Why claims get denied, and how they get won back

A clinic sees a patient, sends the claim to the insurer, and waits. Weeks later the answer comes back: denied. Somewhere in a hospital or a revenue office, a claims specialist now has a stack of these, each with a code, an amount and a deadline.

This work is invisible to most people and essential to every provider. A denial that is never worked is revenue the clinic simply never receives.

KFF's analysis also found that consumers rarely appeal, and that public data often does not say why a claim was denied. On the provider side, the specialist's job is to find out.

Step 1: read the remittance, line by line

When an insurer (the payer) answers a claim, it sends a remittance advice. Each line carries a Claim Adjustment Reason Code (CARC), a standard code maintained by X12, plus a group code that says who is responsible for the difference. The code is the starting point, not the conclusion.

Medical claims desk

Read the code before you ask anyone, or any tool, what it means. The full list is public: X12 Claim Adjustment Reason Codes.

Step 2: find the real cause, not the label

A code says what the payer decided. It does not always say what went wrong upstream. Common real causes include:

• Eligibility: the patient's coverage had ended, or the claim went to the wrong plan
• Prior authorization: a service needed approval that was never obtained
• Coding: a diagnosis that does not support the procedure, or a missing modifier
• Duplicates: the same claim sent twice, often after a resubmission
• Timely filing: the claim reached the payer after its filing limit

Step 3: choose the best path the first time

Not every denial should be appealed. Some are fixed with a corrected claim. Some need a formal appeal with records. Some, honestly, are a loss to accept, and accepting it promptly is better than burning time on an appeal that cannot win.

1. Correct and resubmit: a fixable error in the claim itself
2. Appeal: the payer got it wrong, and you can show it
3. Accept the loss: the denial is right, so close it cleanly

Step 4: keep every deadline alive

Payers set limits for corrected claims and appeals. Miss one and a winnable denial becomes a permanent write-off. Good specialists work their list by value and urgency, put anything close to its deadline first, and never leave a claim open without a next-action date.

For Medicare, the appeal levels and their time limits are published by CMS: Original Medicare appeals.

Step 5: write an appeal that wins

An appeal is an argument. It names the claim, the date of service and the denial by its code. It cites the payer's own policy by document, section and version. And it sends only the records that prove the point, not the whole chart.

A denial is a question from the payer. The appeal is your answer, with the evidence attached.

Getting into medical claims

Claims and denial specialists come from front-desk, medical billing, coding and customer service roles. Employers look for careful reading, comfort with codes and deadlines, and clear written appeals. To build those:

• Read how the work is judged in our Medical claims guide.
• Work a book of denied claims on the Medical claims desk, graded claim by claim and saved to your Shift Record.

Sources and further reading

• KFF, HealthCare.gov insurers denied nearly 1 in 5 in-network claims in 2023.
• X12, Claim Adjustment Reason Codes.
• CMS, Original Medicare (fee-for-service) appeals.
• Zeloric, Medical claims guide and desk.