); KFF, Claims Denials and Appeals in ACA Marketplace Plans in 2024 (19% in-network denial rate, reported denial reasons, appeal rates); Experian Health 2025 State of Claims report (survey of 250 revenue cycle leaders); X12 Claim Adjustment Reason Codes (code descriptions); CMS, New Maximum Period for the Submission of Medicare Claims (12-month Medicare filing limit).
