Quick Guide- The Guide to Medicaid/Medicare/VA Denials

Posted on December 21, 2021 by Kylene Ordway

Claim denials are a common issue that not only complicates your revenue cycle but also negatively impacts the patient experience, which can have lasting repercussions on your medical practice. If your practice serves Medicaid, Medicare, and VA patients, you may need to be prepared for strict rules and regulations.

Every year, Medicaid/Medicare denies, loses, or ignores approximately 30% of claims. That’s $262 billion in medical claims. The VA denies or rejects over $716 million in claims annually, putting about 60,800 veterans at financial risk.

Jill Griffith, Senior Manager at Dixon Hughes Goodman, LLP, feels strongly about advocating for patients. She says if you have proper documentation supporting medical necessity, don’t give up. “Some things are worth fighting and some things require an internal processing change.”

Knowing the difference and acting on those processes can make a huge impact in your payment responses.

So what can you do to reduce the number of denials and rejections that come back to your office? Let’s explore some of the common reasons for denials, how to make corrections and appeals, and avoid common issues.

Common reasons for claim denial

In most cases, denials and rejections come down to coding errors and a handful of other prevalent issues. Some of the most common problems that lead to claim denials include:

Not specific enough

The code needs to be entered at the highest level for the diagnosis. Whether your office uses ICD-9, ICD-10, or both, a certain number of digits are required to represent the complete diagnosis. Without the full and accurate code, Medicaid, Medicare, the VA, and other insurance carriers will reject the claim.

Claim is missing information

Another common error is missing information. Dates — whether medical emergency, onset, or accident — are often left off. Reviewing a claim to ensure all fields are complete and the necessary documents attached can help avoid this issue.

The claim isn’t filed in a timely manner

The Affordable Care Act reduced the claims submission time to 12 months, down from the 15-27 months previously required by Medicare. While it’s in your best interest to submit claims rapidly, sometimes bottlenecks occur, and paperwork piles up.

Incorrect patient identifier information

Another prevalent error is incorrect patient information, including the spelling of their name, date of birth, and sex. Other common identifier mistakes include the patient’s relationship to the insured person, whether a group number is required, and that the diagnosis code matches the procedure performed.

Incorrect code

Incorrect codes are used for all kinds of reasons. Your coder may be using outdated coding books, or there could be human error. While we’d all like to be perfect, typos happen. Additionally, it’s critical that you bill what you document. If there isn’t documentation to support a claim, Medicaid, Medicare, the VA, and other insurance carriers act as though the provider never performed the service.

Duplicate billing

Duplicate billing is another standard error. This issue often occurs when a claim is resubmitted but not removed from the patient’s account. Claims processing systems have automation in place to screen for duplicate claims. While some claims may only appear to be duplicated, identical claims include the same:

  • HIC number
  • Provider number
  • From date of service
  • Through date of service
  • Type of service
  • Procedure code
  • Place of service
  • Billed amount

Upcoding or unbundling

First things first here: upcoding, or using CPT codes to file a claim for a higher-paying service than what was performed, is fraudulent. On the same note, unbundling or charging for a series of tests or procedures separately because their sum is greater than the bundled test is also illegal. Not only will these actions result in claim denials, but they could lead to more serious legal action.

Further information needed to prove medical necessity

This is another issue that ventures into potential fraud. According to section 1862(a)(1)(A) of the Social Security Act, Medicare will not cover services that “are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.” If a patient doesn’t need a procedure, don’t perform it and don’t bill for it.

Referral or prior authorization required

A referral and/or prior authorization are needed for a claim to be approved and paid in some situations. To review the difference, a primary care provider can give a patient a referral for a specialist. And some insurance companies issue prior authorizations for necessary tests. A prior authorization doesn’t guarantee payments, but you still need to get it if the insurance carrier requires it.

Services not covered or coverage terminated

Health insurance is nothing if not variable. It can change at any time. Your team must verify eligibility every time a service is provided to a patient. They need to confirm that the patient’s coverage is still in place if the maximum benefit has been met and that their plan covers the specific service or procedure.

The specific issues that result in claim denials vary from state to state, but in general, some of the most prevalent particular reasons for claim rejections include:


Common Medicaid/Medicare and VA denial reasons.


