How To Fix Denial Code 167 | Common Reasons, Next Steps & How To Avoid It

Denial Code 167 means that the diagnosis or diagnoses listed on the claim are not covered by the insurance company. This denial code indicates that the insurance company will not provide payment for the services rendered due to the specific diagnosis not being covered under the patient’s policy. In this article, we will explore the description of denial code 167, common reasons for its occurrence, next steps to resolve the denial, how to avoid it in the future, and provide examples of denial code 167 cases.

2. Description

Denial Code 167 is a claim adjustment reason code (CARC) that signifies that the diagnosis or diagnoses listed on the claim are not covered by the patient’s insurance policy. This code is typically accompanied by the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF) for further reference and clarification. It is important to review this segment, if present, to understand the specific policy details related to the denial.

2. Common Reasons

The most common reasons for denial code 167 are:

1. Non-Covered Diagnosis: Denial code 167 is triggered when the diagnosis or diagnoses listed on the claim are not included in the list of covered conditions under the patient’s insurance policy. Insurance companies have specific guidelines and policies regarding which diagnoses they will cover, and if the submitted diagnosis falls outside of these guidelines, the claim will be denied under code 167.
2. Policy Exclusions: Some insurance policies have specific exclusions for certain diagnoses or conditions. If the submitted diagnosis falls under one of these exclusions, the claim will be denied under code 167. It is important to review the patient’s policy to understand any specific exclusions that may apply.
3. Lack of Medical Necessity: Insurance companies require that services and treatments be medically necessary for coverage. If the diagnosis listed on the claim does not meet the insurance company’s criteria for medical necessity, the claim may be denied under code 167. It is crucial to ensure that the diagnosis accurately reflects the medical necessity of the services provided.
4. Incorrect Coding: In some cases, denial code 167 may be triggered due to coding errors. If the diagnosis code listed on the claim does not match the services rendered or is not supported by the medical documentation, the claim may be denied under code 167. It is essential to review the coding accuracy and ensure that it aligns with the services provided and the medical documentation.

3. Next Steps

To resolve denial code 167, follow these next steps:

1. Review Policy and Guidelines: Thoroughly review the patient’s insurance policy and guidelines to understand the specific coverage limitations and exclusions. This will help determine if the denial is valid or if there is room for appeal.
2. Verify Diagnosis Accuracy: Double-check the accuracy of the diagnosis listed on the claim. Ensure that it aligns with the services provided and is supported by the medical documentation. If there are any coding errors or discrepancies, correct them before resubmitting the claim.
3. Appeal the Denial: If you believe the denial is incorrect or unjustified, file an appeal with the insurance company. Provide any additional supporting documentation, such as medical records or expert opinions, to strengthen your case. Follow the insurance company’s appeal process and provide all necessary information within the specified timeframe.
4. Consider Alternative Payment Options: If the denial is upheld, explore alternative payment options with the patient. This may include discussing self-pay options, payment plans, or seeking financial assistance programs that can help cover the cost of the services.
5. Educate and Communicate: Use the denial as an opportunity to educate both your staff and patients. Ensure that your coding and billing team is well-trained and up-to-date on the latest coding guidelines. Communicate with patients about their insurance coverage and any potential limitations or exclusions that may affect their claims.

4. How To Avoid It

To avoid denial code 167 in the future, consider the following steps:

1. Verify Coverage: Before providing services, verify the patient’s insurance coverage and review the policy for any specific limitations, exclusions, or requirements related to diagnoses. This will help you determine if the services will be covered and prevent potential denials.
2. Accurate Coding: Ensure that the diagnosis codes accurately reflect the services provided and are supported by the medical documentation. Regularly train your coding and billing team to stay updated on the latest coding guidelines and best practices.
3. Medical Necessity Documentation: Document the medical necessity of the services provided in the patient’s medical records. This will help support the claim and demonstrate that the services were necessary and appropriate for the patient’s condition.
4. Clear Communication: Communicate with patients about their insurance coverage, including any limitations or exclusions that may apply. Set clear expectations regarding potential out-of-pocket costs and discuss alternative payment options if necessary.

5. Example Cases

Here are two examples of denial code 167:

• Example 1: A patient submits a claim for cosmetic surgery, which is not covered under their insurance policy. The claim is denied under code 167, indicating that the diagnosis for cosmetic surgery is not a covered condition.
• Example 2: A provider submits a claim for a specific procedure using an incorrect diagnosis code that is not supported by the medical documentation. The claim is denied under code 167 due to the mismatch between the diagnosis code and the services rendered.

Source: Claim Adjustment Reason Codes