Healthcare providers, practice managers, and practice owners must actively combat Denial Code 24 Capitation Agreement. This common denial arises when providers submit claims to Original Medicare for services that should be billed to a Medicare Advantage (MA) plan. Consequently, the claim is rejected because a capitation agreement/managed care plan already covers the charges. Therefore, understanding MA plan coverage is crucial for preventing Denial Code 24 Capitation Agreement and ensuring prompt payment.
Understanding Capitation Agreements and Denial Code 24
A capitation agreement is a contract where a healthcare provider receives a fixed fee per patient per month from a Managed Care Organization (MCO), regardless of services rendered. Medicare Advantage plans—administered by private insurance companies—utilize this model.
MA plans replace Original Medicare for most services. Consequently, when a provider bills Original Medicare for a patient with an MA plan, Original Medicare rejects the claim, citing Denial Code 24 Capitation Agreement.
| Common Trigger | Explanation | Mitigation Focus |
| Incorrect Claim Submission | The most common reason is when staff submit claims to Original Medicare instead of the Medicare Advantage plan. | Always verify a patient’s insurance coverage at every visit. |
| Plan Discrepancies | The insurance plan on file does not match the patient’s actual, current coverage. Thus, the wrong payer receives the claim. | Regularly update Coordination of Benefits (COB) information. |
| Prior Authorization Issues | The managed care plan requires prior authorization for certain services. Failure to obtain this results in denial. | Obtain prior authorization when required for MA plan services. |
| Insufficient Documentation | Lack of adequate documentation to support the medical necessity of the charges. The payer cannot approve the claim without support. | Maintain comprehensive and accurate documentation to support all claims. |
In essence, the Denial Code 24 Capitation Agreement demands that the provider accurately identify the correct, private payer responsible for the service.
6 Best Practices to Avoid Denial Code 24 Capitation Agreement
A highly effective prevention strategy relies on rigorous front-end verification and attention to payer details.
1. Rigorously Verify Insurance Coverage
Always verify a patient’s insurance coverage before providing services. Determine if the patient has Original Medicare or a Medicare Advantage plan. This must be the first step in the revenue cycle.
2. Update Coordination of Benefits (COB)
Ensure that coordination of benefits (COB) information is accurate and up-to-date. Current COB data prevents double billing and ensures the claim goes to the correct primary payer immediately.
3. Obtain Necessary Prior Authorization
Obtain prior authorization for services when required by the patient’s Medicare Advantage plan. Authorization proves medical necessity and compliance with the plan’s utilization rules.
4. Implement Accurate Coding Guidelines
Use correct coding guidelines to ensure accurate billing. Although this is not the primary cause of the N24 denial, accurate coding prevents subsequent rejections once the claim reaches the correct MA plan.
5. Maintain Complete Documentation
Staff must maintain comprehensive and accurate documentation to support all claims. Strong documentation is essential for both initial submission and the appeals process.
6. Promptly Appeal Denials
If Original Medicare denies a claim with Denial Code 24 Capitation Agreement, promptly review the reason. If the service was related to the limited exceptions (like hospice care), appeal the decision with the necessary supporting documentation. Otherwise, immediately submit the claim to the correct MA plan.
Stop Losing Revenue to Denial Code 24 Capitation Agreement
By understanding the nuances of capitation agreements and Medicare Advantage plans, healthcare providers significantly reduce their risk of denials due to code 24. Claims Med offers comprehensive revenue cycle management solutions. We help you streamline your billing processes, improve claim accuracy, and maximize your revenue.
Contact us today to learn more about how our RCM solutions can benefit your practice.
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