How To Fix Denial Code 257 | Common Reasons, Next Steps & How To Avoid It

Denial Code 257 means that the disposition of the claim/service is undetermined during the premium payment grace period, as per Health Insurance Exchange requirements. This denial code is used when the claim/service will be reversed and corrected once the grace period ends, either due to premium payment or lack of premium payment. Denial Code 257 is typically used with Group Code OA.

2. Description

Denial Code 257 is specific to situations where the disposition of the claim/service is uncertain during the premium payment grace period. This code is used to indicate that the claim/service will be reversed and corrected once the grace period ends, which can occur due to either the payment of the premium or the lack of premium payment. It is important to note that Denial Code 257 is only applicable after the first month of the grace period.

2. Common Reasons

The most common reasons for Denial Code 257 are:

1. Grace Period Non-Payment: One of the main reasons for Denial Code 257 is when the premium payment is not made within the grace period. Health Insurance Exchanges typically provide a grace period for individuals to make their premium payments. If the payment is not received within this period, the claim/service will be denied under Denial Code 257.
2. Uncertainty during Grace Period: Denial Code 257 may also be used when there is uncertainty regarding the disposition of the claim/service during the grace period. This can occur when there are delays or issues with premium payment processing, resulting in the claim/service being held in a state of undetermined status.
3. Incorrect Premium Payment: Another reason for Denial Code 257 is when there are errors or discrepancies in the premium payment. This can include situations where the payment amount is incorrect, the payment method is invalid, or there are issues with the payment processing system.

3. Next Steps

If you receive a denial with Code 257, here are the next steps to take:

1. Verify Grace Period Status: First, confirm the status of the grace period for the specific claim/service. Determine if the premium payment has been made within the grace period or if there are any issues with the payment processing.
2. Contact Insurance Provider: If there are any uncertainties or discrepancies regarding the grace period or premium payment, reach out to the insurance provider for clarification. Discuss the specific claim/service and inquire about the necessary steps to resolve the denial.
3. Resolve Premium Payment Issues: If the denial is due to non-payment or incorrect premium payment, work with the insurance provider to address the payment issues. This may involve making the outstanding payment, correcting any errors in the payment amount or method, or resolving any technical issues with the payment processing system.
4. Refile the Claim/Service: Once the premium payment issues have been resolved, refile the claim/service with the corrected information. Ensure that all necessary documentation and supporting details are included to facilitate a successful resubmission.

4. How To Avoid It

To avoid Denial Code 257 in the future, consider the following steps:

1. Timely Premium Payments: Make sure to submit premium payments within the designated grace period to avoid denials due to non-payment. Set reminders or establish automatic payment systems to ensure timely premium payments.
2. Double-Check Payment Details: Before submitting premium payments, double-check all payment details, including the payment amount and method. Ensure that the information provided is accurate to prevent denials caused by incorrect payment information.
3. Communicate with Insurance Provider: Maintain open communication with the insurance provider regarding premium payments and any potential issues. Stay informed about the grace period requirements and any changes in payment processes.

5. Example Cases

Here are two examples of Denial Code 257:

• Example 1: A policyholder fails to make the premium payment within the grace period. As a result, a claim for a medical service is denied under Denial Code 257 until the premium payment is received.
• Example 2: Due to a technical issue with the insurance provider’s payment processing system, the premium payment for a policy is not successfully processed within the grace period. Consequently, a claim for a healthcare service is denied under Denial Code 257 until the payment issue is resolved.

Source: Claim Adjustment Reason Codes