MARIETTA, GA – A medical banking organization is leading efforts to standardize the use of denial codes by health plans.
Agreement on a taxonomy of denial codes will provide benefits to both providers and payers and facilitate efforts to resolve issues with the claims process.
The effort is being led by the Medical Banking Project, which provided an update of its efforts at its national Medical Banking Institute last month in Marietta, Ga.
Standardization does exist around use of remittance codes, said Foster North, senior vice president for business development for CareMedic Systems, Inc., chairman of the committee working on the project.
The banking group wants to standardize a matrix of associated denial codes so healthcare organizations are better able to quickly understand why claims are being denied.
“The lack of standards represents a processing bottleneck for understanding why medical claims are denied,” he said.
For example, having a standard denial code for rejecting claims that lack pre-authorizations could help a provider head off such rejections in the future, by identifying trends and working with the department in the facility that should ensure that services are pre-authorized by payers before they’re delivered.
The Medical Banking Project wants to develop an online database of denial codes and update them quarterly, said Maureen Turo, vice president and healthcare market specialist for the treasury services division of BNY Mellon.
“There are hundreds of reason codes,” she said. “For providers, it’s an overwhelming problem to deal with so many codes.”
Having codes that delineate the specific reason for a denial will help providers follow up and to know what parties need to be contacted to correct errors or for additional information.
The group is having its initial matrix reviewed; it expects to build use cases for the slimmed-down matrix of denial codes in the near future.