How To Fix Denial Code 171 | Common Reasons, Next Steps & How To Avoid It

Denial Code 171 means that payment is denied when a service is performed or billed by a specific type of provider in a specific type of facility. This denial code is often accompanied by a reference to the 835 Healthcare Policy Identification Segment, which provides additional information about the denial. In this article, we will explore the description of denial code 171, common reasons for its occurrence, next steps to resolve it, how to avoid it in the future, and provide examples of denial code 171 cases.

2. Description

Denial Code 171 is a specific claim adjustment reason code (CARC) that indicates payment denial for services performed or billed by a particular type of provider in a specific type of facility. This denial code is typically accompanied by a reference to the 835 Healthcare Policy Identification Segment, which provides further details about the denial. It is important to review this segment to understand the specific reasons for the denial and any additional information provided by the insurance company.

2. Common Reasons

There are several common reasons for the occurrence of denial code 171:

1. Provider Type Restriction: Denial code 171 may occur when the insurance policy restricts payment for services performed by a specific type of provider. This could be due to contractual agreements, network limitations, or policy exclusions. If the service was performed by a provider who is not covered under the patient’s insurance plan, the claim will be denied under code 171.
2. Facility Type Restriction: Similarly, denial code 171 may be triggered when the service is performed in a facility that is not covered by the patient’s insurance plan. Insurance policies often have specific coverage limitations based on the type of facility where the service is provided. If the service was performed in a facility that is not eligible for reimbursement under the patient’s insurance plan, the claim will be denied under code 171.
3. Incorrect Provider or Facility Information: Denial code 171 may also occur if there are errors or discrepancies in the provider or facility information submitted on the claim. This could include incorrect provider identification numbers, incorrect facility codes, or other inaccuracies in the claim submission. It is important to ensure that all provider and facility information is accurate and up-to-date to avoid denial code 171.
4. Lack of Prior Authorization: Some insurance plans require prior authorization for certain services or procedures. If the service was performed without obtaining the necessary prior authorization, the claim may be denied under code 171. It is important to verify the requirements for prior authorization and ensure that all necessary approvals are obtained before providing the service.

3. Next Steps

If you receive a denial with code 171, here are the next steps to resolve it:

1. Review the 835 Healthcare Policy Identification Segment: The 835 segment will provide additional information about the denial, including any specific policy restrictions or requirements. Review this segment carefully to understand the reasons for the denial and any steps that need to be taken to resolve it.
2. Contact the Insurance Company: If you have any questions or need clarification about the denial, contact the insurance company’s provider support. They can provide further information about the denial and guide you on the necessary steps to resolve it.
3. Correct Any Errors: If the denial was due to errors or discrepancies in the provider or facility information, correct these errors and resubmit the claim with the accurate information. Ensure that all provider and facility information is up-to-date and accurate to avoid future denials.
4. Obtain Prior Authorization: If the denial was due to a lack of prior authorization, work with the insurance company to obtain the necessary approvals. Follow their guidelines and procedures for obtaining prior authorization and resubmit the claim once the authorization has been obtained.
5. Appeal the Denial: If you believe that the denial was incorrect or unjustified, you have the option to appeal the decision. Gather any supporting documentation or evidence that demonstrates the medical necessity of the service and submit an appeal to the insurance company. Follow their appeals process and provide any requested information to support your case.

4. How To Avoid It

To avoid denial code 171 in the future, consider the following steps:

1. Verify Provider and Facility Coverage: Before providing services, verify that the provider and facility are covered under the patient’s insurance plan. Check the provider’s network status and ensure that the facility is eligible for reimbursement under the insurance plan.
2. Ensure Accurate Provider and Facility Information: Double-check all provider and facility information before submitting a claim. Verify provider identification numbers, facility codes, and other relevant details to avoid any errors or discrepancies that could lead to denial code 171.
3. Obtain Prior Authorization: Familiarize yourself with the insurance plan’s requirements for prior authorization. Ensure that all necessary approvals are obtained before providing services that require prior authorization. Follow the insurance company’s guidelines and procedures to avoid denials due to a lack of prior authorization.
4. Stay Informed About Policy Restrictions: Regularly review and stay updated on the insurance plan’s policy restrictions and limitations. Be aware of any changes or updates that may affect the coverage of certain providers or facilities. This will help you avoid denials under code 171.

5. Example Cases

Here are two examples of denial code 171:

• Example 1: A patient receives a specialized procedure from a provider who is not included in their insurance plan’s network. The claim is subsequently denied under code 171, as the insurance plan does not cover services performed by this specific provider.
• Example 2: A provider submits a claim for a service performed in a facility that is not eligible for reimbursement under the patient’s insurance plan. The claim is denied under code 171, as the insurance plan does not cover services performed in this type of facility.

Source: Claim Adjustment Reason Codes