How To Fix Denial Code 232 | Common Reasons, Next Steps & How To Avoid It

Denial Code 232 means that there is an institutional transfer amount discrepancy in an institutional claim. This denial code applies only to institutional claims and is used to explain the difference in the Diagnosis-Related Group (DRG) amount when the patient’s care crosses multiple institutions. In this article, we will explore the description of denial code 232, common reasons for its occurrence, next steps to resolve it, how to avoid it in the future, and provide examples of denial code 232 cases.

2. Description

Denial Code 232, also known as ‘Institutional Transfer Amount’, is specific to institutional claims. It indicates that there is a discrepancy in the DRG amount when a patient’s care spans multiple institutions. The DRG amount is a predetermined reimbursement rate assigned to a specific diagnosis or procedure. When a patient is transferred from one institution to another, the DRG amount may differ due to variations in pricing or reimbursement policies between institutions. Denial code 232 is used to explain this difference and signifies that the claim has been denied due to the institutional transfer amount discrepancy.

2. Common Reasons

The most common reasons for denial code 232 are:

1. Multiple Institutions Involved: Denial code 232 typically occurs when a patient’s care involves multiple institutions. This can happen when a patient is transferred from one hospital to another, or when different departments within the same hospital have separate billing systems. Each institution may have its own pricing or reimbursement policies, leading to variations in the DRG amount and triggering denial code 232.
2. Incomplete or Inaccurate Transfer Documentation: When a patient is transferred between institutions, it is crucial to have accurate and complete transfer documentation. This includes medical records, treatment plans, and billing information. If the transfer documentation is incomplete or inaccurate, it can result in discrepancies in the DRG amount and lead to denial code 232.
3. Lack of Communication between Institutions: Effective communication between institutions is essential to ensure accurate billing and reimbursement. If there is a lack of communication or coordination between the transferring and receiving institutions, it can result in discrepancies in the DRG amount and trigger denial code 232.
4. Incorrect Coding or Billing Information: Errors in coding or billing information can also contribute to denial code 232. If the codes used to identify the diagnosis or procedure are incorrect or if there are mistakes in the billing information, it can lead to discrepancies in the DRG amount and result in denial code 232.

3. Next Steps

To resolve denial code 232, the following steps can be taken:

1. Review Transfer Documentation: Carefully review the transfer documentation to ensure that it is complete and accurate. Verify that all relevant medical records, treatment plans, and billing information are included. If any discrepancies or missing information are identified, take steps to rectify them.
2. Communicate with Institutions: Establish effective communication channels between the transferring and receiving institutions. Ensure that there is clear communication regarding the patient’s care, billing, and reimbursement. Address any discrepancies or issues promptly to avoid denial code 232.
3. Verify Coding and Billing Information: Double-check the coding and billing information to ensure accuracy. Verify that the correct codes are used to identify the diagnosis or procedure and that the billing information is complete and error-free. Make any necessary corrections or updates to prevent denial code 232.
4. Appeal or Resubmit the Claim: If denial code 232 is received in error or if the discrepancy in the DRG amount can be resolved, consider appealing the denial or resubmitting the claim with the necessary documentation and explanations. Provide any additional information that supports the correct DRG amount and justifies the reimbursement.
5. Improve Transfer Processes: Evaluate the transfer processes between institutions and identify areas for improvement. Implement measures to enhance communication, documentation, and coordination to minimize the occurrence of denial code 232 in the future.

4. How To Avoid It

To avoid denial code 232 in the future, consider the following steps:

1. Establish Clear Transfer Protocols: Develop clear transfer protocols that outline the necessary documentation, communication channels, and responsibilities when a patient’s care involves multiple institutions. Ensure that all staff members involved in the transfer process are familiar with these protocols.
2. Improve Communication Channels: Strengthen communication channels between institutions to facilitate the exchange of accurate and timely information. Implement systems or technologies that enable seamless communication and collaboration between transferring and receiving institutions.
3. Train Staff on Coding and Billing: Provide comprehensive training to staff members involved in coding and billing processes. Ensure that they are knowledgeable about the coding guidelines and billing requirements specific to institutional claims. Regularly update their knowledge to stay abreast of any changes or updates.
4. Perform Regular Audits: Conduct regular audits of institutional claims to identify any coding or billing errors. Implement processes to rectify these errors promptly and provide feedback to staff members to prevent future occurrences.

5. Example Cases

Here are two examples of denial code 232:

• Example 1: A patient is transferred from Hospital A to Hospital B for specialized treatment. Due to differences in pricing and reimbursement policies between the two hospitals, the DRG amount at Hospital B is higher than the amount initially billed by Hospital A. As a result, denial code 232 is triggered, indicating the institutional transfer amount discrepancy.
• Example 2: A patient undergoes surgery at Hospital X and is later transferred to Hospital Y for post-operative care. However, the transfer documentation is incomplete, and the billing information does not accurately reflect the services provided at both institutions. This leads to discrepancies in the DRG amount and results in denial code 232.

Source: Claim Adjustment Reason Codes