Common EOB Denials and What They Mean


Understanding why insurance claims you send are being denied can be incredibly frustrating and time consuming.
If you’re like most healthcare professionals, there are probably a thousand things you’d rather be doing than trying to decode why your claims are getting denied.
However, with just a little bit of practice reading Explanation of Benefits documents (EOB’s), it is possible to quickly and easily figure out why your claims are getting denied.
So, with that in mind, we thought it would make for a great topic for discussion!
As a refresher, an explanation of benefits (EOB) is a document that your patient's health insurance company sends you to explain how they processed a claim for medical services you rendered.Â
Unfortunately, denials are common on EOBs, and as we mentioned earlier, can be super frustrating to deal with.
Here are some of the most common EOB denials and what they mean:
- Not a covered benefit: This means that the service you rendered is not covered by your patient’s health insurance plan.
- Pre-authorization required: This means that you needed to get prior authorization from your patient’s health insurance company before rendering the service. Some companies allow these to be backdated. If you are not aware of your insurance company's rules, we recommend giving them a call directly.
- Not medically necessary: This means that your health insurance company does not believe that the service you rendered was medically necessary. Typically, an appeal with treatment notes is necessary.
- Out-of-network: This means that the provider who rendered the services is out-of-network for your patient’s health insurance plan and there may not be any out of network coverage.
- Incorrect coding: This means that the medical codes (CPT or DX) used to bill for the service were incorrect.
- Missing information: This means that there was missing information on the claim form, such as your patient's date of birth or their insurance ID number.
- Contractual Obligation: This means that you have a contractual agreement with that insurance carrier and this portion of the claim must be written off. It is important to know that if 100% of the charge is listed under contractual obligation, there is a change another denial may coexist with it, coding may be wrong, or it is simply not a covered code. However, you can not charge the patient anything for this.
- Timely filing: This means that the claim was not filed in a timely manner, according to your patient’s health insurance plan's rules.
If you receive an EOB denial, you should first contact the health insurance company who issued it to understand the reason for the denial.Â
You may be able to appeal the denial, if you believe that the denial is incorrect.
Here are some tips for appealing an EOB denial:
- Gather all of the relevant information: This includes the EOB, any pertinent medical records, and any other documentation that supports your appeal.
- Write a letter to your health insurance company: The letter should explain why you believe the denial is incorrect and why you deserve coverage for the service you received. Be aware that many insurance companies have their own forms they require you to complete for an appeal and a section on there where you can explain your appeal reasoning.
- Be polite and professional: Even if you are frustrated, it is important to be polite and professional when you appeal an EOB denial.
- Follow up: If you do not hear back from the health insurance company within a reasonable time frame, you should follow up with them.
If you are left with further questions about EOBs, we would love to connect with you.Â
Our team of billing professionals would be happy to guide you.Â
Schedule a free discovery call with us at www.bushidobilling.com!
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