Imagine spending hours carefully entering patient data, coding diagnoses, and submitting claims—only to have them denied. The frustration, delays in payment, and endless back-and-forth with insurance companies can make even the most organized healthcare provider feel powerless. In the world of medical billing, denied claims are not just a nuisance—they directly impact cash flow, patient satisfaction, and the overall financial health of a practice.
Claim denials are one of the biggest pain points in the healthcare revenue cycle. According to industry reports, nearly one in five submitted claims contains an error that can result in a denial or delay. And here’s the kicker: the majority of these denials are preventable with the right processes, training, and attention to detail. But first, you need to know which claims are most often denied—and why.
Understanding the top reasons for medical billing claim denials can empower you to fix the root causes, reduce revenue loss, and streamline reimbursement. Whether you’re a physician, billing specialist, or practice manager, this guide will give you the insight and practical strategies you need to minimize costly denials.
Let’s dive into the most denied medical billing claims, why they happen, and how the top optometry billing services for eye clinics can help you stop them in their tracks.
Why Medical Billing Claim Denials Are So Common
Before we list the most denied claims, it’s important to understand the underlying causes. In medical billing, even a small error—like a mistyped patient ID or an outdated CPT code—can trigger a denial.
The Three Main Types of Denials:
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Soft Denials – Claims that can be corrected and resubmitted without an appeal.
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Hard Denials – Claims that cannot be corrected and result in lost revenue.
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Preventable Denials – Errors that could have been avoided with proper processes.
Common contributing factors include:
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Incorrect or missing patient information
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Inaccurate coding
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Lack of required pre-authorization
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Missed filing deadlines
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Insufficient documentation
The Most Denied Medical Billing Claims
1. Claims for Services Not Covered by the Patient’s Insurance Plan
Why It Happens:
One of the most frequent denial reasons is that the billed service isn’t covered under the patient’s insurance plan. In medical billing, this often occurs when eligibility verification isn’t properly done.
Example:
A patient comes in for a routine screening that their plan does not cover, or the service is considered “experimental” under their policy.
Prevention Tips:
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Always verify coverage before providing services.
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Use real-time eligibility verification tools.
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Educate patients on their coverage limitations.
2. Claims Missing Prior Authorization
Why It Happens:
Many procedures—especially surgeries, imaging studies, and specialty treatments—require pre-approval from the insurance company. If the authorization wasn’t obtained beforehand, the claim will be denied.
Example:
An MRI without documented prior authorization.
Prevention Tips:
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Maintain a list of services that require prior authorization for each insurer.
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Assign a dedicated team member to handle authorizations.
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Store authorization numbers in the patient’s record.
3. Duplicate Claims
Why It Happens:
Sometimes, claims are submitted twice for the same service, either due to human error or system glitches. Insurance companies flag these as duplicates and deny them.
Example:
Submitting a claim twice because the first one’s payment hasn’t posted yet.
Prevention Tips:
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Track claim submissions carefully.
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Use billing software with duplicate-check features.
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Allow adequate processing time before resubmitting.
4. Claims with Incorrect Patient Information
Why It Happens:
Simple typos—like misspelled names, wrong birthdates, or mismatched policy numbers—can cause rejections.
Example:
Patient name on the claim form doesn’t match exactly with the insurance card.
Prevention Tips:
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Double-check patient demographics during registration.
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Scan and store insurance cards for reference.
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Implement verification checkpoints in your medical billing workflow.
5. Claims with Coding Errors
Why It Happens:
Incorrect ICD-10 or CPT codes are a major source of denials in medical billing. These errors can occur due to outdated codebooks, misinterpretation of documentation, or lack of specificity.
Example:
Using a general diagnosis code when a more specific one is required.
Prevention Tips:
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Keep coding resources up to date.
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Provide regular coding training for staff.
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Use coding audit software.
6. Claims for Non-Medically Necessary Services
Why It Happens:
If the insurer determines that the service wasn’t “medically necessary” based on the diagnosis and clinical guidelines, they will deny it.
