For those working in the medical billing sector, understanding the difference between a rejected claim and a denied claim is incredibly important. Let’s take a look at these two issues, giving you the chance to build the understanding you need.
A rejected claim is one that hasn’t been processed yet due to the discovery of one or more errors. It’s preventing the insurance company from paying the bill as it’s written.
Claims will usually be rejected when errors are discovered in the paperwork. This could be coding issues, contact information mistakes, and a range of other information, all of which can stop the insurance company from paying the bill in the claim.
A denied claim is different and is usually more serious. Insurance companies will deny claims when they believe that they are unpayable, and this is usually when they discover a violation of the contract they have with their patients. Denied claims will usually occur after a claim is processed, but before it is paid.
In both of these cases, the payer will return the claim to the biller with an explanation of the problem. A rejected claim can be corrected and resubmitted, but a denied claim must be appealed before resubmission, a much more costly and time-consuming process.
In either case, the insurance company will return the claim to the biller. This will usually come with an explanation of the issue, at which point action needs to be taken. When claims are rejected, they can be resubmitted right away with the correct information. When they are denied, though, an appeal will have to be made, and this can take a lot of time.
Both denials and rejections have to be taken seriously, and your billing team needs to react to them as quickly as possible. Keeping in touch with both your patients and their insurance companies can make this process easier.