How To Fix Denial Code 245 | Common Reasons, Next Steps & How To Avoid It

Denial Code 245 means that a claim has been denied due to the provider’s performance program withhold. Below you can find the description, common reasons for denial code 245, next steps, how to avoid it, and examples.

2. Description

Denial Code 245 is a Claim Adjustment Reason Code (CARC) that indicates a claim has been denied due to the provider’s performance program withhold. This means that the insurance company has withheld a portion of the payment as part of a performance program agreement with the provider. The withhold is typically based on specific performance metrics or quality measures that the provider must meet in order to receive the full payment for the services rendered.

2. Common Reasons

The most common reasons for denial code 245 are:

1. Failure to Meet Performance Metrics: Providers may face Denial Code 245 if they fail to meet the performance metrics or quality measures outlined in the performance program agreement. This could include metrics related to patient outcomes, adherence to clinical guidelines, or patient satisfaction scores. If the provider does not meet these benchmarks, the insurance company may withhold a portion of the payment.
2. Documentation Errors: Denial Code 245 can also occur if there are documentation errors or omissions in the claim submission. If the provider fails to provide sufficient documentation to support their performance metrics or quality measures, the insurance company may deny the claim and withhold payment.
3. Non-Compliance with Program Requirements: Providers must adhere to the requirements and guidelines set forth by the performance program agreement. If the provider fails to comply with these requirements, such as submitting required reports or participating in program activities, the insurance company may deny the claim and withhold payment.
4. Insufficient Data: In some cases, Denial Code 245 may be triggered if the provider does not have sufficient data to demonstrate their performance or quality measures. This could occur if the provider has not been tracking the necessary data or if there are gaps in the data that prevent a comprehensive evaluation of their performance.
5. Program Exclusions: Certain performance programs may have exclusions or limitations that could result in Denial Code 245. Providers should carefully review the terms and conditions of the program to ensure they meet all eligibility requirements and understand any potential exclusions.

3. Next Steps

You can address denial code 245 as follows:

1. Review Performance Program Agreement: First, review the performance program agreement to understand the specific metrics or quality measures that must be met in order to receive full payment. Identify any areas where the provider may have fallen short and determine the reasons for non-compliance.
2. Identify Documentation Errors: If the denial was due to documentation errors, identify the specific errors or omissions in the claim submission. Ensure that all necessary documentation is included and accurately reflects the provider’s performance or quality measures.
3. Address Non-Compliance: If the denial was due to non-compliance with program requirements, take steps to address the issues and bring the provider back into compliance. This may involve submitting required reports, participating in program activities, or implementing changes to improve performance.
4. Gather Sufficient Data: If the denial was due to insufficient data, work to gather the necessary information to demonstrate the provider’s performance or quality measures. This may involve implementing systems or processes to track the required data or working with relevant stakeholders to obtain the necessary information.
5. Appeal the Denial: If you believe the denial was in error or that the provider has met the performance metrics or quality measures, prepare an appeal to challenge the denial. Provide any additional documentation or evidence to support the provider’s case and demonstrate compliance with the program requirements.
6. Monitor Performance: Going forward, closely monitor the provider’s performance to ensure ongoing compliance with the performance program agreement. Regularly review data and metrics to identify any areas for improvement and take proactive steps to address any issues that may arise.

4. How To Avoid It

To avoid denial code 245 in the future, consider the following:

1. Understand Program Requirements: Thoroughly review the terms and conditions of any performance program agreements before participating. Understand the specific metrics or quality measures that must be met and ensure that the provider has the necessary resources and capabilities to comply.
2. Implement Robust Documentation Processes: Develop and implement robust documentation processes to ensure that all necessary documentation is accurately captured and included in claim submissions. This will help to avoid documentation errors that could lead to denial code 245.
3. Comply with Program Requirements: Ensure that the provider complies with all program requirements, including submitting required reports, participating in program activities, and meeting performance metrics or quality measures. Regularly review program guidelines to stay up to date with any changes or updates.
4. Track and Monitor Data: Implement systems or processes to track and monitor the necessary data to demonstrate compliance with performance metrics or quality measures. Regularly review and analyze the data to identify any areas for improvement and take proactive steps to address any issues.
5. Seek Clarification: If there are any questions or uncertainties regarding program requirements or exclusions, seek clarification from the insurance company or program administrators. This will help to ensure that the provider has a clear understanding of the expectations and can take appropriate actions to meet them.

5. Example Cases

Below are two examples of denial code 245:

• Example 1: A healthcare provider participates in a performance program that requires them to achieve a certain patient satisfaction score. However, the provider’s patient satisfaction scores fall below the required threshold, resulting in denial code 245 and a withhold of a portion of the payment.
• Example 2: A provider submits a claim for reimbursement under a performance program but fails to include the necessary documentation to support their compliance with the program requirements. As a result, the claim is denied under code 245, and the payment is withheld.

Source: Claim Adjustment Reason Codes