How To Fix Denial Code 112 | Common Reasons, Next Steps & How To Avoid It

Denial Code 112 means that a claim has been denied because the service was not furnished directly to the patient and/or not documented. Below you can find the description, common reasons for denial code 112, next steps, how to avoid it, and examples.

2. Description

Denial Code 112 is a Claim Adjustment Reason Code (CARC) and is described as ‘Service not furnished directly to the patient and/or not documented’. This code indicates that the insurance company will not make the payment for the billed service because either the service was not provided directly to the patient or there is a lack of proper documentation to support the service.

2. Common Reasons

The most common reasons for denial code 112 are:

1. Third-Party Service: Denial code 112 may occur when the service billed was provided by a third-party provider who is not directly affiliated with the patient’s healthcare provider. Insurance companies often require services to be furnished directly by the provider listed on the claim, and any services provided by a third-party may be denied.
2. Lack of Documentation: Another common reason for denial code 112 is the absence or insufficiency of documentation to support the billed service. Insurance companies require proper documentation, such as medical records or progress notes, to verify the necessity and appropriateness of the service. Without adequate documentation, the claim may be denied.
3. Missing Signature: If the service requires a signature from the patient or the provider, the absence of a signature can lead to denial code 112. Insurance companies often require signatures as proof of receipt or authorization for the service rendered.
4. Incorrect Coding: Denial code 112 may also occur if there is a coding error on the claim. Incorrect coding can result in the service being categorized incorrectly or not matching the documentation, leading to a denial.
5. Non-Covered Service: In some cases, denial code 112 may be triggered if the service is not covered under the patient’s insurance plan. Insurance companies have specific guidelines and coverage limitations, and if the service falls outside of those parameters, it may be denied.

3. Next Steps

You can fix denial code 112 as follows:

1. Review Documentation: Start by reviewing the documentation related to the denied claim. Ensure that all necessary documentation is present and accurately reflects the service provided. If any documentation is missing or incomplete, obtain the required information and update the claim accordingly.
2. Verify Direct Furnishing: If the denial is due to the service not being furnished directly to the patient, confirm that the service was indeed provided by the healthcare provider listed on the claim. If the service was provided by a third-party, consider resubmitting the claim with the appropriate documentation to support the necessity of the third-party involvement.
3. Correct Coding Errors: If the denial is a result of coding errors, review the claim to identify any coding mistakes. Make the necessary corrections and resubmit the claim with the accurate coding information.
4. Obtain Missing Signatures: If the denial is due to a missing signature, ensure that all required signatures are obtained. This may involve reaching out to the patient or the provider to obtain the necessary signatures and then resubmitting the claim with the updated documentation.
5. Appeal the Denial: If you believe the denial was incorrect or unjustified, you have the option to appeal the decision. Gather any additional supporting documentation or evidence that can help strengthen your case and submit an appeal to the insurance company. Follow their specific appeals process and provide a clear explanation of why you believe the denial should be overturned.

4. How To Avoid It

You can prevent denial code 112 in the future by following these steps:

1. Ensure Direct Furnishing: Make sure that all services billed are directly furnished by the healthcare provider listed on the claim. If third-party involvement is necessary, ensure that proper documentation is obtained to support the need for their services.
2. Thorough Documentation: Maintain thorough and accurate documentation for all services provided. This includes medical records, progress notes, and any other relevant documentation that supports the necessity and appropriateness of the service.
3. Obtain Signatures: Ensure that all required signatures are obtained for services that require them. This may involve implementing processes to ensure that signatures are consistently obtained and documented.
4. Accurate Coding: Double-check the coding on all claims to ensure accuracy. Regularly train and educate coding staff to stay updated on coding guidelines and best practices.
5. Verify Coverage: Before providing a service, verify the patient’s insurance coverage and ensure that the service is covered under their plan. This can help prevent denials for non-covered services.

5. Example Cases

Below are two examples of denial code 112:

• Example 1: A patient receives physical therapy services from a third-party provider who is not directly affiliated with their primary healthcare provider. The claim is denied under code 112 because the service was not furnished directly to the patient by the listed provider.
• Example 2: A claim for a surgical procedure is denied under code 112 due to a lack of documentation supporting the medical necessity of the procedure. The provider failed to include the required medical records and progress notes to justify the service.

Source: Claim Adjustment Reason Codes