How To Fix Denial Code 136 | Common Reasons, Next Steps & How To Avoid It

Denial Code 136 means that a claim has been denied due to failure to follow the prior payer’s coverage rules. This denial code should only be used with Group Code OA. In this article, we will provide a description of denial code 136, common reasons for its occurrence, next steps to resolve the denial, tips on how to avoid it in the future, and examples of denial code 136 cases.

2. Description

Denial Code 136 is a specific Claim Adjustment Reason Code (CARC) that indicates a claim has been denied because the provider failed to adhere to the coverage rules set by the prior payer. This denial code is typically used in conjunction with Group Code OA. It signifies that the claim does not meet the requirements or guidelines established by the previous insurance company, resulting in the denial of payment.

2. Common Reasons

The most common reasons for denial code 136 are:

1. Incorrect Prior Authorization: One of the main reasons for denial code 136 is the failure to obtain or submit the necessary prior authorization for the services rendered. Insurance companies often require pre-approval for certain procedures or treatments, and if this step is overlooked or not properly documented, the claim may be denied.
2. Out-of-Network Services: Denial code 136 can also occur when services are provided by a healthcare provider who is not in the patient’s insurance network. Insurance plans often have specific networks of providers, and if a patient seeks care outside of these networks without proper authorization, the claim may be denied.
3. Non-Covered Services: Another reason for denial code 136 is when the services rendered are not covered under the patient’s insurance plan. Each insurance policy has its own set of covered services, and if the treatment or procedure falls outside of these covered services, the claim may be denied.
4. Missing or Incomplete Documentation: Insufficient or incomplete documentation can also lead to denial code 136. If the provider fails to submit all the necessary supporting documents or medical records required by the prior payer, the claim may be denied due to lack of evidence or information.
5. Expired Prior Authorization: Denial code 136 can occur if the prior authorization for a specific service or treatment has expired. Insurance companies often set time limits for prior authorizations, and if the service is rendered after the expiration date, the claim may be denied.

3. Next Steps

To resolve denial code 136, the following steps can be taken:

1. Review Prior Payer’s Coverage Rules: Carefully examine the coverage rules and requirements set by the prior payer. Understand the specific guidelines that were not followed and identify any missing or incorrect information.
2. Appeal the Denial: If you believe the denial was unjustified or there was an error in the prior payer’s determination, consider filing an appeal. Gather all relevant documentation, including prior authorizations, medical records, and any other supporting evidence, to strengthen your case.
3. Communicate with the Prior Payer: Reach out to the prior payer’s provider support or claims department to discuss the denial and seek clarification on the coverage rules. Understand their perspective and address any concerns they may have.
4. Resubmit the Claim: If the denial was due to missing or incomplete documentation, ensure that all necessary information is included in the resubmitted claim. Double-check that prior authorizations are up to date and accurately reflect the services rendered.
5. Coordinate with the Patient: Keep the patient informed about the denial and involve them in the resolution process. Explain the reasons for the denial and discuss potential options, such as appealing the decision or exploring alternative payment arrangements.

4. How To Avoid It

To avoid denial code 136 in the future, consider the following tips:

1. Verify Prior Authorization Requirements: Familiarize yourself with the prior authorization requirements of each insurance plan you work with. Ensure that all necessary authorizations are obtained before providing services to avoid potential denials.
2. Stay Within Network: Whenever possible, refer patients to healthcare providers within their insurance network. If out-of-network services are necessary, obtain proper authorization and inform the patient about potential coverage limitations.
3. Review Coverage Policies: Regularly review the coverage policies of the insurance plans you work with. Stay updated on any changes or updates to ensure that the services you provide align with the covered services outlined in the policies.
4. Thorough Documentation: Maintain accurate and complete documentation for all services rendered. Include relevant medical records, prior authorizations, and any other supporting documents to demonstrate medical necessity and compliance with coverage rules.
5. Effective Communication: Communicate openly and clearly with patients about their insurance coverage and any potential limitations or requirements. Educate them about the importance of prior authorizations and the potential consequences of not following coverage rules.

5. Example Cases

Here are two examples of denial code 136:

• Example 1: A provider submits a claim for a surgical procedure without obtaining the required prior authorization from the patient’s insurance company. The claim is subsequently denied under denial code 136 due to failure to follow the prior payer’s coverage rules.
• Example 2: A patient seeks treatment from an out-of-network specialist without obtaining proper authorization. The claim for the services rendered is denied under denial code 136, as the provider did not adhere to the coverage rules set by the prior payer.

Source: Claim Adjustment Reason Codes