How To Fix Denial Code 254 | Common Reasons, Next Steps & How To Avoid It

Denial Code 254 means that a claim has been received by the dental plan, but benefits are not available under this plan. In this article, we will provide a description of denial code 254, 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 254 cases.

2. Description

Denial Code 254 is a claim adjustment reason code (CARC) that indicates the dental plan has received the claim, but the services billed are not covered under the patient’s dental plan. This means that the insurance company will not make payment for the services rendered. The provider should consider submitting these services to the patient’s medical plan for further consideration.

2. Common Reasons

The most common reasons for denial code 254 are:

1. Service Not Covered: Denial code 254 occurs when the specific service or procedure is not covered under the patient’s dental plan. This could be due to limitations or exclusions outlined in the plan’s coverage policy.
2. Out-of-Network Provider: If the provider is not in-network with the patient’s dental plan, the services rendered may not be covered. Patients should be aware of their plan’s network requirements to avoid denials under code 254.
3. Missing Preauthorization: Some dental plans require preauthorization for certain procedures or services. If the provider fails to obtain the necessary preauthorization, the claim may be denied under code 254.
4. Benefit Limitations: Dental plans often have limitations on the frequency or number of times certain services can be performed within a specific time period. If the patient has exceeded these limitations, the claim may be denied.
5. Non-Covered Services: Certain dental plans may exclude coverage for specific services or procedures altogether. If the service falls into this category, the claim will be denied under code 254.

3. Next Steps

If you receive a denial under code 254, here are the next steps to resolve the issue:

1. Review Plan Coverage: Carefully review the patient’s dental plan coverage to determine if the service or procedure in question is indeed not covered. Check for any limitations, exclusions, or requirements that may have led to the denial.
2. Submit to Medical Plan: If the service may be covered under the patient’s medical plan, submit the claim to the medical plan for further consideration. Ensure that all necessary documentation and supporting information are included with the claim.
3. Appeal the Denial: If you believe the denial was made in error or if there are extenuating circumstances, consider appealing the denial. Provide any additional documentation or evidence that supports the medical necessity or appropriateness of the service.
4. Communicate with the Patient: Keep the patient informed about the denial and the steps being taken to resolve it. Discuss alternative options, such as seeking coverage through their medical plan or exploring other payment arrangements.
5. Follow Up with the Dental Plan: Contact the dental plan’s provider support to discuss the denial and seek clarification if needed. Understand the specific reasons for the denial and work towards a resolution.

4. How To Avoid It

To avoid denial code 254 in the future, consider the following tips:

1. Verify Coverage: Before providing any services, verify the patient’s dental plan coverage. Confirm if the specific service or procedure is covered and if any preauthorization is required.
2. Stay In-Network: If possible, be an in-network provider for the patient’s dental plan. This helps ensure that the services rendered will be covered under the plan.
3. Obtain Preauthorization: If the dental plan requires preauthorization for certain procedures, make sure to obtain it before providing the service. Failure to do so may result in a denial under code 254.
4. Review Plan Limitations: Familiarize yourself with the limitations and exclusions of the patient’s dental plan. Be aware of any frequency or quantity limitations for specific services.
5. Educate Patients: Clearly communicate the coverage details and limitations of the patient’s dental plan. Help them understand what services are covered and what may require additional steps or out-of-pocket expenses.

5. Example Cases

Here are two examples of denial code 254:

• Example 1: A patient undergoes a cosmetic dental procedure that is not covered under their dental plan. The claim is denied under code 254, indicating that benefits are not available for this service.
• Example 2: A provider fails to obtain preauthorization for a major dental procedure. The claim is subsequently denied under code 254, as the dental plan requires preauthorization for this particular service.

Source: Claim Adjustment Reason Codes