Denial Code 108 means that the rent/purchase guidelines were not met for a claim. This denial code indicates that the insurance company will not make payment for the service because the guidelines for renting or purchasing the equipment or supplies were not followed. In this article, we will explore the description of denial code 108, common reasons for its occurrence, next steps to resolve the denial, how to avoid it in the future, and provide examples of denial code 108 cases.
2. Description
Denial Code 108 is a claim adjustment reason code (CARC) that specifically refers to the failure to meet the rent/purchase guidelines for a claim. This code is used when the insurance company determines that the equipment or supplies being billed for were not rented or purchased in accordance with their guidelines. As a result, the claim is denied, and the insurance company will not provide payment for the service.
2. Common Reasons
The most common reasons for denial code 108 are:
- Non-compliance with Guidelines: Denial code 108 often occurs when the provider fails to adhere to the specific guidelines set by the insurance company for renting or purchasing equipment or supplies. This could include not obtaining prior authorization, not using an approved vendor, or not following the prescribed rental or purchase duration.
- Missing Documentation: Another common reason for denial code 108 is the absence of necessary documentation to support the rental or purchase of the equipment or supplies. This could include missing invoices, rental agreements, or proof of medical necessity.
- Incorrect Coding: Denial code 108 may also be triggered by coding errors, such as using incorrect procedure codes or modifiers that do not align with the guidelines for renting or purchasing the equipment or supplies.
- Lack of Medical Necessity: If the insurance company determines that the rented or purchased equipment or supplies were not medically necessary for the patient’s condition, they may deny the claim under code 108.
3. Next Steps
To resolve denial code 108, follow these next steps:
- Review Guidelines: Carefully review the insurance company’s guidelines for renting or purchasing the specific equipment or supplies. Ensure that all requirements, such as prior authorization, approved vendors, and rental or purchase duration, are met.
- Gather Documentation: Collect all necessary documentation to support the rental or purchase of the equipment or supplies. This may include invoices, rental agreements, proof of medical necessity, and any other documents required by the insurance company.
- Appeal the Denial: If you believe the denial was made in error or have additional information to support the claim, submit an appeal to the insurance company. Include the relevant documentation and a detailed explanation of why the denial should be overturned.
- Communicate with the Patient: Keep the patient informed about the denial and the steps being taken to resolve it. Discuss any potential out-of-pocket costs they may incur if the denial is not overturned.
- Follow Up: Monitor the progress of the appeal and follow up with the insurance company to ensure that it is being processed in a timely manner. Provide any additional information or documentation requested by the insurance company.
4. How To Avoid It
To avoid denial code 108 in the future, consider the following:
- Understand Guidelines: Familiarize yourself with the insurance company’s guidelines for renting or purchasing equipment or supplies. Ensure that you are aware of any specific requirements, such as prior authorization or approved vendors.
- Obtain Prior Authorization: Always obtain prior authorization from the insurance company before renting or purchasing equipment or supplies. This will help ensure that the claim is not denied due to non-compliance with the guidelines.
- Document Medical Necessity: Clearly document the medical necessity for the rented or purchased equipment or supplies. Include detailed notes in the patient’s medical record and provide any supporting documentation required by the insurance company.
- Accurate Coding: Ensure that the procedure codes and modifiers used on the claim accurately reflect the rented or purchased equipment or supplies and align with the insurance company’s guidelines.
- Regularly Review Guidelines: Stay updated on any changes to the insurance company’s guidelines for renting or purchasing equipment or supplies. Regularly review the guidelines to ensure compliance and avoid denials.
5. Example Cases
Here are two examples of denial code 108:
- Example 1: A provider submits a claim for the rental of a wheelchair without obtaining prior authorization from the insurance company. The claim is denied under code 108 because it does not comply with the guidelines for renting durable medical equipment.
- Example 2: A provider bills for the purchase of a specialized medical device, but fails to include the necessary documentation to support the medical necessity of the device. The claim is denied under code 108 due to the lack of supporting documentation.
