Denial code 246 is a critical roadblock in healthcare revenue cycles, indicating that a claim has been halted before adjudication and returned unpaid. This non-payable code often disrupts cash flow, and understanding its causes and solutions is essential for healthcare providers, practice managers, and clinic owners.
Common Reasons for Denial Code 246
- Incorrect Code Assignment: One of the primary reasons for denial is the incorrect assignment of non-payable codes to services or procedures that should qualify for reimbursement. Simple coding errors can lead to significant financial losses.
- Lack of Medical Necessity: When a service or procedure doesn’t meet the insurer’s criteria for medical necessity, the claim may be automatically denied. This often results from incomplete or inadequate documentation.
- Insufficient Documentation: Incomplete or missing medical records can lead to a denial under code 246. Properly supporting medical necessity requires accurate and detailed documentation.
- Policy Exclusions: Some procedures or services may be excluded from coverage by the payer’s policy, leading to automatic denial. This can happen if the billing team isn’t aware of the insurer’s coverage limitations.
Strategies to Prevent and Resolve Denial Code 246
- Thorough Claim Review: Regularly reviewing Explanation of Benefits (EOBs) and Electronic Remittance Advice (ERAs) is crucial to catching and addressing denials quickly. Cross-reference the denials with the original claims to identify discrepancies.
- Accurate Coding: Using correct CPT, ICD-10, and HCPCS codes is essential. Investing in staff training or automated coding tools can significantly reduce human error.
- Establish Medical Necessity: Make sure that the medical necessity of each service or procedure is clearly documented. Include a detailed rationale, patient symptoms, and diagnosis to strengthen your case.
- Maintain Complete Documentation: Keep detailed medical records that include progress notes, test results, and consultation reports. Strong documentation can prevent denials due to insufficient proof.
- Understand Policy Exclusions: Stay up-to-date with each payer’s policy exclusions to avoid submitting claims for non-covered services. This knowledge helps streamline the claim submission process and minimizes the chances of denial.
- Prompt Resubmission: If a claim is denied due to code 246, make the necessary adjustments and resubmit promptly to avoid delays in reimbursement.
Optimizing Your Revenue Cycle with Claims MedReducing denial code 246 occurrences requires proactive claim management and a keen understanding of billing practices. At Claims Med, we specialize in helping healthcare providers and clinics streamline their revenue cycles through precise claim scrubbing, efficient appeals management, and personalized billing strategies.
Our team of experts is ready to support your practice in improving its financial health by minimizing claim denials and maximizing reimbursements. Don’t let denial code 246 disrupt your revenue—partner with Claims Med today!