How To Fix Denial Code 16 | Common Reasons, Next Steps & How To Avoid It

Denial Code 16 means that a claim or service has been denied due to lacking information or having submission/billing errors. This code should not be used for claims attachments or other documentation. At least one Remark Code must be provided, which can be either the NCPDP Reject Reason Code or a Remittance Advice Remark Code that is not an ALERT. It is important to refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF) if it is present. In this article, we will explore the description, common reasons for denial code 16, next steps to resolve it, how to avoid it in the future, and provide example cases.

2. Description

Denial Code 16 is a claim adjustment reason code (CARC) that indicates a lack of information or submission/billing errors in a claim or service. This code is used when there is missing or incorrect information that prevents the claim from being processed or paid. It is important to note that Denial Code 16 should not be used for claims attachments or other documentation. Additionally, at least one Remark Code must be provided, which can be either the NCPDP Reject Reason Code or a Remittance Advice Remark Code that is not an ALERT. If the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF) is present, it should be referred to for further information.

2. Common Reasons

The most common reasons for denial code 16 are:

1. Missing Information: One of the main reasons for denial code 16 is the absence of crucial information in the claim or service. This can include missing patient identifiers, service codes, dates of service, or any other required data. Without complete and accurate information, the claim cannot be processed, leading to denial.
2. Billing Errors: Denial code 16 can also occur due to billing errors. This can include incorrect coding, incorrect modifiers, or incorrect billing amounts. These errors can result in the claim being rejected or denied.
3. Submission Errors: Another common reason for denial code 16 is submission errors. This can include issues with the format of the claim, missing or incorrect attachments, or failure to follow specific submission guidelines. These errors can prevent the claim from being processed correctly.
4. Lack of Documentation: Denial code 16 may also be triggered if the necessary documentation or supporting information is not provided with the claim. This can include medical records, prior authorization forms, or any other documentation required by the payer.
5. Invalid or Expired Codes: If the claim contains invalid or expired codes, it may be denied under code 16. This can include outdated or no longer accepted procedure codes, diagnosis codes, or any other codes required for billing.

3. Next Steps

To resolve denial code 16, the following steps can be taken:

1. Review the Denial Explanation: Carefully review the denial explanation provided by the payer. This will help identify the specific information or billing errors that led to the denial.
2. Correct the Errors: Once the errors have been identified, take the necessary steps to correct them. This may involve updating the claim with the missing or corrected information, ensuring accurate coding and billing, or providing the required documentation.
3. Resubmit the Claim: After making the necessary corrections, resubmit the claim to the payer. Ensure that all the required information and documentation are included with the resubmission.
4. Follow Up with the Payer: It is important to follow up with the payer to ensure that the resubmitted claim is received and processed correctly. This can help expedite the resolution process and ensure that the claim is paid.
5. Document the Process: Keep a record of all the steps taken to resolve the denial. This documentation can be useful for future reference and can help in case of any further disputes or inquiries.

4. How To Avoid It

To avoid denial code 16 in the future, consider the following measures:

1. Ensure Complete and Accurate Information: Double-check all the information provided in the claim for accuracy and completeness. This includes patient identifiers, service codes, dates of service, and any other required data. Providing complete and accurate information from the start can help prevent denial code 16.
2. Train Staff on Billing Procedures: Properly train your billing staff on the correct coding and billing procedures. This will help minimize billing errors and ensure that claims are submitted correctly.
3. Follow Submission Guidelines: Familiarize yourself with the specific submission guidelines of each payer. This includes understanding the required format, attachments, and any other specific requirements. Adhering to these guidelines can help prevent submission errors.
4. Maintain Up-to-Date Codes: Regularly update your code sets to ensure that you are using valid and current codes. This includes procedure codes, diagnosis codes, and any other codes required for billing. Using outdated or invalid codes can lead to denial code 16.
5. Keep Documentation in Order: Maintain proper documentation for each claim, including medical records, prior authorization forms, and any other supporting documentation. This will help ensure that all the necessary documentation is provided with the claim, reducing the risk of denial code 16.

5. Example Cases

Below are two examples of denial code 16:

• Example 1: A healthcare provider submits a claim for a procedure but fails to include the required supporting documentation, such as medical records or prior authorization forms. The claim is denied under code 16 due to the lack of documentation.
• Example 2: A billing error occurs when a provider mistakenly codes a service with an incorrect modifier. The claim is denied under code 16, highlighting the billing error.

Source: Claim Adjustment Reason Codes