{"id":14360,"date":"2021-10-01T18:51:57","date_gmt":"2021-10-01T18:51:57","guid":{"rendered":"https:\/\/www.medicalbillersandcoders.com\/blog\/?p=14360"},"modified":"2025-08-11T11:03:44","modified_gmt":"2025-08-11T11:03:44","slug":"cause-of-denials-and-trends-analysis-by-mbc","status":"publish","type":"post","link":"https:\/\/www.medicalbillersandcoders.com\/blog\/cause-of-denials-and-trends-analysis-by-mbc\/","title":{"rendered":"Analyzing Claim Denial Trends for 2020"},"content":{"rendered":"

Hospitals are receiving more claim denials from payers, with the average rate increasing by 23 percent in 2020 compared to 2016, according to a research report conducted by Change Healthcare. The analysis includes 102 million hospital transactions valued at $407 billion in total charges across more than 1,500 U.S. hospitals. <\/span><\/p>\n

Since 2016, the denial rate for hospital claims has been increasing steadily but the COVID-19 pandemic has accelerated this upward trajectory, pushing the denial rate up from 20 percent in the second quarter. To educate the providers, we shared this analysis of the Cause of denials trends for 2020, as most of these claim denials are potentially avoidable.<\/span><\/p>\n

Top Cause of Denials<\/span><\/h2>\n

For the year 2020, 26.60 percent of total denied claims are due to a lack of eligibility and registration. Eligibility and registration have been a top denial for the last few years but its percentage has spiked in last year. Claim denials due to eligibility and registration error constitute a one-fourth portion of total claim denials. <\/span><\/p>\n

It signifies the importance of a strong front-end team that is good at eligibility and benefits verification. A high percentage of missing or invalid claim data signifies the importance of the back-end team whose contribution is neglected by saying it\u2019s a data entry process.\u00a0<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Cause of Denials<\/b><\/td>\nPercentage<\/b><\/td>\n<\/tr>\n
Registration \/ Eligibility<\/span><\/td>\n26.60%<\/span><\/td>\n<\/tr>\n
Missing or Invalid Claim Data<\/span><\/td>\n17.20%<\/span><\/td>\n<\/tr>\n
Prior Authorization\/ Certification<\/span><\/td>\n11.60%<\/span><\/td>\n<\/tr>\n
Service Not Covered<\/span><\/td>\n10.60%<\/span><\/td>\n<\/tr>\n
Medical Documentation Requested<\/span><\/td>\n9.20%<\/span><\/td>\n<\/tr>\n
Medical Necessity<\/span><\/td>\n6.60%<\/span><\/td>\n<\/tr>\n
Unknown<\/span><\/td>\n6.40%<\/span><\/td>\n<\/tr>\n
Untimely Filling<\/span><\/td>\n5.40%<\/span><\/td>\n<\/tr>\n
Medical Coding<\/span><\/td>\n4.80%<\/span><\/td>\n<\/tr>\n
Provider Eligibility<\/span><\/td>\n0.90%<\/span><\/td>\n<\/tr>\n
Avoidable Care<\/span><\/td>\n0.70%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Breakout of Top Three Denial Causes<\/span><\/h2>\n

The top three denial reasons constitute more than 50 percent of overall claim denial reasons so we provided a breakout of these top three denial reasons. Most of the time front-end team fails to get secondary insurance information and fails to assign benefits. Denials caused<\/a> due to benefits maximum and plan coverage are signs of absence of eligibility and benefits verification process.\u00a0<\/span><\/p>\n\n\n\n\n\n\n\n
Registration\/Eligibility (26.6%)<\/span><\/td>\n<\/tr>\n
Coordination of Benefits<\/span><\/td>\n41.5%<\/span><\/td>\n<\/tr>\n
Benefit Maximum<\/span><\/td>\n28.4%<\/span><\/td>\n<\/tr>\n
Plan Coverage<\/span><\/td>\n23.3%<\/span><\/td>\n<\/tr>\n
Other<\/span><\/td>\n6.8%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Claim data includes patient demographics, insurance information, diagnosis codes, procedure codes, modifiers, date of service, rendering provider information, and billing information. Wrong inputs in any of these claim fields will lead to claim denial.\u00a0\u00a0\u00a0<\/span><\/p>\n\n\n\n\n\n\n
Missing or Invalid Claim Data (17.2%)<\/span><\/td>\n<\/tr>\n
Unspecified Billing Issue<\/span><\/td>\n73.2%<\/span><\/td>\n<\/tr>\n
Missing\/Invalid EOB<\/span><\/td>\n17.5%<\/span><\/td>\n<\/tr>\n
Other<\/span><\/td>\n9.3%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Successful prior authorization or pre-certification requires submitting authorization\/ certification requests with required documents. With prior authorization or pre-certification request, the payer should be convinced about medical necessity.\u00a0<\/span><\/p>\n\n\n\n\n\n\n\n
Authorization\/Pre-Certification (11.6%)<\/span><\/td>\n<\/tr>\n
Invalid Authorization<\/span><\/td>\n61.2%<\/span><\/td>\n<\/tr>\n
Authorization Denied<\/span><\/td>\n25.9%<\/span><\/td>\n<\/tr>\n
Services Exceed Authorization<\/span><\/td>\n7.5%<\/span><\/td>\n<\/tr>\n
Other<\/span><\/td>\n5.4%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Reasons for Increase in Denials<\/span><\/h2>\n

As we are analyzing claim denial trends for 2020, let\u2019s look at the major reasons for the rapid increase in claim denials.\u00a0<\/span><\/p>\n