Differences Between a Rejection and Denial in Medical Billing

Alex Tate
Alex Tate

Guest post by Alex Tate, consultant and digital marketing specialist, CureMD.

Regardless of how brilliant a medical biller is, they are guaranteed to come across rejections and denials from time to time. These terms are frequently used to discuss medical billing claims and are often used interchangeably by even the most experienced team members in the health field. However, a rejection differs vastly from a denial. Additionally, the processes necessary to effectively overturn the ruling of a rejection is different from that of a denial. Understanding these fundamental differences is not only essential for ensuring that medical billing claims can be processed without unnecessary frustration, but will also help increase the efficiency of the revenue cycle and may potentially grow the profitability of the organization you work with.

Claims that do not meet the specific data requirements or the basic format necessary will be rejected, according to the Centers for Medicare & Medicaid Services (CMS). Rejected claims will not be processed because they are not considered to have been “received” by the payor, thus do not make it into the adjudication system. This may sound complicated, but it really isn’t. It simply means that a rejected claim must be resubmitted when the error (or errors) is corrected appropriately. It’s important to note that beneficiaries of a rejected claim cannot be held liable because the services were never actually billed.

Denied claims, on the other hand, have been received by the adjudication system of the payor, and cannot be resubmitted because the payment determination has already been decided upon. A denied claim can, however, be appealed by the request of the payor to necessitate the proper modifications, additional required documents, etc.

Improving Revenue Cycles through Term Clarity

Educating staff members of the differences between a denied or a rejected claim can not only accelerate the appeals process drastically, but also help pinpoint where improvements can be made in the future. For instance, if your team comes across an inordinate amount of rejected claims, you may want to focus additional effort toward improving the process of your claim edits or scrubber to provide your clean claims rate with an added boost. This would likely require the involvement of IT, the business office, and possibly the vendor.

Continue Reading