Handling Denials For No Coverage or Coverage Terminated

One of the most important parts of billing is handling denials. Many providers’ offices don’t handle denials and end up losing thousands of dollars a year as a result. In fact, I saw a statistic once that said that 47% of denied claims don’t ever get appealed. That is outstanding! Obviously based on that statistic the insurance companies have a great incentive to deny claims.

There are three reasons that denials don’t get appealed. The first is that the denial is correct and there is nothing to appeal. In that case, there is nothing to be done except bill the patient if that is appropriate. The second reason is because the person responsible for handling the denials doesn’t have the time to handle them. This problem can be rectified. If the right systems for handling denials are put into place then they can be handled in less time. Most time spent on denials is figuring out what to do about them, which brings us to reason number three.

The third reason that denials don’t get appealed is that the person responsible doesn’t know what to do about it. Many times they understand what the denial is for, but aren’t sure what steps to take to rectify it. So over the next several months we are going to be covering the most common denial reasons and how they can be handled.

One denial that is very common is “denied for no coverage or coverage terminated.” Seems pretty straight forward. But what do you do? There are actually a couple of things. First of all, receiving this denial does not mean that it is correct. Our local BCBS denies claims for this reason more often than I use a restroom. Many times it is just because BCBS issued the patient a new ID number or changed just the 3 letter prefix. It can actually be quite frustrating. If we receive a denial from BCBS for this reason we go to the BCBS website and do a search on the patient. In most cases we can pull up the correct ID number and resubmit the claim.

If the denial is for a company that does not have those issues, the next thing I do is look at the patient’s claim history. Has the payor been making payments but suddenly stopped? In some cases the payor may have paid claims before and after the date of service they are denying. In that case a call must be made to the insurance carrier to question the denial. Hard to believe but they actually do make mistakes! (sarcasm)

Lastly, if the denial appears correct, or if we cannot find any additional information thru the website or a phone call, then the patient must be contacted. Usually we send out a patient statement with the charges, and a note stating “Your insurance carrier states your coverage was terminated. Please contact
our office with updated insurance information.” Many times patients forget to notify the provider when they do have an insurance change. Receiving a bill will prompt them to notify you. Usually they call us and give us the updated information over the phone and the claim can get resubmitted.

The most important thing here is that you come up with a system that you will use every time you receive this denial. That way you won’t waste time trying to figure out what to do each time, and the denial will get handled promptly. If you do this for each denial you receive, all denials will be handled and
it will cut down on losses.


9 Responses to “Handling Denials For No Coverage or Coverage Terminated”

  1. Lisa Says:

    WOW! I just received that error message today and was going to close it. Thanks again for information that makes my service even better!

    • Laura Laprise Says:

      I always verify and never assume. There are payers that deny incorrectly. Front office should have verified at time of visit, but this may not always happen. Never assume this is a correct denial…always follow up with a phone call or search the carrier website for the info and print or document proof. Contact the pt by phone call and let them know claim denied and ask them for updated insurance info.

  2. Claudia Says:

    Great advice. I have found that certain insurances tend to have ‘issues’ that cause claim denials, so don’t always believe their reasons on the EOB. Getting the patient involved when all else fails is helpful because an insurance company will more likely listen to the person who is paying premiums rather than the person who is trying to extract a payment from them.

  3. Nidhi Says:

    How do you deal with such a denial when the insurance recoups the money after 2 yrs or later stating pt. did not have coverage 2 yrs before??

    • solutionsmedicalbilling Says:

      Well first I verify if they truly did not have coverage. Then I contact the patient to see if they had a different coverage at that time. If they did, I bill that one and then appeal the timely filing stating that the other insurance was billed and paid, and didn’t retract the payment until now. I include a copy of the other insurance retraction to show the date.


      • gr Says:

        That is the step i follow also but some of the insurance stick to there filing limit and deny late and as per contract cannot bill the patient, therefore the 1st ins paid took back the money , 2nd ins do not want to pay and cannot bill the patient. What is the next step!

      • solutionsmedicalbilling Says:

        I find that most carriers will accept this appeal as long as you act quickly when the claim is retracted. There are always a couple of sticklers that deny the appeal. There is really nothing you can do except appeal to the highest level.


  4. Doren Says:

    How do you appeal if you are out of network with the patients coverage plan, but found out later that the patient needed to use a specific facility for a particular services.?

    • solutionsmedicalbilling Says:

      If you are saying that the claim denied becuase the patient must use an in network provider then there’s really nothing you can do. It is the patient’s responsibility to know their plan. However we all know that most patients do not know and the provider ends up on the short end.


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