Why Claims Get Denied: 20 Most Common Denial Reasons
- Admin
- Dec 29, 2025
- 3 min read
Claim denials are one of the biggest threats to a medical practice’s cash flow. Even minor mistakes can lead to delayed or lost revenue. Understanding the most common claim denial reasons is the first step toward reducing denials and strengthening your revenue cycle.
What Is a Claim Denial?
A claim denial occurs when an insurance payer refuses to reimburse a submitted claim, either partially or fully. Denials increase administrative workload, delay payments, and—if not appealed correctly—can result in permanent revenue loss.
At Sentinel Billing Solutions, we help practices identify, correct, and prevent denials through proactive revenue cycle management (RCM) strategies.
20 Most Common Medical Claim Denial Reasons
Eligibility & Coverage Issues
1. Patient Not Eligible on Date of Service
Coverage was inactive or terminated when services were rendered.
2. Incorrect or Missing Insurance Information
Errors in member ID, group number, or payer details lead to automatic rejections.
3. Service Not Covered Under Patient’s Plan
The procedure is excluded or limited by the patient’s policy.
4. Out-of-Network Provider
The provider or facility is not contracted with the payer.
5. Referral or Authorization Missing
Required referral or prior authorization was not obtained.
Coding & Documentation Errors
6. Incorrect CPT or HCPCS Code
The procedure code does not accurately reflect the service performed.
7. Invalid or Missing ICD-10 Diagnosis Code
Diagnosis codes are incorrect, outdated, or incomplete.
8. Diagnosis-Procedure Mismatch
The diagnosis does not justify the billed service based on payer rules.
9. Missing or Invalid Modifiers
Required modifiers (e.g., -25, -59) were omitted or used incorrectly.
10. Unbundling of Services
Procedures that should be billed together were billed separately.
Medical Necessity & Policy Issues
11. Lack of Medical Necessity
Documentation does not support the need for the service.
12. Frequency Limit Exceeded
The service was performed more often than allowed by payer guidelines.
13. Experimental or Investigational Service
The payer considers the procedure experimental or not evidence-based.
14. LCD/NCD Policy Not Met
The claim does not meet Medicare Local or National Coverage Determinations.
15. Duplicate Claim Submission
The same claim or the procedure was submitted more than once.
Administrative & Billing Errors
16. Timely Filing Limit Exceeded
The claim was submitted after the payer’s filing deadline.
17. Missing Required Attachments
Clinical notes, operative reports, or supporting documents were not included.
18. Incorrect Billing Provider vs. Rendering Provider
Provider roles were incorrectly assigned on the claim.
Payment & Coordination Issues
19. Coordination of Benefits (COB) Not Updated
Primary and secondary insurance information is incorrect or missing or is not properly updated with the payers.
20. Service Bundled Into Another Payment
The payer considers the service included in a previously paid procedure.
How Claim Denials Impact Medical Practices
Unchecked denials can result in:
Delayed cash flow
Increased AR days
Higher write-offs
Staff burnout from rework
Compliance and audit risks
Preventing denials is far more cost-effective than appealing them.
How Sentinel Billing Solutions Helps Reduce Denials
At Sentinel Billing Solutions, we take a proactive, data-driven approach to denial prevention and resolution. We do a front end attack on reviewing the claims and clinical documentation to reduce the denials.
Our Denial Management Strategy Includes:
Eligibility and authorization verification
Pre-submission claim scrubbing
Accurate coding and documentation review
Denial trend analysis by payer and reason
Timely appeals with complete documentation
Continuous workflow improvement
Best Practices to Prevent Claim Denials
Verify insurance and benefits before every visit
Obtain referrals and authorizations in advance
Ensure documentation supports medical necessity
Use payer-specific coding and billing rules
Monitor denial reports and address root causes
Ready to Reduce Claim Denials and Improve Cash Flow?
If your practice is struggling with frequent denials or delayed reimbursements, Sentinel Billing Solutions can help you regain control of your revenue cycle.
Call: 714-786-1000
Website: https://www.sentinelbillings.com/
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