How To Fix Denial Code 174 | Common Reasons, Next Steps & How To Avoid It

Denial Code 174 means that a claim has been denied because the service was not prescribed prior to delivery. Below you can find the description, common reasons for denial code 174, next steps, how to avoid it, and examples.

2. Description

Denial Code 174 is a Claim Adjustment Reason Code (CARC) and is described as ‘Service was not prescribed prior to delivery’. This means that the insurance company will not make the payment for the billed service because it was not prescribed by a healthcare provider before it was delivered. In simpler terms, the claim is not payable because the service was not authorized in advance.

2. Common Reasons

The most common reasons for denial code 174 are:

1. Lack of Prior Authorization: Many insurance plans require prior authorization for certain services or procedures. If the service was not authorized by the insurance company before it was delivered, the claim may be denied under Code 174.
2. Incorrect or Incomplete Documentation: In some cases, the denial may occur due to missing or incomplete documentation. The insurance company may require specific information or forms to be submitted along with the claim to verify the medical necessity of the service. If this documentation is not provided or is incomplete, the claim may be denied.
3. Non-Covered Service: Certain services may not be covered by the insurance plan at all. If the service falls into this category and was not authorized in advance, the claim may be denied under Code 174.
4. Out-of-Network Provider: If the service was provided by an out-of-network provider and was not authorized in advance, the claim may be denied. Insurance plans often have different coverage rules and requirements for out-of-network providers.
5. Expired Prior Authorization: Prior authorizations typically have an expiration date. If the service was delivered after the expiration date of the prior authorization, the claim may be denied under Code 174.

3. Next Steps

You can fix denial code 174 as follows:

1. Review Prior Authorization Requirements: Familiarize yourself with the prior authorization requirements of the insurance plans you work with. Ensure that you understand which services require prior authorization and the specific documentation or forms that need to be submitted.
2. Confirm Prior Authorization Status: Before delivering a service, verify that the necessary prior authorization has been obtained. Check with the insurance company to ensure that the service has been authorized and that the authorization is still valid.
3. Submit Complete Documentation: Make sure that all required documentation and forms are submitted along with the claim. Double-check that the documentation is complete and accurate, providing all necessary information to support the medical necessity of the service.
4. Appeal the Denial: If the claim is denied under Code 174 and you believe that the service was properly authorized, you can appeal the denial. Gather any additional documentation or information that supports the authorization and submit an appeal to the insurance company.
5. Coordinate with the Provider: If the denial is due to the service being provided by an out-of-network provider, work with the provider to determine the best course of action. They may be able to assist with the appeal process or provide guidance on how to address the denial.

4. How To Avoid It

You can prevent denial code 174 in the future as follows:

1. Verify Prior Authorization: Always verify the prior authorization requirements for the services you provide. Ensure that you have obtained the necessary authorization before delivering the service.
2. Submit Complete Documentation: Pay close attention to the documentation requirements of the insurance plans you work with. Make sure that all necessary documentation is submitted along with the claim, providing clear and comprehensive information to support the medical necessity of the service.
3. Stay In-Network: Whenever possible, work with in-network providers to minimize the risk of denials due to out-of-network services. In-network providers are more likely to be familiar with the prior authorization requirements and processes of the insurance plans they work with.
4. Stay Up-to-Date: Keep yourself informed about any changes or updates to the prior authorization requirements of the insurance plans you work with. Regularly review the plan’s policies and guidelines to ensure compliance.

5. Example Cases

Below are two examples of denial code 174:

• Example 1: A patient undergoes a specialized imaging procedure without obtaining prior authorization from their insurance company. The claim is subsequently denied under Code 174 because the service was not prescribed prior to delivery.
• Example 2: A provider submits a claim for a surgical procedure that requires prior authorization. However, the documentation submitted with the claim is incomplete, and the claim is denied under Code 174.

Source: Claim Adjustment Reason Codes