How To Fix Denial Code 201 | Common Reasons, Next Steps & How To Avoid It
Denial Code 201 means that the patient is responsible for the amount of the claim or service through a ‘set aside arrangement’ or other agreement. This denial code is used only with Group Code PR. In order to provide more information about the denial, at least one Remark Code must be provided. It is important to note that this denial code should not be used by Workers’ Compensation payers; instead, code P3 should be used.
2. Description
Denial Code 201 is used when the patient is responsible for the payment of the claim or service through a ‘set aside arrangement’ or other agreement. This denial code is typically used in situations where there is an agreement in place between the patient and the payer that specifies the patient’s responsibility for the cost of the claim or service. It is important to note that this denial code should only be used with Group Code PR, which indicates that the patient is responsible for the payment.
2. Common Reasons
The most common reasons for denial code 201 are:
- Set Aside Arrangement: Denial code 201 is often used when there is a set aside arrangement in place between the patient and the payer. A set aside arrangement is an agreement that specifies the patient’s responsibility for the payment of the claim or service.
- Other Agreements: In addition to set aside arrangements, denial code 201 may also be used when there are other agreements in place between the patient and the payer that specify the patient’s responsibility for the payment.
3. Next Steps
If you receive denial code 201, there are several steps you can take to address the issue:
- Review the Agreement: First, review the agreement between the patient and the payer to ensure that the patient is indeed responsible for the payment of the claim or service. Verify that the agreement is valid and up to date.
- Check Remark Codes: Check the Remark Codes provided with the denial to gather more information about the specific reason for the denial. The Remark Codes may provide additional details or instructions on how to proceed.
- Contact the Payer: If you have any questions or concerns about the denial, contact the payer directly. They can provide clarification on the denial and help you understand the patient’s responsibility for the payment.
- Consider Appeals: If you believe that the denial is incorrect or unjustified, you may consider filing an appeal. Gather any supporting documentation or evidence that demonstrates why the denial should be overturned.
4. How To Avoid It
To avoid denial code 201 in the future, consider the following steps:
- Clear Communication: Ensure that there is clear communication between the patient and the payer regarding any agreements or arrangements for payment. Make sure that both parties understand their responsibilities.
- Documentation: Keep thorough documentation of any agreements or arrangements for payment. This documentation can serve as evidence in case of a denial or dispute.
- Review Contracts: Regularly review any contracts or agreements with payers to ensure that they accurately reflect the patient’s responsibility for payment. Update the contracts as necessary.
5. Example Cases
Here are two examples of denial code 201:
- Example 1: A patient has a set aside arrangement with their insurance company, which specifies that they are responsible for 20% of the cost of any medical services. When the patient submits a claim for a $100 service, they receive denial code 201, indicating that they are responsible for $20 of the cost.
- Example 2: A patient has an agreement with their healthcare provider to pay a discounted rate for a specific service. When the provider submits a claim for the service, they receive denial code 201, indicating that the patient is responsible for the agreed-upon payment amount.
Source: Claim Adjustment Reason Codes