How To Fix Denial Code 137 | Common Reasons, Next Steps & How To Avoid It

Denial Code 137 means that a claim has been denied due to regulatory surcharges, assessments, allowances, or health-related taxes. Below you can find the description, common reasons for denial code 137, next steps, how to avoid it, and examples.

2. Description

Denial Code 137 is a Claim Adjustment Reason Code (CARC) and is described as ‘Regulatory Surcharges, Assessments, Allowances or Health Related Taxes’. This code indicates that the claim has been denied because it includes charges related to regulatory surcharges, assessments, allowances, or health-related taxes that are not covered by the insurance policy. These charges are typically not eligible for reimbursement and are the responsibility of the patient or provider.

2. Common Reasons

The most common reasons for denial code 137 are:

1. Ineligible Charges: Denial code 137 is often triggered when the claim includes charges that are not covered by the insurance policy. This can include surcharges, assessments, allowances, or health-related taxes that are not eligible for reimbursement.
2. Missing or Incomplete Documentation: If the claim does not include proper documentation or supporting information regarding the regulatory surcharges, assessments, allowances, or health-related taxes, it may be denied under code 137. Insufficient documentation can make it difficult for the insurance company to determine the eligibility of these charges.
3. Incorrect Coding: Incorrect coding of the charges related to regulatory surcharges, assessments, allowances, or health-related taxes can also lead to denial code 137. It is important to use the correct codes and modifiers to accurately represent these charges on the claim.
4. Policy Exclusions: Some insurance policies may specifically exclude coverage for certain regulatory surcharges, assessments, allowances, or health-related taxes. If the claim includes charges that fall under these exclusions, it will be denied under code 137.

3. Next Steps

You can address denial code 137 as follows:

1. Review the Claim: Carefully review the denied claim to identify the specific charges that were denied under code 137. Determine if these charges are related to regulatory surcharges, assessments, allowances, or health-related taxes.
2. Verify Policy Coverage: Check the patient’s insurance policy to determine if the charges in question are covered or excluded. If the charges are excluded, inform the patient or provider that they are responsible for these costs.
3. Provide Documentation: If the charges are eligible for reimbursement, ensure that the claim includes proper documentation and supporting information. This may include invoices, receipts, or other documentation that clearly explains the nature of the charges and their relationship to regulatory requirements or taxes.
4. Appeal the Denial: If you believe that the denial was incorrect or unjustified, you can appeal the denial. Provide additional documentation or evidence to support your case and explain why you believe the charges should be covered by the insurance policy.
5. Communicate with the Insurance Company: If there is confusion or disagreement regarding the coverage of the charges, contact the insurance company to discuss the denial. Clarify the nature of the charges and provide any necessary documentation to support your position.
6. Adjust Billing Practices: To avoid future denials under code 137, ensure that your billing practices accurately reflect the coverage or exclusion of regulatory surcharges, assessments, allowances, or health-related taxes. Review and update your coding practices to ensure that the charges are properly represented on the claim.

4. How To Avoid It

You can prevent denial code 137 in the future by following these steps:

1. Understand Policy Coverage: Familiarize yourself with the patient’s insurance policy and its coverage or exclusion of regulatory surcharges, assessments, allowances, or health-related taxes. This will help you determine which charges are eligible for reimbursement and which are not.
2. Accurate Coding: Ensure that the charges related to regulatory surcharges, assessments, allowances, or health-related taxes are coded correctly on the claim. Use the appropriate codes and modifiers to accurately represent these charges.
3. Proper Documentation: Include all necessary documentation and supporting information with the claim to clearly explain the nature of the charges and their relationship to regulatory requirements or taxes. This will help the insurance company understand the eligibility of these charges.
4. Verify Eligibility: Before submitting the claim, verify the eligibility of the charges with the insurance company. This can help you identify any potential issues or exclusions that may result in a denial under code 137.

5. Example Cases

Below are two examples of denial code 137:

• Example 1: A healthcare provider submits a claim that includes charges for a regulatory assessment imposed by a local government. However, the patient’s insurance policy specifically excludes coverage for such assessments. As a result, the claim is denied under code 137, and the provider must bill the patient directly for these charges.
• Example 2: A provider mistakenly includes charges for a health-related tax on a claim, assuming that it would be covered by the patient’s insurance policy. However, the policy explicitly excludes coverage for such taxes. The claim is denied under code 137, and the provider must seek payment directly from the patient.

Source: Claim Adjustment Reason Codes