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Denials for medical necessity are among the most common, and among the most preventable. The remittance advice (the 835, or the paper RA) tells you what went wrong, if you know how to read it.
Part 1 of 4
Reading the denial codes
A denial line has a group code (who is responsible), a claim adjustment reason code (CARC, why) and often a remittance advice remark code (RARC, more detail).
| Code | Type | Meaning |
|---|---|---|
| CO | Group | Contractual obligation: the provider is responsible and cannot bill the patient |
| PR | Group | Patient responsibility: the patient can be billed (for example when a valid ABN and GA exist) |
| 50 | CARC | Non-covered service because the payer does not consider it a medical necessity |
| 11 | CARC | The diagnosis is inconsistent with the procedure |
| 151 | CARC | The information submitted does not support this many or this frequency of services |
| N115 | RARC | The decision was based on a Local Coverage Determination (LCD) |
| N386 | RARC | The decision was based on a National Coverage Determination (NCD) |
So CO-50 with N115 reads: "Not medically necessary under the LCD, and you, the provider, absorb it." PR-50 usually means a valid ABN with GA was on file, so the patient gets the bill.
Done: Reading denial codes
Part 2 of 4
Find the cause
Pull the claim, the note and the coverage policy side by side, and work through these questions:
- Was the right diagnosis coded? Often the record supports a covered diagnosis that was not coded, or was coded vaguely.
- Was it linked to the right line? Check the box 24E pointers (linking diagnoses).
- Is the diagnosis on the coverage list? Check the NCD or the LCD's billing and coding article for that date of service (NCDs and LCDs).
- Was a frequency limit passed? Look at when the service was last paid.
- Was an ABN needed, and was it valid? Check the form version, reason, signature date and modifier (ABN and modifiers).
- Does the documentation actually show the need? If not, no code change can fix it.
Done: Find the cause
Part 3 of 4
Correct it, or appeal it?
| The problem | What to do (Medicare) |
|---|---|
| A clerical error: wrong or missing diagnosis, wrong pointer, missing modifier, typo | Ask for a reopening (generally within 1 year of the initial determination). Many MACs allow this by phone or portal. |
| The coding was right, and the record shows the service was necessary | File a redetermination (first-level appeal) within 120 days of receiving the initial determination, with the notes, results and a short letter. |
| The redetermination is upheld and you still disagree | Ask for reconsideration by a Qualified Independent Contractor (QIC) within 180 days. |
| The record does not support the service, and no ABN was given | Accept the denial. Do not bill the patient. Use it to fix the process. |
Commercial and Medicare Advantage payers have their own steps and deadlines (often shorter). Check the payer's provider manual.
A strong appeal
- The claim and denial details (claim number, date of service, codes).
- The signed progress note and any test results, orders or earlier results that show the need.
- The coverage policy section the service meets, quoted with its version.
- A short letter: what was done, why it was needed for this patient, and where the record shows it.
Denied HbA1c, CO-50 with N386
An HbA1c (83036) is denied CO-50 / N386. The claim had only Z00.00 (general adult exam), because the lab was drawn at a wellness visit. The note clearly documents type 2 diabetes with hyperglycemia and a medication change.
The diagnosis was simply not coded on the lab line. Request a reopening to add E11.65 and point the lab line to it. No appeal is needed because the record already supports it.
Done: Correct or appeal
Part 4 of 4
Prevention checklist
- Check coverage before the service for tests and procedures with known NCDs or LCDs, ideally at the point of ordering.
- Code from the record to the highest specificity, and query when it is unclear.
- Link each line to the diagnosis that explains it.
- Track frequency for screening and repeat services.
- Give a valid ABN when there is a specific reason to expect a denial, and report GA or GZ correctly.
- Review denials monthly by CARC and RARC. A pattern (one test, one provider, one diagnosis) points to a process fix.
Check yourself
Done: Prevention and check