Difference between Claim Rejections and denials

Insurance claim denials and rejections are one of the biggest obstacles affecting healthcare reimbursements.

A claim rejection occurs prior to claim processing and is typically related to input errors or invalid data. A denied claim is processed by the payer and determined to be unpayable. In both instances, the payer will return a notification for the reason of rejection or denial.

Rejected Claims:

  • A rejected claim contains one or more errors found before the claim was processed.
  • A rejected claim may be the result of a clerical error or a mismatched procedure and ICD code(s).
  • Rejections (when the claim was submitted electronically) usually come back as an EDI Rejection (electronic claim error) and will not show up on an Explanation of Benefits or Electronic Remittance Advice that you receive from the insurance company.

Denied Claims:

  • Denials normally come back on an Explanation of Benefits or Electronic Remittance Advice (ERA). 
  • Payers will include an explanation for why a claim is denied when they send the denied claim back to the biller.
  • Most denied claims can be appealed and sent back to the payer for processing. This process can be time-consuming and costly, so it’s important to get as many “clean” claims the first time you submit a claim. 
  • If a denied claim is resubmitted without an appeal or reconsideration request it will most likely be considered a duplicate and denied, and the claim will remain unpaid, costing your practice even more time and money.