Denial Code 122 means that a claim has been denied due to a psychiatric reduction. Below you can find the description, common reasons for denial code 122, next steps, how to avoid it, and examples.
2. Description
Denial Code 122 is a Claim Adjustment Reason Code (CARC) that indicates a psychiatric reduction. This means that the insurance company has reduced or denied payment for a claim related to psychiatric services. The reduction may be due to various factors, such as limitations on coverage, specific policy exclusions, or discrepancies in the documentation provided.
2. Common Reasons
The most common reasons for denial code 122 are:
- Limited Coverage: Some insurance plans have limitations on psychiatric services, such as a maximum number of covered visits or specific requirements for pre-authorization. If the claim exceeds these limitations, it may be denied or reduced.
- Policy Exclusions: Certain insurance policies may exclude coverage for certain psychiatric treatments or procedures. If the claim falls under one of these exclusions, it will likely be denied.
- Documentation Insufficiency: Insurance companies often require specific documentation to support the medical necessity of psychiatric services. If the documentation provided is incomplete, insufficient, or does not meet the insurer’s criteria, the claim may be denied or reduced.
- Incorrect Coding: Errors in coding, such as using an incorrect procedure code or diagnosis code, can result in a denial or reduction of the claim. It is crucial to ensure accurate coding to avoid this type of denial.
- Non-Covered Services: Some psychiatric services may not be covered by certain insurance plans. If the claim is for a service that is not covered, it will likely be denied.
3. Next Steps
If you receive denial code 122, follow these next steps:
- Review the Denial Explanation: Carefully review the explanation provided by the insurance company for the denial. Understand the specific reason for the denial and any additional information or documentation required.
- Check Documentation: Evaluate the documentation submitted with the claim to ensure it meets the insurer’s requirements. If any information is missing or incomplete, gather the necessary documentation to support the medical necessity of the psychiatric services.
- Appeal the Denial: If you believe the denial was incorrect or unjustified, file an appeal with the insurance company. Provide any additional documentation or information that supports the medical necessity of the services rendered.
- Consult with the Provider: Seek guidance from the healthcare provider who rendered the psychiatric services. They may be able to provide additional information or documentation to support the appeal.
- Follow Up: Stay in communication with the insurance company throughout the appeal process. Keep track of all correspondence and document any phone calls or conversations regarding the denial.
4. How To Avoid It
To avoid denial code 122 in the future, consider the following:
- Verify Coverage: Before providing psychiatric services, verify the patient’s insurance coverage and ensure that the specific services are covered under their plan.
- Review Policy Exclusions: Familiarize yourself with the insurance policy’s exclusions related to psychiatric services. If a service is excluded, inform the patient in advance and discuss alternative options.
- Accurate Documentation: Ensure that all documentation meets the insurer’s requirements and clearly supports the medical necessity of the psychiatric services provided. Include thorough progress notes, treatment plans, and any other relevant information.
- Proper Coding: Use accurate and appropriate coding for psychiatric services. Stay updated on the latest coding guidelines and ensure that the codes accurately reflect the services rendered.
- Pre-Authorization: If required by the insurance plan, obtain pre-authorization for psychiatric services before providing them. This helps ensure that the services will be covered and reduces the risk of denial.
5. Example Cases
Below are two examples of denial code 122:
- Example 1: A patient seeks reimbursement for a psychiatric evaluation that is not covered under their insurance plan. The claim is denied under code 122 due to the service being non-covered.
- Example 2: A claim for psychiatric therapy is submitted with incomplete documentation, failing to meet the insurer’s requirements. The claim is denied under code 122, and additional documentation is requested.
