Decoding Denials for Healthcare RCM Teams
Understanding the what and why behind unique denial codes is a crucial component of RCM. Denial codes serve as indicators as to why claims may be getting rejected. With each unique code representing a specific reason for a denial, knowing what these represent can help you take the necessary steps to recovering lost revenue.
The ability to rapidly decipher denial codes is key when it comes to pinpointing operational inefficiencies, securing revenue, and ensuring optimal financial performance. Simply put, if you can quickly identify and understand denial codes, you can efficiently implement strategies to streamline processes and optimize your revenue cycle.
As a part of our Decoding Denials blog series, we’ll be identifying and decoding common denial codes and outlining ways that teams can prevent or respond to each code. In this blog, we’re going to decode the denial code PR-204. Let’s get into it!
What is Denial Code PR-204
Definition: Denial Code PR-204 means that the claim was denied because the service, drug, or equipment is not covered as part of the patient’s current insurance plan.
Common Cause of Denial Code PR-204
Cause: Denial Code PR-204 can occur as a result of multiple different mishaps. These can include:
- Miscommunication with patient
- Outdated patient insurance information on file
- Billing errors, such as typos or missing information
- Lack of eligibility / coverage verification
Example: Let’s look at a real-life example. A patient, Mike, goes to the dermatologist for an annual skin exam. The dermatologist verifies ahead of the appointment that Mike’s insurance covers this annual check-up. However, during the exam, they realize Mike is in need of a biopsy. The dermatologist removes the area of skin that needs to be biopsied and sends it to the lab. The issue, however, is that the office did not verify that this biopsy would be covered by Mike’s insurance ahead of the procedure. Now, the claim is being denied because insurance was not verified ahead of the services being rendered.
Responsibility: In this case, the portion of the code that says “PR” refers to the fact that it is the Patient’s Responsibility.
Ways to Mitigate Denial Code PR-204
Prevention: Denial Code PR-204 can easily be avoided by taking precautions to ensure that coverage is verified and the patient is eligible to receive the services ahead of the appointment.
These precautions can include:
- Automation to verify claim accuracy
- Clear communication with patient
- Coverage verification ahead of providing care
- Timely submission of claims
- Staying updated with payer updates and changes
Example: This denial code is one reason why eligibility checks are so important. If we think back to our previous example, the provider should run an eligibility verification with Mike’s insurance prior to providing the additional services. Running an eligibility check ahead of the additional services will ensure that both the provider and patient are aware of the coverage before those services are rendered.
How to Address Denial Code PR-204
Response: If you receive Denial Code PR-204, there are a few steps you can take to uncover and address the root of the problem. First, review the claim submission and check for errors. All too often, manual claim entry and submission can lead to typos or outdated information being submitted. From there:
- If the denial is due to an error, you can fix the error and appeal the claim.
- If the denial is due to incorrect or expired insurance information, communicate with the patient to see if they have updated insurance information or if they lack coverage entirely. Then, you can appeal the claim.
- If the denial is accurate and the patient does not have adequate coverage, you can work with them to sort out a payment method and/or plan.
How Adonis Can Help
Verifying patient eligibility is a critical step in ensuring accurate and timely revenue outcomes. By confirming a patient's eligibility prior to providing services, healthcare organizations can avoid costly claim denials and reduce the risk of non-payment. Adonis automates the time-consuming process of verifying a patient's insurance coverage and benefits to ensure that the services being provided are covered under the patient's plan. With Adonis’ automations for patient eligibility, teams can avoid Denial Code PR-204 for good.
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