  • Physician Administered Drug (PAD) Detail Denied by Pharmacy Benefits Manager (PBM)
  • No Payable Accommodation Code
  • No Crossover Coinsurance or Deductible Due
  • Procedure Missing on Outpatient Claim
  • No Billing Rule for Procedure
  • Contract could not be determined
  • No Reimbursement Rule for Revenue Code
  • Service Not Covered by Medicaid
  • Client ineligible on detail level date of service
  • Prior authorization not found


  • Missing, incomplete, or invalid insured ID
  • Missing insurance plan name or program name
  • Missing/invalid Admission date for place of service
  • Invalid Service Faculty Address
  • Missing NDC Units
  • Claim contains one or more missing, incomplete, invalid, or inappropriate place of service codes
  • Invalid Rendering NPI
  • Claim contains ICD9 Principle Dx Code
  • Invalid service line provider taxonomy code
  • Invalid/incomplete CPT/HCPCS codes

How to avoid common denials

There are also plenty of reasons for the VA to reject claims from veteran dependents, ranging from lack of coverage to uncertainty on the relationship between the patient and the insured.

We’ve covered a few of the steps you can take to reduce claim denials in the review of everyday issues. It’s not just down to your coders and billing team. The first step begins in the front office, where your team should confirm and verify each patients identifying information and insurance coverage, including referrals, authorizations, and medical necessity, at every visit.

Of course, your coders need to double-check their work to ensure they use the complete and accurate codes for the diagnosis and services provided. Remember, the COVID-19 pandemic made telehealth and telephone visits essential, and new codes were introduced for virtual health and the additional costs associated with safety measures like PPE. There’s no way to predict when insurance companies will be willing to pay them, so hold onto your rejected claims and periodically try to resubmit them.

Another note for resubmission, make sure to introduce a rigorous review process for all rejected claims. Once you identify the error, you can fix it and resubmit if appropriate. You may also notice common errors or trends that can help you coach your team to improve performance.

Your team may also find it helpful to study Medicaid, Medicare, and VA coverage, including rules and regulations. Ms. Griffith looks for telehealth expansion and efforts to solidify most of the regulatory changes seen since March 2020. This landscape changes often, and she is on the CMS email alert list and subscribes to Becker’s and HFMA to receive timely regulation updates. 

When your team knows what’s required and has fostered some relationships within those organizations, they may be able to reduce rejections, expedite payment, and resolve issues rapidly.

Can transparency and automation help?

Jill Griffith stresses the importance of transparency. Design billing statements that are easy for the patient to understand and have a well-trained customer service department.

You could also consider automating your revenue cycle to lower the risk of human error. Obviously, you need to carefully choose a revenue cycle management platform that meets your needs, ensure that your team has adequate training and that the data entry is clean. After all, the system is only as good as the data that’s in it. Your EHR or practice management system may already have safeguards in place to alert your team to missing information and other errors.

Get help

You could also find a partner to streamline your revenue cycle process. This is where KeyBridge Medical Revenue Care™ can help. KeyBridge Medical Revenue Care offers much more than a healthcare revenue management plan and professional, patient-focused collections services. KeyBridge Medical Revenue Care is your partner, working with you to enhance the patient financial experience and in return, get you better financial results.

KeyBridge Medical Revenue Care offers innovative processes to automate time-stealing tasks, which can help reduce errors as well as free up your employees to spend more time on more meaningful tasks. They also partner with you to address any existing backlog of claims or rejections and identify and address bottlenecks in your current procedures. Ultimately, working with KeyBridge Medical Revenue Care leads to increased balance recovery, which benefits you and your patients.

But wait, there’s more.

KeyBridge Medical Revenue Care focuses on fostering healthcare cultures within itself and its partners. Their approach improves the culture of your office from the inside out. Satisfied patients usually show up for their appointments, pay their copays and deductibles, and perhaps most importantly, recommend your practice to their friends and family. Essentially, improving employee engagement not only improves performance, but their enthusiasm spills over to the patients, enhancing their overall experience, too.

Ready to Get Started?

Learn how we can help your team solve their challenges.

Start the Transformation

Ready to Start the Transformation?

Getting started begins with a simple conversation. Just leave a little bit of information, and one of our client representatives will be in touch to set up a time.

  • This field is for validation purposes and should be left unchanged.