Decoding Denials for Healthcare RCM Teams
For RCM teams, understanding the significance of unique denial codes is crucial. Denial codes serve as key indicators that offer insight into the reason why claims are getting rejected. Each code represents a specific reason as to why claims are getting denied, and knowing what these codes represent can be a key differentiator in recovering the revenue you deserve. The ability to decipher denial codes is essential for pinpointing operational inefficiencies, securing revenue, and ensuring optimal financial performance. If RCM leaders can quickly identify and understand denial codes, they can efficiently implement targeted strategies to streamline processes and optimize their revenue cycle.
In our Decoding Denials series, we’re defining and decoding common denial codes to outline ways RCM teams can mitigate and respond to each code. In this blog, we’ll decode the denial code PR-242.
What is Denial Code PR-242
Definition: Denial Code PR-242 means that the claim was denied because the services were not provided by network or primary care providers.
Common Cause of Denial Code PR-242
Cause: Denial Code PR-242 can occur as a result of multiple different mishaps. These can include:
- Out of network providers
- Lack of medical necessity
- Lack of prior authorization
- Lack of referral
- Miscommunication with patient or incorrect information
Example: Let’s look at a real-life example. Let’s consider a patient, Sarah, who has health insurance coverage with a particular insurance company. At an appointment with her primary care provider, Sarah complains of ear pain. Her physician refers her to an Ear, Nose, Throat (ENT) specialist for a follow up appointment. Sarah visits the ENT for follow up tests, and their team submits her claim to her insurance company. The claim is then denied, with the code PR-242, because while her primary care physician is in network for Sarah, the ENT was out of network for her insurance.
Responsibility: In this case, the portion of the code that says “PR” refers to the fact that it is the Patient’s Responsibility. Using the example above, if the denial was not a result of a billing error or miscommunication, the cost would fall under Sarah’s responsibility to pay.
Ways to Mitigate Denial Code PR-242
Prevention: Denial Code PR-242 can easily be avoided by taking precautions to ensure insurance is verified ahead of appointments and patient data is accurate and up to date. These precautions can include:
- Ensuring the provider / specialist is in-network
- Ensuring coverage is verified ahead of providing care
- Potentially obtaining prior authorization and/or referrals
- Automated claim scrubbing
- Staying up to date with payer policies
- Clear communication with patient
Example: This denial code is one reason why benefits verification is important. If Sarah’s insurance was verified ahead of the specialist appointment, she would have been notified that the ENT’s office was out of network for the testing/services she required. Then, Sarah could have decided if she wanted to move forward and pay out of pocket for the services, or find an in network ENT.
How to Address Denial Code PR-242
Response: If you receive Denial Code PR-242, there are a few steps you can take to uncover and address the root of the problem. First, you can review Sarah’s insurance policy to uncover if the denial is a result of an error or if she is out of network. If Sarah is out of network, your team can work with her to create a payment plan.
How Adonis Can Help
Ensuring a patient is in-network for services is a critical step in ensuring timely revenue outcomes. By confirming a patient’s coverage ahead of providing services, you can set expectations with the patient and let them know if they are going to be responsible for 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 benefits verification and patient eligibility, your team can avoid Denial Code PR-242.
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