How to Reduce Claim Denials: 10 Habits of Practices That Get Paid

The way to reduce claim denials is to stop them before the claim leaves: confirm coverage, capture the right data, code what the note supports, and look at every claim once more before it is sent. Denials rarely come from one big mistake. They come from small gaps repeated every day at the front desk, in the exam room and in billing. The ten habits below close those gaps, in the order a claim meets them.

Why prevent denials instead of working them?

A denied claim costs work twice: once to send it, and again to find the problem, fix it and send it again or appeal. Some denials cannot be recovered at all, for example when the filing window has closed. Every habit here moves the check earlier, to the point where a fix takes a minute instead of a call to the payer.

If you are not sure whether a returned claim was rejected or denied, start with our guide to claim rejection vs denial, because the next step is different for each.

Habits before the visit

1. Verify eligibility before every visit

Coverage changes. Patients switch plans, lose Medicaid, or move into a Medicare Advantage plan without telling you. Run an eligibility check (the 270/271 transaction) before the visit and confirm three things: the plan is active on the date of service, which payer to bill, and whether the service is covered. For recurring services, check again every month. Our insurance eligibility verification checklist lists everything to confirm in the payer's answer.

2. Copy the insurance card exactly

A wrong character in a member ID, or a name that differs from the payer's records, is enough for a claim to fail. Scan both sides of the card, enter the name and date of birth as the payer has them, and record the subscriber and the patient's relationship to them. Ask at every visit whether anything has changed.

3. Ask which plan pays first

When a patient has two plans, the claim must go to the primary payer first. Ask about other coverage at intake: a spouse's employer plan, Medicaid, a supplemental plan, an accident or a workers' compensation claim. For Medicare patients, ask the Medicare Secondary Payer questions. Record the order on the chart so billing does not have to guess.

4. Check prior authorization before the service

If the plan requires authorization and you do not have it, the claim is likely to be denied however good the documentation is. Keep a current list of the services each of your main payers requires authorization for, check it when the service is ordered, and record the authorization number and its dates where the biller will see them. Payer lists change, so review yours on a schedule.

Habits in the note and the codes

5. Code to the most specific diagnosis

A diagnosis code must be billable. In ICD-10-CM, a category that has more specific codes beneath it cannot be billed on its own. Code to the level of detail the note supports, and check that the diagnosis fits the service. A procedure paired with a diagnosis the payer does not accept for it reads as a medical necessity problem.

6. Let the note carry the claim

The claim says what was done, and the note has to prove it. The documentation should support the level of service billed, the time when the code is time based, and the reason the service was needed. Sign notes promptly. An unsigned note means the claim should not go out yet, and a note changed after the claim is sent usually means a corrected claim.

7. Know your modifiers and bundling edits

Some codes are not paid separately when billed together. CMS publishes the National Correct Coding Initiative edits for Medicare, and commercial payers apply their own bundling rules. Use a modifier only when the documentation supports it, never to get a claim past an edit. A missing or wrong modifier is an avoidable reason for a denied line.

Habits before and after the claim

8. Review every claim before it goes

Build a short pause into the process. A claim scrubber or a second look catches missing fields, invalid codes, a wrong payer ID, or a place of service that does not match the visit. If something needs more time, hold the claim rather than sending it and hoping. A claim fixed before it is sent never becomes a denial.

9. Send inside the filing window

Every payer sets a timely filing limit, and the limit depends on the payer and your contract. Medicare's is generally 12 months from the date of service, and a commercial contract can be much shorter. Keep a list of the limits in your contracts, send claims within days of the service, and watch for claims that were sent but never acknowledged. A rejected claim that sits unfixed can run out the clock.

10. Work denials fast and fix the cause

Read the reason on every denial: the claim adjustment reason code (CARC), any remark code (RARC), and the group code that says who owns the balance. Fix the claim and resubmit it, or appeal within the payer's window. Then track the reasons by payer and by cause. If the same reason keeps coming back, the fix belongs upstream: a front desk script, a coding tip, or a new authorization check. Our guide to common claim denial reasons covers each cause and its fix.

How to start with these habits

You do not need to change everything at once. Start where your own denials point.

1. Pull your denials for the last three months and sort them by reason and by payer.
2. Match each reason to the habit above that would have stopped it.
3. Name an owner for each stage: the front desk for eligibility and demographics, clinicians for documentation, billing for coding, review and follow-up.
4. Write each fix as a step in the process, not as a reminder someone has to remember.
5. Review the reason list every month and watch which reasons shrink.

Payer rules differ by payer, plan and state, and they change every year. Check your payer contracts, each payer's provider manual, and the current CMS guidance for Medicare before you change a process.

Frequently asked questions

What is a good claim denial rate?

There is no single number that fits every practice, because payer mix and services differ. Measure your own rate the same way every month (denied claims against claims the payers processed), split it by payer and by reason, and work on the trend.

Can a denied claim be resubmitted?

Often, yes. If the denial came from an error you can fix, such as a code, a modifier or an ID, the payer usually wants a corrected claim. If the payer decided the service was not covered or not needed, the route is usually a reconsideration or an appeal. Each payer sets its own process and deadlines.

Who should own denial prevention?

Everyone who touches the claim. The front desk owns eligibility and demographics, clinicians own documentation, and billing owns coding, review and follow-up. One person should own the denial report and take the patterns back to each group.

How quickly should denials be worked?

As soon as they arrive. Correction and appeal windows are set by each payer and can be short, and a denial is easier to fix while the visit is still recent.

Sources

• Adopted Standards and Operating Rules (HIPAA transactions), CMS
• Medicare Secondary Payer: Your Billing Responsibilities, CMS
• ICD-10-CM Official Guidelines for Coding and Reporting, FY 2027, CMS and the National Center for Health Statistics
• NCCI for Medicare, CMS
• Medicare Claims Processing Manual, chapter 1 (timely filing, section 70.4), CMS
• Medicare Claims Processing Manual, chapter 22 (group codes and reason codes), CMS