7 Reasons for Claims Keep Getting Denied | How to Deal With It

Summary

Insurance claim denials can slow down your payments and hurt your cash flow. Most denials happen because of small, avoidable mistakes like wrong patient details, incorrect codes, missing authorizations, or late submissions. The good news is, you can fix most of these issues with a few simple steps, like double-checking data, verifying insurance coverage, and using the right billing tools. If you're still struggling, denial management services or a professional billing company can help clean up your process and get you paid faster.

Common Insurance Claim Denials and How to Avoid Them

A quick guide to the most frequent claim denials and simple steps to keep your payments on track. Here are the reasons that are causing your claim to get denied.

1. Missing or Incorrect Patient Details

One of the most common reasons insurance claims get denied is due to simple errors in patient information. This includes typos in the patient's name, wrong date of birth, incorrect insurance ID, or even mismatched gender markers. These may seem like small issues, but insurance companies use this data to match the claim with the patient’s active policy. If anything doesn’t line up, the claim may be rejected automatically by the payer’s system.

These kinds of mistakes usually happen during patient intake or when manually entering information into the billing system. They’re easy to overlook but can lead to unnecessary delays and extra work for your billing team.

How to fix it: 

Make these simple steps part of your routine:

• Always verify patient details at check-in, even for returning patients
• Match the name, date of birth, and insurance ID with the card on file
• Use digital intake forms to reduce handwriting and spelling errors
• Review the patient information one last time before claim submission

2. Wrong or Incomplete Billing Codes

Every insurance claim depends on accurate medical coding. If you use outdated or incorrect CPT, ICD-10, or HCPCS codes, the payer might reject the claim outright. Even a small mistake like a missing modifier or mismatched diagnosis and procedure code can cause delays or full denials.

These issues often happen when billing teams rush through submissions, rely on old codebooks, or fail to match the treatment with the correct diagnosis. Some claims are denied simply because the codes don’t support the medical necessity of the service.

How to fix it:

Keep your coding process clean and current with these best practices:

• Use the latest versions of CPT, ICD-10, and HCPCS coding manuals
• Train staff regularly on code changes and payer-specific rules
• Use billing software with real-time code validation and alerts
• Match diagnosis codes carefully with the procedures performed
• Review claims before submission to catch missing or mismatched codes

3. No Prior Authorization Obtained

Many insurance plans require prior authorization before certain tests, procedures, or medications can be approved. If you provide the service without getting this pre-approval, the insurance company may deny the claim even if the treatment was necessary.

This happens often with advanced imaging (like MRIs), surgeries, brand-name medications, or behavioral health services. Missing this step can lead to full claim rejections and lost revenue, especially for high-cost services.

How to fix it:

Add a simple system to make sure prior auths don’t slip through:

• Check the patient’s benefits during scheduling to see if prior auth is required
• Keep a list of services that commonly need approval (based on payer rules)
• Assign one team member to handle and track authorizations
• Get approvals in writing and attach them when submitting the claim
• Don’t rely on verbal confirmations, always document everything

Handling authorizations properly is one of the easiest ways to reduce denials and protect your revenue. If you handle complex treatments often, consider outsourcing your prior authorization process to a trained team that specializes in these tasks.

When done right, accurate coding not only prevents denials but also helps justify medical necessity, which supports faster approvals. It’s also a core part of strong denial management services for any healthcare practice.

4. Services Not Covered by the Insurance Plan

Not all insurance plans cover the same services. What’s approved under one policy may be denied under another. If you provide a service that isn’t listed in the patient’s benefits like cosmetic procedures, some medications, or experimental treatments, the claim will likely be denied.

This kind of denial is frustrating for both patients and providers, especially when it leads to unexpected bills. In many cases, patients don’t realize what’s not covered until it’s too late.

How to fix it:

Avoid surprise denials by verifying benefits ahead of time:

Check the patient’s coverage directly with the insurance company
Ask about service-specific exclusions or coverage limits
Confirm if a referral or authorization is required for the service
Educate the patient about potential out-of-pocket costs
Document the verification call or portal screenshot for your records

Spending a few extra minutes on eligibility and benefits verification can prevent unnecessary billing issues later. It’s also one of the most effective ways to reduce denials before they even happen.