Example:
Ordering advanced imaging for a mild condition without documented justification.
Prevention Tips:
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Document the medical necessity clearly in the patient’s record.
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Use appropriate modifiers when applicable.
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Familiarize yourself with each payer’s medical necessity policies.
7. Claims Submitted After Filing Deadlines
Why It Happens:
Insurance companies have strict timelines for claim submission, ranging from 90 days to a year. Missed deadlines lead to automatic denials.
Example:
A claim for a service in January being submitted in October, beyond the insurer’s filing limit.
Prevention Tips:
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Monitor claim timelines in your billing system.
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Set reminders for approaching deadlines.
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Submit claims promptly after service.
8. Claims with Coordination of Benefits (COB) Issues
Why It Happens:
When a patient has more than one insurance plan, the payer order must be determined correctly. If primary vs. secondary coverage is mixed up, denials occur.
Example:
Billing the secondary insurance first by mistake.
Prevention Tips:
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Verify primary and secondary coverage during each visit.
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Update COB information regularly.
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Train staff on COB rules.
9. Claims with Missing or Incomplete Documentation
Why It Happens:
Some services require additional documentation to support payment, such as operative reports, progress notes, or test results.
Example:
Billing for a complex procedure without attaching required operative notes.
Prevention Tips:
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Maintain thorough and timely documentation.
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Know which services require supporting records.
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Use checklists to ensure all attachments are included.
10. Claims for Bundled Services
Why It Happens:
Some services are considered part of a larger procedure and are not separately billable. Billing separately for bundled services leads to denials.
Example:
Billing for anesthesia monitoring separately when it’s included in the surgical package.
Prevention Tips:
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Understand payer bundling rules.
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Use modifiers correctly when unbundling is justified.
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Review National Correct Coding Initiative (NCCI) edits.
11. Claims with Modifier Issues
Why It Happens:
Modifiers are used to provide additional information about a service, but incorrect or missing modifiers can lead to denials.
Example:
Failing to use modifier 25 for a significant, separately identifiable E/M service performed on the same day as a procedure.
Prevention Tips:
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Keep an updated list of modifier rules for each payer.
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Train staff on correct modifier usage.
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Audit claims regularly for modifier accuracy.
12. Claims Impacted by Patient Eligibility Changes
Why It Happens:
If a patient changes jobs, loses coverage, or switches plans, their eligibility can change between the time of scheduling and the date of service.
Example:
A service rendered after the patient’s coverage terminated.
Prevention Tips:
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Verify eligibility on the date of service, not just at scheduling.
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Re-check coverage for long-lead-time procedures.
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Confirm policy start and end dates.
Best Practices to Reduce Claim Denials
Implement Robust Eligibility Verification
Real-time verification tools are a game-changer in medical billing. They allow you to catch coverage gaps before services are rendered.
Standardize Documentation Procedures
Consistent, complete documentation supports medical necessity and coding accuracy.
Invest in Staff Training
Ongoing education for billers, coders, and front-desk staff keeps your team sharp and informed.
Use Denial Management Software
Track denials by reason, payer, and service type to identify trends and problem areas.
Conduct Regular Internal Audits
Prevent small mistakes from snowballing into systemic issues.
The Financial Impact of Denied Claims
Denied claims can be costly. Industry data shows:
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The average cost to rework a denied claim is $25–$118.
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Up to 65% of denied claims are never resubmitted.
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Revenue loss from denials can account for 1–5% of total collections.
By reducing denial rates, practices can significantly improve cash flow, reduce administrative burden, and enhance patient satisfaction.
Conclusion
Denied claims are an unfortunate but common reality in medical billing. From missing prior authorizations to incorrect patient data, the causes are varied but often preventable. By understanding the most denied claim types and implementing strong front-end processes, healthcare providers can reduce denials, speed up reimbursements, and protect their revenue.
In short: Prevention is the best cure for claim denials. It requires diligence, training, and the right technology, but the payoff—in terms of time saved and revenue recovered—is well worth the effort.