Denied claims cost your practice money and waste staff hours. If you're running an independent practice, you know the frustration when a claim comes back denied for unclear reasons.
Here's what matters: most denials can be prevented, and many can be successfully appealed. This guide shows you how to stop denials before they happen and win appeals when they do.
Insurance carriers reject claims for specific reasons you can fix.
Most common denial reasons:
Missing or wrong patient information on the claim form
Coding errors (wrong diagnosis codes, outdated codes)
Lack of medical necessity documentation
Services not covered under the patient's health benefit plan
Missing authorization before providing medical services
Claims filed too late
Duplicate claims
Good news? You control most of these. Studies show nearly three in four healthcare providers report increased claim denials in recent years, but research indicates 86% of denials could have been avoided.
Stop denials before they start by checking coverage before the appointment.
Verify every time:
Active coverage with the insurance carrier on date of service
Benefits for planned medical services
Copay, deductible, and coinsurance amounts
Referral requirements from primary care physician
Pre-authorization needs for procedures
Correct patient name spelling (must match insurance exactly)
Current policy and group numbers
Don't trust insurance cards alone. Cards show old information. Call the insurance company or use their online portal to verify right now.
Medicare & Medicaid patients may have secondary coverage. Workers' compensation follows different rules. Check carefully for special situations.
Incomplete data gets claims rejected immediately.
Required information:
Patient's full legal name (matching insurance card)
Date of birth
Current address and phone number
Insurance policy and group numbers
Insurance company name and payer ID
Relationship to policyholder (if patient is a family member)
Employer information if required
Secondary insurance if applicable
Keep copies of both sides of the insurance card. The back has important information about where to mail paper claims and authorization phone numbers.
Insurance companies won't pay for services they think are unnecessary. Your notes need to clearly explain why you provided the care you're billing for.
Documentation that supports medical necessity:
What the patient complained about
Detailed history of the problem
Physical exam findings
Your decision-making process
Why you chose this treatment or test
How the service relates to the patient's condition
Your notes should tell a clear story. If you ordered an MRI, show why imaging made sense. Many denials happen because documentation doesn't connect diagnosis codes to procedure codes.
Customizable templates in your EHR can help you document medical necessity consistently and thoroughly.
Coding errors account for approximately 63% of medical billing errors. Using wrong or outdated codes gets claims rejected.
Coding best practices:
Use current ICD-10 diagnosis codes (updated yearly)
Pick the most specific code available
List diagnosis codes by importance (primary first)
Match procedure codes to documented services
Use HCPCS codes correctly for supplies
Add modifier codes when required
Check that diagnosis codes support procedures billed
Different insurance carriers sometimes need different codes for the same service. Medicare claims may need different codes than commercial insurance.
Clean claims get paid faster. Your goal is catching mistakes before the claim goes to the insurance company.
Claims submission checklist:
Patient information matches insurance records exactly
Provider information correct (NPI, tax ID, address)
Dates of service accurate
All required fields completed
Diagnosis and procedure codes valid and matching
Charges reasonable for services
Required attachments included
Many practices use software that checks claims before submission. Amazing Charts' clearinghouse offers internal claim scrubbing before claims are sent, catching errors before they become denials.
Some claims will be denied even with perfect processes. You have the right to appeal any denied claim.
Your appeal rights:
Written explanation of denial reason
Information about appeal process and deadlines
Chance to submit additional documentation
Multiple appeal levels if first appeal denied
Independent review in many cases
Don't ignore denial letters. They have deadlines: typically 30 to 180 days depending on the insurance company. Miss the deadline and you lose your right to appeal.
Read the denial letter carefully. Understanding the exact reason helps you build a stronger appeal.
