Clearinghouse Rejection Codes Explained

The clearinghouse assists providers in understanding the common mistakes that cause claim denials. When a clearinghouse detects issues in the claims and returns them for correction, they are called clearinghouse rejection codes. The continuous claim rejection adversely affects the revenue cycle management. Therefore, it is crucial to submit clean claims to receive timely payments for the services rendered. Let’s discuss the common claim rejection issues the clearinghouse detects.

What are Clearinghouse Rejection Codes?

The clearinghouse rejects claims due to missing details, duplicate claim submissions, patient/ provider information errors, coding issues, and inaccurate documentation. A clearing house rejection is not a complete denial of the claim. Instead, it is returned for correction, but reimbursement delays occur due to this issue.
The rejected claims from the clearing house are called clearing house rejection codes. Likewise, it is not a direct denial from the payer. When the provider submits a claim to the clearinghouse, it scrutinizes the claim for mistakes. The inaccurate claim is sent back to the provider, while an accurate one is submitted to the payer for reimbursement.

Why are Clearinghouse Rejection Codes Important?

Clearinghouse rejection codes enable providers to understand claim mistakes before the payer rejects them. The timely and swift identification of errors is crucial to receiving early payments from payers. In addition, it enhances accuracy and reduces administrative tasks for billing staff. It stops the hassle of going through all the steps after payer rejection. Similarly, it helps providers learn about claim errors at the earliest.

Clearinghouse Rejection vs Payer Denial

Clearing house rejection occurs at a third-party clearinghouse level. This is where claims are scrubbed for errors before sending to insurance payers. The providers send claims to the clearinghouse for revision. On the other hand, payer denials means the payer refuses to pay the claim payment after reviewing it. Therefore, it is crucial to submit clean claims to the payers for timely reimbursements.

What are the Common Clearinghouse Rejection Codes?

One of the most common reasons for claim rejection is missing or invalid information.

Invalid Patient/Provider Information

Invalid or missing patient and provider information leads to claim rejection. For example, the patient’s information is correct, but the provider’s information is incorrect. Similarly, the patient’s information is missing, but the provider’s information is correct. In both cases, the clearing house rejects the claims.

Incorrect Rendering Provider

Clearinghouse rejection codes also occur due to incorrect information on the rendering provider. A rendering provider is the provider who gives medical treatment to the patient. Therefore, it is necessary to provide accurate information about the rendering provider.

Missing Postal Zip

Due to this error, the claim has not been routed to an accurate place for processing. Therefore, cross-check the postal ZIP information before submitting the claim to the clearinghouse.

Duplication or Invalidity of Diagnosis/Procedure Code

One of the most crucial components of the claim is the diagnosis and procedure codes. Any duplication or invalidity of diagnostics or procedure codes leads to clearinghouse claim rejection. Mention the accurate code for the precise service rendered to receive payments.

Wrong Date/Place of Service

The wrong date and place of service can cause claim issues. For example, the actual service is given in the emergency room and incorrectly mentioned in the operation room in the claim. This confusion raises questions about the claim’s authenticity. Therefore, accurately mention the date and place of service in the claim.

Overused or Missing Modifier

Sometimes, overuse of modifiers is the reason behind claim rejections. In the same way, the essential modifiers are missing in some claims. The clearinghouse rejects the claim and returns it for correction. It allows the provider to review claims without facing denials.

Non-Billable Codes

When bundling codes, you receive a clearing house rejection code, and the payer’s policy does not cover the services. For example, a provider sends a claim for a specific diagnosis code. The insurance company doesn’t allow its payment because it is considered part of the procedure.

Payer ID Inaccuracy

Incorrect Payer Address means the payer ID does not match with the already mentioned insurance companies. Likewise, the outdated payer ID doesn’t clearly define the payer address for the claim submission. Verifying the payer ID before submitting the claim and maintaining accuracy is crucial.

Final Thoughts

Clearinghouse helps providers submit clean claims to payers by detecting common mistakes at the earliest. Likewise, it rejects claims with invalid provider/payer information, code duplication, overuse of modifiers, and inaccurate date/place of service. Similarly, clearinghouse rejection codes notify the provider to write an accurate payer ID without using non-billable codes. Hence, maintaining claim accuracy is necessary to receive timely payments from payers.

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Frequently Asked Questions

Is there a need to resubmit the rejected claim with a resubmission code?

A clearinghouse is an in-house system that only cross-checks the claims information. There’s no need to submit a rejected claim from the clearinghouse with a new code.

How to prevent clearinghouse rejection?

Train and educate billing and coding staff to submit claims with accurate information. Provide them with coding and billing education and tell them about the importance of submitting accurate information.

How do rejected claims affect the overall revenue?

When the payer denies a claim due to errors, the resubmission costs administrative expenses, affecting the overall revenue cycle.