5. Out-of-Network Provider or Facility

Insurance plans usually have a list of approved providers and facilities called a network. If a patient gets care from someone outside that network, the claim can be denied or only partially paid. This often leads to surprise bills for patients and reduced collections for providers.
This type of denial is common when providers refer patients to specialists or labs without checking network status. It can also happen when insurance plans change and the provider is no longer in-network without realizing it.

How to fix it:

Avoid network-related issues by adding these steps to your process:

• Confirm the provider’s network status before scheduling high-cost services
• Check if the patient has out-of-network benefits (some plans do)
• If in-network options aren’t available, request a GAP exception from the payer
• Keep your credentialing up to date with major insurance companies
• Let patients know upfront if a provider is out of network

If out-of-network care is unavoidable, documenting your attempts and requesting exceptions can help you recover payment. For ongoing issues, a credentialing and contracting review may help secure more in-network status and improve overall claim acceptance.

6. Claims Filed After the Deadline

Every insurance company has a time limit for submitting claims; this is called the timely filing deadline. If you miss that window, the claim may be denied automatically, no matter how accurate or necessary the service was. Deadlines can vary by payer, but they typically range from 90 to 180 days after the date of service.

Late submissions often happen when there are delays in documentation, staff shortages, or problems with billing software. Sometimes, clinics don’t even realize the deadline has passed until the denial comes in.

How to fix it:

Stay on top of filing timelines with a few simple habits:

• Keep a list of filing deadlines for each insurance company you work with
• Submit claims within 24 to 72 hours of the service when possible
• Use billing software that flags aging claims before they expire
• Train your team to follow up quickly on missing documentation
• If a claim is late for a valid reason, submit an appeal with proof

Staying organized and proactive can help you avoid avoidable denials and protect your revenue. It's one of the most practical ways to reduce denials without adding more stress to your billing team.

7. Duplicate Claim Submissions

A duplicate claim happens when the same service is billed more than once for the same patient, same date, and same provider. Even if it’s an honest mistake, payers will usually reject the second submission, and in some cases, they may flag it for review or delay payment on both claims.
This often occurs when practices don’t receive a quick update on claim status and assume the first one didn’t go through. It can also happen during system migrations or when resubmitting claims without correcting the original issue.

How to fix it:

Prevent duplicate submissions by improving your claim tracking process:

• Use billing software that tracks claim statuses in real time
• Set a clear process for checking whether a claim has already been sent
• Resubmit only when necessary, and include correction codes if required
• Educate staff on how to identify and fix rejected claims instead of re-billing them blindly
• Keep organized records of all submissions and responses from payers

Duplicate claims can hurt your approval rates and increase your denial volume. A good denial tracking system helps identify these patterns early and supports cleaner, faster claim resolutions.

Conclusion

Claim denials are a common part of healthcare billing, but they don’t have to keep happening. Most denials can be avoided by checking patient details, using the right codes, verifying coverage, and submitting claims on time.

Fixing small issues early helps protect your revenue and speeds up payments. If you're seeing too many rejections, it may be time to improve your internal process or get support from a team that specializes in denial management services.

And if handling everything in-house feels overwhelming, working with a professional billing company can take the pressure off your team and ensure your claims are submitted clean, accurate, and on time.

Frequently Asked Questions (FAQ)

1. What is the most common reason for claim denials?

The most common reason is missing or incorrect patient information, like a wrong name or insurance ID number. Even small typos can cause a claim to be rejected.

2. How can I avoid denials related to medical coding?

Use up-to-date CPT, ICD-10, and HCPCS codes, and make sure your coding matches the diagnosis and treatment provided. Regular staff training and billing software can also help reduce errors.

3. What happens if I submit a claim after the deadline?

Most insurance companies will deny late claims automatically. To avoid this, submit claims as soon as possible and keep track of each payer’s filing deadlines.

4. Why is prior authorization important?

Some services, like surgeries or specialty medications, require approval before treatment. If you skip this step, the insurer may not pay even if the care was needed.

5. What are denial management services?

Denial management services help healthcare providers track, analyze, and fix rejected claims. These services can prevent future denials and improve your overall revenue cycle.

6. Can a professional billing company help reduce denials?

Yes. A professional billing company has the tools, training, and experience to catch common errors before claims are submitted. They can also follow up on denials quickly and accurately.