Top 10 Reasons Medical Claims Get Denied — And How to Fix Them

The average denial rate for medical practices is 5–10%. For some specialties and some payers, it runs higher. Every denied claim represents revenue that either has to be reworked — at significant staff cost — or written off entirely.

The frustrating reality is that most denials are preventable. They're not judgment calls by the payer. They're administrative errors, eligibility mismatches, and coding issues that can be eliminated with the right processes upstream.

Here are the 10 most common reasons claims get denied, and exactly what to do about each one.

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1. Patient Not Eligible on the Date of Service

What it means: The patient's insurance was inactive, terminated, or changed as of the date they were seen. The claim comes back with a denial code indicating no active coverage.

Why it happens: Employer-sponsored insurance changes on the 1st of each month. Patients lose coverage, switch jobs, or age off a parent's plan — and don't always think to inform the practice.

The fix: Verify eligibility in real-time on the date of service, every visit, every patient. A payer portal like Availity allows instant eligibility checks across thousands of payers. Don't rely on an insurance card from a prior visit.

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2. Prior Authorization Not Obtained

What it means: The payer required pre-authorization for the service, and no auth was obtained before the claim was submitted.

Why it happens: Authorization requirements change frequently. A procedure that didn't need auth last year may require it now. Front office staff may not have checked, or the authorization workflow broke down between the office and the billing team.

The fix: Maintain a running, updated list of payer authorization requirements by procedure and service type. Before any scheduled procedure, confirm whether auth is required and obtain it. Authorization management should be a dedicated workflow, not an afterthought.

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3. Duplicate Claim Submission

What it means: A claim for the same patient, date of service, procedure code, and provider was already submitted — and the payer is rejecting the second submission.

Why it happens: A biller resubmits a claim they think wasn't received. The original claim was already processed or is still in pending status. Systems without claim tracking make this easy to miss.

The fix: Always check claim status before resubmitting. In Waystar or your clearinghouse, a simple claim search by patient and date of service will show whether a claim is in process. Resubmit only after confirming the original was rejected — not just that you haven't seen a payment yet.

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4. Incorrect or Mismatched Patient Information

What it means: The name, date of birth, member ID, or group number on the claim doesn't match what the payer has on file. Payers reject these before even adjudicating them.

Why it happens: Intake errors, typos, or patients who have multiple insurance plans and hand you the wrong card. Transposing a date of birth is surprisingly common.

The fix: Collect a copy (front and back) of the insurance card at every visit. Verify the member ID and group number against what's entered in your practice management system. Even one digit off will cause a rejection.

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5. Coordination of Benefits (COB) Issues

What it means: The patient has more than one insurance plan, and the payer is unsure which is primary and which is secondary — or the billing didn't follow the correct coordination of benefits rules.

Why it happens: Patients with Medicare plus a supplemental plan, working spouses with dual coverage, or children covered under both parents' plans. If the claim goes to the wrong payer first, or the COB information is missing, expect a denial.

The fix: At intake, ask every patient whether they have secondary insurance. Determine primary vs. secondary using standard COB rules (birthday rule for dependent children, employer coverage primary over Medicare for working patients under 65, etc.). Bill primary first, then secondary with the primary's EOB attached.

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6. Service Not Covered Under the Patient's Plan

What it means: The patient's specific plan doesn't cover the service billed. The denial usually includes a code indicating the service is excluded from their benefits.

Why it happens: Coverage varies dramatically between plans — even within the same payer. A patient on a high-deductible plan may have no coverage for certain preventive services. Mental health carve-outs are common and confusing.

The fix: Don't assume coverage. When in doubt, call the payer's benefits line or check the full benefits breakdown in Availity before the service is rendered. Informing the patient upfront about non-covered services — and having them sign an ABN (Advance Beneficiary Notice) for Medicare patients — protects the practice and the patient relationship.

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7. Coding Errors — Wrong CPT, ICD-10, or Modifier

What it means: The procedure code (CPT), diagnosis code (ICD-10), or modifier doesn't meet the payer's requirements for the service. Common examples include using an E/M code at a level that requires supporting documentation the payer doesn't have, or billing a procedure without a required modifier.

Why it happens: Coding rules are updated annually. Payer-specific requirements — like Blue Shield requiring modifier 25 on the same day as a procedure, or Aetna's specific bundling rules — are not universal and must be tracked per payer.

The fix: Keep coders updated on the annual CPT and ICD-10 code changes (effective January 1 each year). Maintain a payer-specific coding rules reference. Run claims through a clearinghouse scrubber (Waystar catches many of these before they reach the payer) before submission.

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8. Timely Filing Limit Exceeded

What it means: The claim was submitted after the payer's deadline for filing. Most payers require claims within 90–365 days of the date of service. Once that window closes, the claim is generally uncollectable.

Why it happens: Claims that get set aside due to eligibility questions, coding holds, or simply falling through the cracks in a busy billing operation.

The fix: Implement a hard rule: no claim sits unsubmitted for more than 3–5 business days from the date of service. Track submission dates in your practice management system. Work your AR aging report monthly to catch anything approaching timely filing limits before it's too late.

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9. Place of Service Code Error

What it means: The place of service (POS) code on the claim — which tells the payer where the service was rendered — doesn't match the service billed, or doesn't match what the payer has for that provider.

Why it happens: A provider who is credentialed for an office setting (POS 11) bills a service with POS 22 (outpatient hospital) without having hospital billing privileges with that payer. Or a telehealth visit is billed with the wrong POS code (should be POS 10 or 02 depending on the payer and service type).

The fix: Maintain a reference of POS codes used by your practice and confirm the provider is enrolled with each payer for each location type. Telehealth billing rules vary by payer and continue to evolve — audit these annually.

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10. Claim Submitted to the Wrong Payer

What it means: The claim went to a payer that is no longer primary, a plan the patient doesn't have, or an incorrect clearinghouse routing.

Why it happens: Outdated payer IDs in your practice management system, routing errors at the clearinghouse, or patient-provided insurance information that was incorrect.

The fix: Audit your payer ID list at least annually. When you see a spike in rejections from a specific payer, investigate whether the payer's EDI routing has changed (it does, especially after acquisitions). Waystar and most clearinghouses maintain updated payer lists — make sure yours is synced.

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The Bigger Picture: Denial Prevention vs. Denial Recovery

Chasing denied claims is expensive. Reworking a denial takes 15–30 minutes of staff time per claim — often more for appeals. At scale, that's a significant operational cost.

The most efficient practices invest in denial prevention: eligibility verification at check-in, authorization management workflows, real-time claim scrubbing before submission, and monthly denial reporting to catch patterns before they become systemic problems.

Denial recovery — working the claims that do get denied — is still necessary. But if your denial rate is above 5%, the problem is upstream, not just in your AR queue.

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Want to know your current denial rate and which payers are causing the most problems? Get a free revenue cycle assessment — we'll pull your data and show you exactly where the money is leaking.