How Do You Reduce Denials in Medical Billing and Clear A/R Over 90 Days?

Which denials start at the front desk, and which in coding

Sorting by step needs a map from code to step. The codes below are quoted or closely paraphrased from the X12 list, and each is placed at the step where that kind of denial can begin. A code can have more than one cause, so the remark code and the claim have the last word.

• Eligibility, at scheduling and check-in: CARC 27, “Expenses incurred after coverage terminated”; CARC 26, “Expenses incurred prior to coverage”; CARC 109, a claim “not covered by this payer/contractor” that must go to the correct one; and CARC 22, “This care may be covered by another payer per coordination of benefits.” Each is answerable before the visit with an eligibility check, for which HIPAA’s standard is the X12 270/271 inquiry and response (45 CFR 162.1202).
• Registration and demographics: CARC 31, “Patient cannot be identified as our insured,” and CARC 140, “Patient/Insured health identification number and name do not match.” Fixed in the patient’s insurance record, not only on the claim, or the next visit is denied the same way.
• Authorization: CARC 197, “Precertification/authorization/notification/pre-treatment absent.” The fix is the prior authorization tracker, read at scheduling and again at charge entry.
• Provider setup: CARC 208, “National Provider Identifier - Not matched”; CARC 185, “The rendering provider is not eligible to perform the service billed”; and CARC B7, a provider “not certified/eligible to be paid for this procedure/service on this date of service.” Owned by whoever maintains enrollment and the provider records in the practice management (PM) system.
• Coding and documentation: CARC 4, “The procedure code is inconsistent with the modifier used”; CARC 11, “The diagnosis is inconsistent with the procedure”; CARC 97, a service included in the allowance for another one; CARC 236, a procedure or procedure-modifier combination not compatible with another billed the same day under the National Correct Coding Initiative; and CARC 50, a service not deemed a “medical necessity” by the payer, sometimes with remark N115 or N386 naming a local or national coverage determination. These belong to providers and certified coders; an operations review counts and routes them and makes no coding judgment.
• The billing office: CARC 18, “Exact duplicate claim/service,” and CARC 29, “The time limit for filing has expired.” Both are about sending, not care: a claim re-sent without a status check, or one that waited too long.

Illustrative example: a hypothetical practice’s quarter shows 210 denied lines. By step, 74 trace to eligibility and registration, 31 to authorization, 22 to provider setup after a new physician joined, 58 to coding and 25 to the billing office. The first three groups, 127 lines, are fixed by people who never read a remittance.

The appeal clock: Medicare, Medicare Advantage, employer plans

Each route on the log has a deadline, and the deadline goes on the row the day the denial is posted. For traditional Medicare, 42 CFR 405.942 says a request for redetermination, the first level of appeal, “must be filed within 120 calendar days from the date a party receives the notice of the initial determination,” and receipt is presumed to be 5 calendar days after the date of the notice. CMS’s appeals booklet says the Medicare Administrative Contractor (MAC) generally decides within 60 days. The second level, reconsideration by a Qualified Independent Contractor, is due within 180 calendar days of receiving the redetermination under 42 CFR 405.962.

Not every Medicare denial is an appeal. Under 42 CFR 405.980(a)(3), a contractor “must process clerical errors (which includes minor errors and omissions) as reopenings, instead of as redeterminations,” and the rule lists mathematical mistakes, inaccurate data entry and denials of claims as duplicates. CMS’s first-level appeal page says MACs “do not process claim corrections involving minor errors and omissions through the appeals process.” A party may ask the contractor to reopen an initial determination within 1 year for any reason, and within 4 years for good cause. A data-entry fix filed as an appeal is in the wrong queue, so the route column needs both options.

Medicare Advantage runs on its own rules. A request to reconsider a plan’s organization determination must be filed “within 60 calendar days after receipt of the written organization determination notice” under 42 CFR 422.582(b), with receipt again presumed 5 calendar days after the notice date. The parties under 42 CFR 422.574 include the enrollee and, as the enrollee’s assignee, a physician or other provider who furnished the service and “formally agrees to waive any right to payment from the enrollee for that service.” For a practice under contract with the plan, 42 CFR 422.520(b) says the plan “is obligated to pay contracted providers under the terms of the contract,” so the provider agreement, and the provider manual it points to, is where to look for the payment-dispute steps and deadlines.