Common denials and meanings:
"Not medically necessary" = payer doesn't believe service was appropriate
"Service not covered" = patient's plan doesn't include this care
"Prior authorization required" = you should have gotten approval first
"Timely filing exceeded" = claim submitted too late
"Insufficient information" = payer needs more documentation
"Duplicate claim" = they think they already paid
"Incorrect coding" = problem with diagnosis or procedure codes
Some denials are quick fixes. Wrong diagnosis code? Submit a corrected claim. Wrong patient ID? Fix and resubmit. Other denials need formal appeals with supporting documents.
A successful appeal includes evidence proving you provided appropriate care and billed correctly.
Include in your appeal:
Original denial letter
Your appeal letter explaining why denial should be overturned
Complete medical records for date of service
Relevant records from before or after
Lab results, imaging reports, test results
Clinical guidelines supporting your treatment
Letters of medical necessity from specialists if applicable
Proof of authorization if payer claims it's missing
Organize clearly. Put your appeal letter first, then denial letter, then supporting documents in logical order.
Your appeal letter makes your case. Write clearly and professionally. Stick to facts.
Include in your letter:
Patient name, policy number, claim number
Date of service and provider information
Statement that you're appealing the denial
Clear explanation why service was medically necessary
References to attached documentation
Citations to health plan language if denial contradicts coverage
Request for specific action (overturn denial and pay)
Your contact information
Keep emotion out. Don't say the denial was ridiculous. Make a clinical argument with facts.
Address the specific denial reason directly. If denied for lack of medical necessity, explain exactly why service was necessary for this patient.
Send your appeal following the insurance carrier's instructions. Use methods that create proof of delivery.
Submission best practices:
Send by certified mail or overnight mail deliveries if using postal service
Keep copies of everything
Document submission date
Note confirmation or tracking numbers
Follow up in 2-3 weeks if no response
Document every phone call with date, time, name, and discussion
Don't assume they received it. Call to confirm receipt and ask about typical decision timeframe.
If first appeal denied, request second-level appeal. Some plans offer independent external review.
Medicare has five appeal levels with specific deadlines:
Redetermination (first level, file within 120 days)
Reconsideration (second level, file within 180 days)
Administrative Law Judge hearing (third level)
Medicare Appeals Council review (fourth level)
Federal district court (fifth level)
Most Medicare denials resolve at first or second level. Medicare & Medicaid follow specific guidelines that vary by state for Medicaid.
For official Medicare appeals information, visit the CMS Medicare Appeals page.
Preventing denials requires consistent processes.
Create these systems:
Best practice denial rates are considered 5%, while 7% is acceptable. Track your denial rate monthly. If yours is higher, you have room for improvement.
Assign one person to own denial management. This person tracks denials, identifies patterns, coordinates appeals, and updates processes.
Amazing Charts' revenue cycle dashboard provides a clear view of your practice's financial health, including insights into accounts receivable, claim status, and denial trends.
Sometimes denials involve complex cases or large dollar amounts. Consider hiring denial management specialists when:
Appeals involve complex clinical cases
Multiple claims denied for same issue
Dollar amounts justify professional help
Staff doesn't have time for appeals
You're dealing with complex legal requirements
Amazing Charts offers medical billing services that reduce administrative burden and provide expert knowledge of insurance company requirements, helping you improve cash flow without additional overhead.
Denied claims hurt your practice financially. Prevention beats appeals, but when denials happen, systematic appeal processes help you recover legitimate revenue.
Verify insurance before every appointment. Document medical necessity clearly. Submit clean claims with accurate coding. Appeal systematically when denials occur.
Your practice provided legitimate medical services to patients who need care. Getting paid appropriately isn't optional, it's how you keep serving your community.
Need help with denial prevention? Amazing Charts offers support designed for independent practices managing insurance complexity.
Our Medical Billing software supports practices that manage billing in-house by providing denial management tools to help billers quickly identify and resolve claim denials. With detailed denial reasons and guidance on corrective actions, your billing team can work more efficiently and reduce repeat denials.
Contact us to learn how other practices have reduced denials, accelerated reimbursement, and freed up staff time. Better denial management means better cash flow and less frustration.