One-third of all submitted claims get denied or ignored on the initial submission.
That doesn’t sound great, but if you flipped the script you’re still receiving 66% of your claim revenue. That’s still pretty good, right?
Well, let’s look at it on a large scale. In 2021 hospitals lost an average of $5 million to their total revenue due to denied claims.
Even if you don’t work at a hospital, those losses trickle down to similar numbers for smaller healthcare organizations.
The point I’m trying to make is that denials lead to massive financial bottlenecks that could result in serious losses. In some cases, those losses have been so significant that healthcare organizations have had no choice but to close their doors for good.
But, if they’re an issue across the entire healthcare industry that even giant hospital systems struggle with…what can you do?
The truth is that 60% of denied claims are never resubmitted. Choosing not to resubmit claims that have a denied status is literally leaving money on the table. There’s no way of sugar-coating.
There’s a pattern to claim denials. In fact, it’s very likely that you have multiple returned claims with the same denial code. In other words, having a sound denial management process means understanding those patterns and educating yourself and your staff on fixing them.
It just so happens that one of the most common denial codes CO 252. But what does that code mean?
CO 252 starts with “CO”. This “CO” portion stands for “Contractual Obligation”. A denial that includes “CO” is one that signifies a denial based on the contract and as per the fee schedule amount. CO is one of the biggest and most common categories of denials. It has more than 200 distinct code combinations.
Insurance companies often place denials into the CO category when one of two things happen. Either, there is a joint payer/payee regulatory obligation that leads to an adjustment not attributable to the member. Or the provider’s fees surpass the reasonable and customary amount for which the patient is accountable.
CO 252 means that the claim needs additional documentation to support the claim. That’s pretty vague, isn’t it? Well, this denial code should come with a remittance advice remark code or RARC attached to it. It can’t exist by itself.
There are over 1,200 different RARC codes that exist. But, luckily the Council for Affordable Quality Healthcare’s “CORE” rules states that usually only around 111 of those 1,200 codes apply to denial code CO 252. To make things even more streamlined, Etactics has been in business as a medical claims clearinghouse for over 25 years…so we can synthesize that list down even more. some of the most common RARCs that we see attached alongside CO 252 include; N479: Missing Explanation of Benefits (Coordination of Benefits or Medicare Secondary Payer).; N710: Missing notes.; N712: Missing summary.; N714: Missing report.; And N716: Missing chart.
Understanding denial codes like CO 252 and the associated RARC codes is crucial for efficiently managing denied claims. With over a third of all claims initially denied or ignored, the financial implications for healthcare organizations are significant. By equipping your team with the knowledge to address these denials properly, you can avoid unnecessary revenue losses and improve your financial health. Remember, every claim that remains unresolved is revenue that could have supported your organization’s mission and services. Don't let these opportunities slip through your fingers. Start taking control of your denial management today and turn those denials into approvals. With the right approach and resources like Etactics, you're not just submitting claims; you're securing your organization's financial future.
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