How To Fix Denial Code 186 | Common Reasons, Next Steps & How To Avoid It

Denial Code 186 means that a claim has been denied due to a level of care change adjustment. Below you can find the description, common reasons for denial code 186, next steps, how to avoid it, and examples.

2. Description

Denial Code 186 is a Claim Adjustment Reason Code (CARC) and is described as ‘Level of Care Change Adjustment’. This denial code indicates that the insurance company has made an adjustment to the claim due to a change in the level of care provided to the patient. It means that the billed service has been modified or downgraded, resulting in a reduction in the payment amount.

2. Common Reasons

The most common reasons for denial code 186 are:

1. Change in Treatment Plan: Denial code 186 may occur when there is a change in the patient’s treatment plan, leading to a downgrade in the level of care provided. This could be due to a physician’s decision to modify the treatment approach or a change in the patient’s condition that necessitates a different level of care.
2. Incorrect Billing: If the billed service does not align with the level of care provided, denial code 186 may be triggered. This could happen if the healthcare provider mistakenly bills for a higher level of care than what was actually delivered to the patient.
3. Lack of Medical Necessity: Insurance companies may deny claims under code 186 if they determine that the level of care provided was not medically necessary. This could occur if the insurer believes that a lower level of care would have been sufficient to address the patient’s condition.
4. Documentation Issues: Insufficient or incomplete documentation can also lead to denial code 186. If the medical records do not adequately support the level of care billed, the claim may be denied or adjusted.
5. Policy Limitations: Some insurance policies have limitations on the coverage for certain levels of care. If the billed service exceeds the policy’s coverage limits, denial code 186 may be applied.

3. Next Steps

You can address denial code 186 by taking the following steps:

1. Review the Claim: Carefully review the denied claim to understand the specific reason for the level of care change adjustment. Identify any discrepancies or errors in the billed service and compare it to the actual level of care provided.
2. Consult with the Provider: If you believe that the level of care billed is accurate and necessary, consult with the healthcare provider who delivered the service. They can provide additional information or documentation to support the claim and justify the level of care provided.
3. Appeal the Denial: If you disagree with the denial and have supporting evidence, consider appealing the decision. Follow the insurance company’s appeal process and provide all necessary documentation to demonstrate the medical necessity and appropriateness of the billed level of care.
4. Coordinate with the Patient: Keep the patient informed about the denial and the steps being taken to address it. Discuss any potential financial implications and work together to find a resolution.
5. Seek Expert Assistance: If the denial persists or the appeal process becomes complex, consider seeking assistance from a healthcare billing expert or a professional medical billing service. They can provide guidance and expertise in navigating the appeals process and increasing the chances of a successful outcome.

4. How To Avoid It

To avoid denial code 186 in the future, consider the following measures:

1. Accurate Documentation: Ensure that all medical records accurately reflect the level of care provided to the patient. Document the rationale for the chosen level of care and any changes made to the treatment plan.
2. Proper Coding: Assign the appropriate codes that accurately represent the level of care provided. Familiarize yourself with the coding guidelines and ensure that the codes selected align with the documented level of care.
3. Medical Necessity: Before providing a higher level of care, ensure that it is medically necessary and well-documented. Consult with the patient’s primary care physician or specialists to determine the appropriate level of care based on the patient’s condition.
4. Verify Insurance Coverage: Check the patient’s insurance coverage and policy limitations to ensure that the billed level of care falls within the covered services. If there are any doubts or uncertainties, contact the insurance company for clarification.
5. Regular Training and Education: Stay updated with the latest coding guidelines, insurance policies, and documentation requirements. Provide regular training to your billing and administrative staff to ensure they are knowledgeable about the proper procedures and requirements to avoid denials.

5. Example Cases

Below are two examples of denial code 186:

• Example 1: A patient undergoes a surgical procedure that requires a higher level of care in a hospital setting. However, the insurance company determines that the level of care provided could have been adequately delivered in an outpatient facility. As a result, the claim is adjusted under denial code 186, leading to a reduction in the payment amount.
• Example 2: A healthcare provider bills for a complex diagnostic test that requires specialized equipment and expertise. However, the insurance company determines that a less expensive and less specialized test would have sufficed. The claim is adjusted under denial code 186, resulting in a lower payment amount.

Source: Claim Adjustment Reason Codes