Private-sector employer group health plans follow the Labor Department’s claims rule, 29 CFR 2560.503-1. It gives claimants “at least 180 days following receipt of a notification of an adverse benefit determination within which to appeal,” and it lets an authorized representative act for the claimant, subject to the plan’s reasonable procedures for confirming the authorization. A practice appealing on the patient’s behalf does so as that representative, and a network agreement can set a separate deadline for the practice’s own payment disputes. Medicaid programs, individual-market plans and government employers’ plans fall under other rules, so each payer’s deadline is looked up and written on the row. X12 keeps CARC 286, “Appeal time limits not met,” for the appeal that arrives late. This is a plain reading of the rule texts, not legal advice.

How to work A/R over 90 days: four buckets

A single 90-plus total cannot be worked, because it holds four kinds of money stuck for different reasons. Age it from the date of service, not from the last time a claim was sent, and split it:

• No response: no remittance at all. Check status before calling, with HIPAA’s standard claim status inquiry, the X12 276/277 (45 CFR 162.1402). CMS’s claims manual says Medicare clean claims “must be paid or denied” within 30 days of receipt, and other-than-clean claims are processed within 45 days, a count that pauses while the contractor waits for information it asked for. So a Medicare claim with nothing back more than 45 days after it was sent is first a question of whether it was ever accepted, which is the rejection queue’s job, and then of whether a records request is waiting on the practice. For a contracted Medicare Advantage plan, 42 CFR 422.520(b) requires a prompt-payment provision in the contract, and that provision sets the clock.
• Denied: every line is on the denial log with a route and a deadline. Work it in deadline order, not dollar order. A large denial with 100 days left can wait a week; a small one with 10 days left cannot.
• Underpaid: the payer paid, but less than the contract says. CARC 45, “Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement,” is the expected contractual write-down. The question is whether the allowed amount matches the contracted rate, which takes the contract rates loaded in the PM or a monthly check of the top codes by payer.
• Patient responsibility: group code PR, with CARC 1 for the deductible, 2 for coinsurance and 3 for the co-payment. This is not insurance A/R. It belongs on the patient statement cycle under the practice’s financial policy, and an aging that mixes it with insurance claims hides which of the two is growing.

Work them in this order: any claim with a filing or appeal deadline inside the next 30 days, whatever its size; the no-response claims, because a status check is quick and finds the ones never accepted; the denials, by route; and the underpayments, by payer, in batches.

Who owns each queue

Every queue has one named owner: the person who can fix the cause, not only the claim. A version for a practice that bills in-house:

• Front desk lead: eligibility and registration denials, and the insurance-record fixes that stop them repeating.
• Authorization coordinator: CARC 197 denials and the tracker rows behind them.
• Practice administrator or credentialing lead: provider setup denials.
• Coder, with the provider: coding and documentation denials, and appeals that need clinical support.
• A/R follow-up biller: the no-response and underpaid buckets, worked by payer.
• Billing manager: the denial log, its deadlines, appeals and reopenings, and every write-off above a set amount, approved by name.
• Patient accounts: patient-responsibility balances and statements.

One person may hold three of these lines, as long as each line has a name on it; “billing handles it” is how a 197 denial gets fixed on the claim and never reaches the person who books the visit. If billing is outsourced, the billing company owns the work and the practice owns the report.

What goes on the weekly report

One page, the same lines every week, read by the owner or the administrator at a fixed meeting:

• A/R over 90 days by date of service, in dollars and claims, split into the four buckets, with last week’s figures beside them.
• Denials posted this week by step, and the top three CARC and remark pairs by dollars.
• Denials with a deadline in the next 30 days and no action recorded.
• Appeals and reopenings sent, decided and paid, by payer.
• Underpayments found and recovered, by payer.
• Write-offs above the set amount, each with its reason and the name that approved it.

Illustrative example: a hypothetical practice’s page shows $61,000 over 90 days: $19,000 with no response, $24,000 denied, $7,000 underpaid and $11,000 in patient balances. The no-response line comes first: a status check that turns up claims never accepted moves them to the rejection queue the same day. The denied line holds 9 claims with deadlines inside 30 days and no action, which is the first hour of next week.

When to keep this in-house, and when outside help earns its fee

If the denial log is sorted monthly, every line has an owner and a deadline, and the 90-plus total is falling, the practice has done the work; outside help would only repeat it. If billing is outsourced, ask the billing company for the denial log by CARC, remark code and payer, and for the aging in four buckets. Asking costs nothing.

An outside look earns its fee when nobody can say which step the denials start at, when the same codes come back month after month, or when old claims are written off without a recorded reason. The Revenue Review takes two weeks; its first pass reads aggregate exports — denials by reason code and payer, adjustments by type, aging by date of service — not patient names, and it ends with a written report that prices each finding and a 90-day plan. It makes no coding or medical-necessity judgment and does not deal with payers for the practice. A free 20-minute call is enough to tell whether it fits.