How To Fix Denial Code 24 | Common Reasons, Next Steps & How To Avoid It

Denial Code 24 means that charges are covered under a capitation agreement or managed care plan. Below you can find the description, common reasons for denial code 24, next steps, how to avoid it, and examples.

2. Description

Denial Code 24 is a Claim Adjustment Reason Code (CARC) that indicates charges are covered under a capitation agreement or managed care plan. This means that the insurance company has a pre-negotiated agreement with the healthcare provider, where the provider receives a fixed payment per patient, regardless of the services rendered. As a result, the claim is denied because the charges are already covered under this agreement, and the insurance company will not make any additional payment.

2. Common Reasons

The most common reasons for denial code 24 are:

1. Capitation Agreement: Denial code 24 is often triggered when the healthcare provider has a capitation agreement or managed care plan with the insurance company. Under this agreement, the provider receives a fixed payment for each patient, regardless of the services provided. As a result, any claims submitted for services covered under the capitation agreement will be denied.
2. Incorrect Billing: Denial code 24 can also occur due to incorrect billing practices. If the provider mistakenly bills for services that are covered under the capitation agreement, the claim will be denied. This can happen if there is confusion or lack of awareness about the specific services covered under the agreement.
3. Lack of Authorization: In some cases, denial code 24 may be triggered if the services rendered were not authorized under the capitation agreement or managed care plan. If the provider performs services that are not included in the agreement, the claim will be denied.
4. Expired Agreement: Denial code 24 can also occur if the capitation agreement or managed care plan has expired. If the provider continues to bill for services under an expired agreement, the claim will be denied.

3. Next Steps

You can address denial code 24 as follows:

1. Review Capitation Agreement: First, review the capitation agreement or managed care plan with the insurance company. Ensure that you understand the specific services covered under the agreement and any limitations or exclusions.
2. Verify Authorization: If the claim was denied due to lack of authorization, verify if the services rendered were authorized under the capitation agreement. If not, discuss with the insurance company to understand the process for obtaining authorization or if there are any exceptions that can be made.
3. Correct Billing Errors: If the denial was due to incorrect billing, review your billing practices to ensure that you are accurately identifying services covered under the capitation agreement. Make any necessary adjustments to your billing system to prevent future denials.
4. Renew or Negotiate Agreement: If the capitation agreement or managed care plan has expired, contact the insurance company to discuss renewal or negotiation options. It may be necessary to update the agreement to include additional services or make changes to the payment structure.
5. Appeal the Denial: If you believe the denial was in error, gather any supporting documentation and submit an appeal to the insurance company. Provide evidence that the services rendered were covered under the capitation agreement and address any misunderstandings or discrepancies.

4. How To Avoid It

To avoid denial code 24 in the future, consider the following steps:

1. Understand Capitation Agreement: Familiarize yourself with the details of the capitation agreement or managed care plan. Know which services are covered and the limitations or exclusions.
2. Verify Authorization: Before providing services, ensure that the services are authorized under the capitation agreement. If not, discuss with the insurance company to obtain proper authorization or explore alternative options.
3. Accurate Billing: Implement accurate billing practices to correctly identify services covered under the capitation agreement. Train your billing staff to ensure they are aware of the specific services and any billing requirements.
4. Monitor Agreement Expiration: Keep track of the expiration date of the capitation agreement or managed care plan. Initiate renewal or negotiation discussions with the insurance company well in advance to avoid any gaps in coverage.

5. Example Cases

Below are two examples of denial code 24:

• Example 1: A healthcare provider submits a claim for a covered service under a capitation agreement. The claim is denied under denial code 24 because the charges are already covered under the agreement, and no additional payment is due.
• Example 2: A provider mistakenly bills for a service that is not covered under the capitation agreement. The claim is denied under denial code 24, as the service was not authorized and falls outside the scope of the agreement.

Source: Claim Adjustment Reason Codes