How To Fix Denial Code 21 | Common Reasons, Next Steps & How To Avoid It

Denial Code 21 means that the injury or illness being claimed is the responsibility of the no-fault carrier. In this article, we will provide a detailed description of denial code 21, common reasons for its occurrence, next steps to resolve the denial, tips on how to avoid it in the future, and examples of denial code 21 cases.

2. Description

Denial Code 21 is a Claim Adjustment Reason Code (CARC) that indicates the liability for the injury or illness being claimed lies with the no-fault carrier. This means that the insurance company will not make the payment for the billed service because it falls under the responsibility of the no-fault carrier. In simpler terms, the claim is denied because the injury or illness is not covered by the patient’s insurance policy, but rather by a separate no-fault insurance policy.

2. Common Reasons

The most common reasons for denial code 21 are:

1. No-Fault Insurance Coverage: Denial code 21 occurs when the patient’s insurance policy does not cover the specific injury or illness being claimed. Instead, the responsibility for the claim lies with a separate no-fault insurance policy, which is designed to cover medical expenses resulting from accidents or injuries.
2. Incorrect Insurance Information: Denial code 21 may occur if there is a mistake in the insurance information provided on the claim. This could include errors in policy numbers, coverage dates, or other relevant details that result in the claim being processed under the wrong insurance policy.
3. Lack of Coordination of Benefits: In cases where the patient has multiple insurance policies, a lack of coordination between the policies can lead to denial code 21. This occurs when there is confusion over which policy should be responsible for the claim, resulting in denials from the primary insurance company.
4. Excluded Services: Denial code 21 may also occur if the specific service or treatment being claimed is excluded from coverage under the patient’s insurance policy. In such cases, the claim will be denied as the insurance company is not liable for the expenses related to the excluded service.

3. Next Steps

If you receive denial code 21, follow these next steps to resolve the denial:

1. Review Insurance Policy: Carefully review the patient’s insurance policy to determine if the injury or illness being claimed falls under the responsibility of the no-fault carrier. Ensure that the claim was submitted to the correct insurance company.
2. Contact No-Fault Carrier: If the injury or illness is indeed the liability of the no-fault carrier, contact the appropriate no-fault insurance company to initiate the claim process. Provide them with all the necessary documentation and information to support the claim.
3. Appeal the Denial: If you believe that the denial was made in error or due to incorrect information, you can appeal the denial. Gather any supporting documentation or evidence that proves the claim should be covered by the patient’s insurance policy and submit it along with the appeal.
4. Coordinate Benefits: If the patient has multiple insurance policies, ensure that the coordination of benefits is properly handled. Contact both insurance companies to clarify which policy should be responsible for the claim and provide them with any necessary information or documentation.

4. How To Avoid It

To avoid denial code 21 in the future, consider the following tips:

1. Verify Insurance Coverage: Before providing any services, verify the patient’s insurance coverage and ensure that the specific injury or illness being treated is covered by their policy. If it falls under the responsibility of a no-fault carrier, obtain the necessary information to submit the claim to the correct insurance company.
2. Accurate Insurance Information: Double-check all insurance information provided on the claim to avoid any errors or discrepancies. Ensure that policy numbers, coverage dates, and other relevant details are entered correctly to prevent denials due to incorrect insurance information.
3. Coordinate Benefits: If the patient has multiple insurance policies, ensure that the coordination of benefits is properly handled. Clearly communicate with the patient and both insurance companies to determine which policy should be responsible for the claim and avoid any confusion or denials.
4. Understand Exclusions: Familiarize yourself with the patient’s insurance policy and understand any exclusions or limitations. This will help you determine if a specific service or treatment is covered or excluded, allowing you to avoid denials related to excluded services.

5. Example Cases

Here are two examples of denial code 21:

• Example 1: A patient submits a claim for medical expenses related to a car accident. However, their insurance policy does not cover injuries resulting from accidents, and the claim is denied under denial code 21. The responsibility for the claim lies with the no-fault insurance carrier.
• Example 2: A provider mistakenly submits a claim to the patient’s primary insurance company instead of the no-fault carrier, resulting in a denial under denial code 21. The claim should have been submitted to the no-fault carrier as the injury falls under their liability.

Source: Claim Adjustment Reason Codes