How To Fix Denial Code 150 | Common Reasons, Next Steps & How To Avoid It

Denial Code 150 means that the payer deems the information submitted does not support this level of service. In this article, we will provide a detailed description of denial code 150, 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 150 cases.

2. Description

Denial Code 150 is a claim adjustment reason code (CARC) that indicates the payer’s determination that the information provided does not support the level of service billed. This means that the payer believes that the documentation or evidence submitted does not sufficiently demonstrate the medical necessity or appropriateness of the service provided.

2. Common Reasons

The most common reasons for denial code 150 include:

1. Lack of Sufficient Documentation: One of the primary reasons for denial code 150 is the absence or inadequacy of supporting documentation. Payers require comprehensive documentation that clearly justifies the level of service billed, including medical records, test results, and other relevant information. If the submitted documentation is incomplete, illegible, or does not provide enough detail, the claim may be denied under code 150.
2. Insufficient Medical Necessity: Payers evaluate claims based on medical necessity, which refers to the need for a specific service or treatment to diagnose, prevent, or treat a medical condition. If the documentation fails to establish the medical necessity of the service billed, the claim may be denied under code 150. This could occur if the service is considered experimental, not supported by evidence-based guidelines, or not deemed appropriate for the patient’s condition.
3. Inadequate Coding: Incorrect or incomplete coding can also lead to denial code 150. If the submitted codes do not accurately reflect the level of service provided or if there are discrepancies between the diagnosis and the procedure codes, the claim may be denied. It is crucial to ensure accurate and detailed coding to avoid denials under code 150.
4. Missing or Invalid Authorization: Some services require prior authorization from the payer to ensure coverage. If the provider fails to obtain the necessary authorization or if the authorization is expired or invalid, the claim may be denied under code 150. It is essential to verify and obtain proper authorization before rendering services to avoid denials.

3. Next Steps

If you receive a denial under code 150, follow these next steps to resolve the issue:

1. Review the Denial Explanation: Carefully read the denial explanation provided by the payer to understand the specific reason for the denial. This will help you identify the areas that need to be addressed.
2. Assess the Documentation: Evaluate the documentation submitted with the claim to determine if it adequately supports the level of service billed. Look for any missing or incomplete information that may have contributed to the denial.
3. Consult with the Provider: If you are a billing or coding professional, consult with the healthcare provider to gather additional information or clarification regarding the services provided. This will help you strengthen the case for medical necessity.
4. Submit an Appeal: If you believe that the denial was incorrect or unjustified, prepare a comprehensive appeal letter outlining the reasons why the service should be considered medically necessary. Include any additional supporting documentation or evidence that was not initially submitted.
5. Follow Up with the Payer: After submitting the appeal, follow up with the payer to ensure that it has been received and is being processed. Maintain open communication with the payer to address any further questions or requests for information.

4. How To Avoid It

To avoid denials under code 150 in the future, consider the following strategies:

1. Thorough Documentation: Ensure that all documentation submitted with the claim is complete, legible, and provides a clear rationale for the level of service billed. Include relevant medical records, test results, and any other supporting information that demonstrates medical necessity.
2. Stay Updated with Guidelines: Stay informed about the latest evidence-based guidelines and payer policies regarding medical necessity. Regularly review and update your coding practices to align with these guidelines.
3. Obtain Proper Authorization: Verify the need for prior authorization for specific services and ensure that the authorization is obtained before rendering the service. Keep track of authorization expiration dates and renew them as necessary.
4. Continuing Education: Invest in ongoing training and education for your coding and billing staff to stay up-to-date with coding guidelines, documentation requirements, and payer policies. This will help minimize errors and ensure accurate coding and billing practices.

5. Example Cases

Here are two examples of denial code 150:

• Example 1: A provider submits a claim for an extensive surgical procedure without providing sufficient documentation to support the medical necessity of the procedure. The claim is denied under code 150 due to the lack of supporting evidence.
• Example 2: A provider bills for a high-level evaluation and management (E&M) service but fails to include detailed documentation justifying the complexity and medical necessity of the visit. The claim is denied under code 150 as the information submitted does not support the level of service billed.

Source: Claim Adjustment Reason Codes