Denial Code 173 means that a claim has been denied because the service or equipment billed was not prescribed by a physician. Below you can find the description, common reasons for denial code 173, next steps, how to avoid it, and examples.
2. Description
Denial Code 173 is a Claim Adjustment Reason Code (CARC) and is described as ‘Service/Equipment Not Prescribed by Physician’. This code indicates that the insurance company will not make the payment for the billed service or equipment because it was not prescribed by a physician. In other words, the claim is not payable because the service or equipment was not deemed medically necessary by a qualified healthcare professional.
2. Common Reasons
The most common reasons for denial code 173 are:
- Lack of Physician Prescription: Denial code 173 is often triggered when the service or equipment being billed was not accompanied by a valid prescription from a physician. Insurance companies require a prescription to ensure that the service or equipment is medically necessary and appropriate for the patient’s condition.
- Non-Covered Services: Some services or equipment may not be covered by insurance plans, and therefore, claims for these items will be denied under code 173. It is essential to verify coverage and ensure that the service or equipment being provided is eligible for reimbursement.
- Incorrect Coding: Claims may be denied under code 173 if there are coding errors or discrepancies that indicate the service or equipment was not prescribed by a physician. It is crucial to use the correct codes and accurately document the physician’s prescription to avoid denials.
- Insufficient Documentation: In some cases, claims may be denied if the documentation supporting the physician’s prescription is incomplete or does not meet the insurance company’s requirements. It is essential to provide thorough and detailed documentation to substantiate the medical necessity of the service or equipment.
- Out-of-Network Providers: If the service or equipment was provided by an out-of-network provider without a valid referral or prescription from an in-network physician, the claim may be denied under code 173. It is important to ensure that all necessary referrals and prescriptions are obtained from in-network providers to avoid denials.
3. Next Steps
You can fix denial code 173 as follows:
- Review Documentation: Start by reviewing the documentation related to the denied claim. Ensure that there is a valid prescription from a physician clearly stating the medical necessity of the service or equipment.
- Appeal the Denial: If you believe that the denial was incorrect or unjustified, you can appeal the decision. Provide any additional documentation or information that supports the medical necessity of the service or equipment.
- Coordinate with the Physician: If the denial was due to a lack of physician prescription, coordinate with the physician to obtain the necessary documentation. Ensure that the prescription clearly states the medical necessity of the service or equipment.
- Verify Coverage: Before providing any service or equipment, verify the patient’s insurance coverage to ensure that the specific service or equipment is covered. If it is not covered, discuss alternative options with the patient.
- Train Staff: Provide training to your staff on the importance of obtaining valid physician prescriptions for all services and equipment. Emphasize the need for accurate coding and thorough documentation to avoid denials.
4. How To Avoid It
You can prevent denial code 173 in the future as follows:
- Ensure Physician Involvement: Before providing any service or equipment, ensure that it is prescribed by a physician. Obtain a valid prescription that clearly states the medical necessity of the service or equipment.
- Verify Coverage: Verify the patient’s insurance coverage to ensure that the specific service or equipment is covered. If it is not covered, discuss alternative options with the patient.
- Accurate Coding: Use the correct codes when submitting claims and ensure that the codes accurately reflect the service or equipment being provided. Avoid coding errors or discrepancies that could indicate a lack of physician prescription.
- Thorough Documentation: Provide thorough and detailed documentation to support the medical necessity of the service or equipment. Include the physician’s prescription, any relevant medical records, and any other supporting documentation.
- Stay In-Network: Whenever possible, provide services and equipment through in-network providers. Obtain referrals or prescriptions from in-network physicians to ensure that the claim is not denied due to out-of-network services.
5. Example Cases
Below are two examples of denial code 173:
- Example 1: A patient submits a claim for a specialized medical device without a valid prescription from their physician. The claim is denied under code 173 because the service was not prescribed by a physician.
- Example 2: A provider bills for a non-covered service without verifying the patient’s insurance coverage. The claim is denied under code 173 because the service is not eligible for reimbursement.
