10 common denials in medical billing and ways to avoid them

Common denials in medical billing follow recognizable patterns. Payers use standardized codes to explain why they withheld payment and most denials trace back to a short list of causes: missing information, eligibility mismatches, authorization gaps and coding that does not align with documentation. Understanding those patterns and knowing what actually happens once a claim gets appealed, separates practices that recover revenue from practices that write it off.

What counts as a denial versus a rejection

These two terms get used interchangeably, which causes confusion during staff training. A rejected claim never reaches adjudication. It fails a front-end edit, such as a missing field or an invalid NPI and bounces back before the payer ever reviews it. A denied claim has been processed. The payer looked at it and decided not to pay, either in full or in part and communicated that decision through a Claim Adjustment Reason Code (CARC) on the Electronic Remittance Advice (ERA) or Explanation of Benefits (EOB).

Rejections are usually a quick fix. Denials often require documentation, a corrected claim, or a formal appeal. Billing staff who treat every kickback the same way tend to resubmit denials as if they were rejections, which either triggers a duplicate-claim denial or simply repeats the same mistake.

The 10 most common denials in medical billing

The list below reflects the denial categories that appear most consistently across payer types, based on CARC data and revenue cycle reporting from organizations including HFMA and Kodiak Solutions.

1. Missing or incomplete information (CARC CO-16)

A wrong date of birth, an incomplete subscriber ID, or a missing NPI stops a claim before it is adjudicated correctly. This is one of the most frequent denial codes across every payer type, largely because registration errors compound: one mistyped field at check-in can travel through the entire claim.

2. Eligibility and coverage issues (CARC CO-27, CO-31 and CO-109)

Coverage may have lapsed, changed plans or never included the billed service. According to a 2024 issue brief from the Commonwealth Fund, coverage gaps and plan changes remain a leading driver of billing surprises for patients and denied claims for providers alike.

3. Duplicate claim submission (CARC CO-18)

This happens when the same service for the same patient and date gets billed twice, often because staff resubmit before confirming the original claim’s status.

4. Lack of prior authorization (CARC CO-197 or CO-15)

Some services require pre-approval before they are rendered. A missing, expired, or mismatched authorization number is one of the fastest-growing denial categories. The three largest Medicare Advantage insurers denied prior authorization requests for long-term acute care and inpatient rehabilitation at rates as high as 65 percent in mid-2024. According to a June 2026 report from the HHS Office of Inspector General.

5. Diagnosis code does not support medical necessity (CARC CO-11 or CO-50)

The ICD-10-CM code on the claim has to justify the service billed. A diagnosis that is too general, outdated, or unrelated to the procedure gives the payer grounds to deny.

6. Procedure code mismatch or bundling conflict (CARC CO-97 or CO-181).

Some CPT and HCPCS codes cannot be billed together on the same date, or a code no longer aligns with current payer edits. National Correct Coding Initiative (NCCI) bundling updates change periodically and claims coded against outdated edits get flagged automatically.

7. Non-covered or excluded services (CARC CO-96 or PR-96)

The service may be clinically appropriate but excluded from the patient’s specific plan, whether because it is elective, experimental under that payer’s policy, or simply not a covered benefit.

8. Timely filing limit exceeded (CARC CO-29)

Every payer sets a deadline for claim submission and those deadlines vary widely, from 90 days for some commercial plans to a full year for traditional Medicare. Miss it and the claim is denied regardless of how clean it otherwise is.

9. Coordination of benefits errors (CARC CO-22)

When a patient has more than one active insurance plan, the payer needs to know which one is primary. Missing or outdated COB information triggers an automatic denial until the order of responsibility is clarified.

10. Modifier errors (CARC CO-4)

A missing or inconsistent modifier, such as billing bilateral procedures without the correct laterality modifier, can make an otherwise accurate claim unreadable to the payer’s adjudication system.

Prevention for most of these categories comes down to the same handful of habits: verify eligibility and benefits before the appointment, confirm authorization numbers match the exact CPT code billed, keep diagnosis coding current with the latest ICD-10-CM updates and track payer-specific filing deadlines instead of assuming a single internal standard applies to every plan.

What happens when a denial is appealed

This is where the terminology gets confusing for newer billers and students, so it is worth defining clearly.

What does it mean when an appeal is overturned?

An overturned appeal means the payer reversed its original denial and agreed to pay the claim, in full or in part. The claim moves from denied status to approved status and payment is issued according to the terms of the original claim.

Does overturned mean the claim was approved?

Yes. “Overturned” and “approved on appeal” describe the same outcome. The opposite outcome is “upheld,” which means the payer reviewed the appeal and confirmed its original decision to deny.

What happens after an overturned denial?

The payer reprocesses the claim and issues payment, typically reflected on a corrected ERA or EOB. Providers should reconcile the payment against the original claim to confirm the full billed amount, or the contracted rate, was honored, since a partial overturn is still possible.

