By: Adrianne Matthews

10 Common Clearinghouse Rejection Codes and How to Fix Them

, Director of Professional Services

Clearinghouse rejection codes are critical to understand as a healthcare provider. These rejections do not deny the claim, meaning that you may still receive payment for them. However, they do require attention for that to be possible.

 

What Is a Clearinghouse Rejection?

A medical billing clearinghouse is an intermediary that operates between the healthcare provider and the payer. It facilitates the electronic processing of claims, operating as a bridge between the two parties to ensure medical claims have proper formatting and comply with all payer requirements before they are sent to the payer for further processing. Most often, your practice management system integrates directly with clearinghouses.

When you submit a request for payment, it goes through the clearinghouse first, and if there is some type of discrepancy, the clearinghouse flags this and “rejects” the claim. A clearinghouse rejection can happen for numerous reasons, including:

  • Improper patient information
  • The wrong provider information
  • A lack of documentation
  • Coding mistakes

Clearinghouse rejections in medical billing will delay the payer receiving the claim and, therefore, delay the payment reaching the healthcare provider. The medical billing team must determine what happened, correct the problem, and resubmit the claim. You’ll need to understand the clearinghouse rejection codes used to do that.

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The Most Common Clearinghouse Rejection Codes

Clearinghouse rejections are not uncommon when an inferior process is in place for managing claims. Sometimes, simple typos can lead to complex problems. Other times, you need to supply a significant amount of information. To find out why the clearinghouse rejected the request for payment, look at the code provided to you within that rejection notification.

The following are some of the most common clearinghouse rejection codes and what they mean to you.

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Billing provider name missing/invalid

This is one of the most common clearinghouse rejection codes seen. It occurs when there is an invalid payer ID. This is typically an instant rejection. To fix this problem, you need to use the most up-to-date Payer ID codes. You should receive an updated list of these from the clearinghouses. Before submitting a claim, cross-check this information to ensure you use the most accurate information.

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Invalid or missing procedure code or modifier

A claim with an invalid or missing procedure code indicates the clearinghouse needs the proper procedure code. Medicare, Medicaid, private insurance, and all other major payers use procedure codes to determine the healthcare provider’s reimbursement for a specific type of service provided. This is usually a CPT or HCPC code. Modifiers provide additional details about a procedure, such as the location, complexity, or provider circumstances. If you submit an incorrect code, omit a necessary modifier, or fail to include a required code, the clearinghouse will flag the issue and prevent the claim from moving forward. If you send the wrong code or do not send one at all, the clearinghouse will flag that information and not move the claim forward.

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Invalid date of service

Another common error message is an inaccurate service date or the date on which the service was provided to the patient. Clearinghouses will determine the exact period of service delivery to verify this information. In some situations, improper formatting causes this error. Other times, the date provided may fall outside the insurance payer’s coverage periods. They may indicate the patient was not eligible for that service at the time it was provided.

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Diagnosis code or supplemental code missing or invalid

A claim may be rejected if there is a missing, invalid, or duplicate diagnosis code. These codes help the payer understand the necessity of the medical procedure. These codes must reflect the patient’s condition at the time of providing service. Any mismatch in the diagnosis and the code provided will cause a clearinghouse rejection to occur. To avoid this, ensure these codes are double-checked prior to being placed.

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Invalid place of service code

Seeing “POS code is invalid/incorrect” is another rejection code requiring careful attention. Payers will assign specific codes to the places or locations where care is provided. If a claim is missing accurate information or the POS is invalid for some reason, that can lead to a rejection. A common situation occurs when a healthcare provider operates in more than one location, such as those who offer in-office care as well as hospital or dialysis center care. Be sure to use up-to-date POS codes (these can change from time to time).

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Postal zone or zip missing/invalid

It is not uncommon for typos in postal zones to be a concern. This is usually a simple human-based input error, but it will flag the clearinghouse to reject the claim. This is one of the simplest of fixes that may be necessary, but if the zip seems accurate and the claim was rejected, it may be necessary to use official records, such as the Postal Service’s website, to get accurate zip information.

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Invalid claim data

Claims data could include incomplete or invalid information about the patient or the service description. This often results from data entry errors, such as transposing dates or misspelling a person’s name. Verifying the EDI Payer ID with the insurance company is critical to ensure that you have the most accurate information when completing claims.

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Diagnosis code invalid

Miscommunication is a big factor in what happens with this type of rejection. The claim will receive a rejection if the diagnosis code is valid but not billable. Typically, this happens if the code does not meet the payer requirements. This can be a bit more complex to fix, but you should start by checking the diagnosis code to ensure it follows the most up-to-date ICD-10 guidelines. If that is not the right fix, you may need to adjust the claim to ensure it includes billable diagnosis codes.

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Invalid claim frequency code

If the wrong frequency code is applied to a claim, it can lead to a rejection. Most of the time, this is due to a misunderstanding of the coding requirements. To fix this problem, you need to use valid resubmission codes, for example, 7 for replacement or 8 for void. You also need to verify you are following all payer guidelines, as that can trigger this concern as well.

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Duplicate claim submitted

The clearinghouse will flag a claim that may have already been submitted. This may happen if there is a misunderstanding of submitted claims or a simple clerical error occurs. If you receive this clearinghouse rejection code, ensure the records are accurate and that a previous claim was filed. If there are duplicate details, correct them before you resubmit.

How Benchmark Solutions Assists with Clearinghouse Rejection Codes

Clearinghouse rejections in medical billing are never ideal, but Benchmark’s RCM team can offer solutions. With advanced capabilities through our medical billing software and the RCM team’s experience, it is possible to reduce clearinghouse rejection rates, which directly leads to faster claim approval. Ultimately, that directly impacts your practice’s cash flow and ensures that you are following all best practices in your revenue cycle management.

Benchmark RCM provides a range of rejection management services, including working and communicating with clearinghouses to determine why the rejection happened, tracking and analyzing rejections, and handling the appeals process. With a team that’s highly skilled in coding, preparing, documenting, and submitting claims, you minimize rejections.

Also, note that our medical billing software allows you to optimize the rejection management process through a simple-to-use dashboard. You’ll have coding and billing features that ensure accuracy when submitting claims.

Clearinghouse rejection codes do not have to be a normal component of your healthcare practice’s revenue cycle. Consider the value of utilizing Benchmark RCM’s team with our medical billing software to reduce these risks and delays.

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