Can an insurance denial be overturned?

Frequently, yes, though the odds vary sharply by payer type and denial reason. A June 2026 report from the HHS Office of Inspector General found that when Medicare Advantage enrollees appealed denials for skilled nursing facility admission, plans overturned 95 percent of them. The same report found lower, but still substantial, overturn rates for other post-acute care categories: 43 percent for inpatient rehabilitation facility denials and 36 percent for long-term acute care hospital denials. A separate 2018 OIG investigation found that Medicare Advantage organizations overturned 75 percent of their own denials once beneficiaries or providers appealed, yet fewer than 1 percent of denials were ever appealed in the first place.

That gap between how often denials are appealed and how often appeals succeed shows up outside Medicare Advantage too. Zedtreeo’s 2026 denial management analysis, citing figures from Medical Billers and Coders and Qualigenix published in June 2026, put first-level appeal success rates at 40 to 60 percent for eligibility, coding and prior authorization denials, rising to 70 percent or higher for well-prepared appeals handled by specialists. Timely filing and medical necessity denials tend to have lower recovery rates, since there is often no procedural error to correct, only a clinical or administrative judgment to contest.

Difference between upheld and overturned

An upheld denial means the appeal failed. The payer’s original decision stands and the provider or patient has to decide whether to pursue the next level of appeal or write off the balance. An overturned denial means the appeal succeeded and payment follows.

When is a claim reconsidered after an appeal?

Reconsideration is usually the second level of a payer’s internal appeal process, following an initial redetermination. For Medicare Part A and B claims, providers have 120 days from the initial denial to request a redetermination and if that is unfavorable, a further 180 days to request reconsideration by a Qualified Independent Contractor, per CMS regulations.

How the appeal process typically works

Appeal structures differ by payer, but most follow a version of the same tiered process.

For traditional Medicare, there are five levels: redetermination by the Medicare Administrative Contractor, reconsideration by a Qualified Independent Contractor, a hearing before an Administrative Law Judge, review by the Medicare Appeals Council and finally judicial review in federal district court. Most claims that get overturned are resolved at the first or second level; reaching an Administrative Law Judge hearing is comparatively rare and reserved for higher-dollar or more contested cases.

Medicare Advantage plans and commercial payers generally use a similar structure: an internal first-level appeal handled by the plan itself, followed by an external review conducted by an independent reviewer if the internal appeal is denied. Documentation is what moves a case from upheld to overturned. Appeals that succeed tend to include the specific clinical notes, authorization records, or corrected coding that address the exact reason cited on the original denial letter, rather than a general request for reconsideration.

What current denial data shows

Denial rates have been climbing rather than stabilizing. Kodiak Solutions, in its March 2026 State of the Healthcare Revenue Cycle report published with HFMA, recorded a confirmed initial denial rate of 11.8 percent for 2024, up from roughly 10.2 percent in prior years. A Medical Group Management Association survey reported by Fierce Healthcare found 41 percent of providers now report denial rates above 10 percent, compared with an HFMA benchmark of 5 to 10 percent for a well-managed practice.

The financial exposure is not evenly distributed. Kodiak’s data shows commercial payers denying inpatient claims at more than four times the rate of traditional Medicare, 21 percent versus roughly 5 percent, while Medicaid inpatient denials reached 44 percent on first submission. Net revenue leakage tied to denials grew from an estimated 38.6 billion dollars in 2024 to 48.4 billion dollars in 2025 across the hospitals Kodiak tracked, a 25 percent increase that outpaced the growth in denial volume itself, suggesting that resolving denials has become more resource-intensive even where the raw denial rate held steady.

Reducing denials over time

The categories above are largely preventable and the fix rarely requires new technology so much as consistent process discipline.

• Verify eligibility and benefits at scheduling and again at check-in, not once at intake and never again.
• Confirm prior authorization numbers match the exact CPT code, place of service and date that will be billed, since a technically valid authorization for the wrong code still generates a denial.
• Review ICD-10-CM updates on a quarterly basis so diagnosis coding does not fall out of step with payer medical necessity policies.
• Track each payer’s specific timely filing deadline rather than applying one internal rule across every contract.
• Run a monthly denial report broken out by CARC code and payer, since a recurring code usually points to one fixable process gap rather than a string of unrelated errors.
• Prioritize appeals with strong documentation and file them promptly. Zedtreeo’s 2026 analysis found that appeals filed within 14 days of the denial date consistently outperformed later submissions.
• Practices juggling several payer contracts and specialty-specific coding rules often find that a dedicated denial specialist, whether in-house or outsourced, pays for itself through reduced rework alone, before counting the revenue recovered through appeals.

Denials are not a fixed cost of doing business. They are a measurable, trackable pattern and the data shows that most of them come down to the same handful of preventable errors, repeated across thousands of claims.