How To Fix Denial Code 26 | Common Reasons, Next Steps & How To Avoid It

Denial Code 26 means that a claim has been denied because the expenses were incurred prior to coverage. Below you can find the description, common reasons for denial code 26, next steps, how to avoid it, and examples.

2. Description

Denial Code 26 is a Claim Adjustment Reason Code (CARC) and is described as ‘Expenses incurred prior to coverage’. This denial code indicates that the insurance company will not make the payment for the billed service because the expenses were incurred before the patient’s coverage became effective. In simpler terms, the claim is not payable because the services were received before the insurance policy was active.

2. Common Reasons

The most common reasons for denial code 26 are:

1. Late Enrollment: Denial code 26 often occurs when a patient seeks medical services before their insurance coverage becomes effective. This can happen if the patient fails to enroll in the insurance plan in a timely manner or if there is a delay in the activation of the policy.
2. Effective Date Misunderstanding: Sometimes, patients may misunderstand or misinterpret the effective date of their insurance coverage. They may assume that their coverage is active when it has not yet begun, leading to denials under code 26.
3. Waiting Periods: Certain insurance plans have waiting periods before coverage becomes effective. If a patient seeks medical services during this waiting period, the claim may be denied under code 26.
4. Terminated Coverage: Denial code 26 can also occur if a patient receives medical services after their insurance coverage has been terminated or canceled. In such cases, the claim will be denied as the expenses were incurred when the policy was no longer active.
5. Incorrect Effective Date: Errors in the insurance company’s records or administrative mistakes can result in denials under code 26. If the effective date of the policy is incorrectly recorded, it may lead to claims being denied for services received before the actual coverage start date.

3. Next Steps

You can fix denial code 26 as follows:

1. Verify Coverage Start Date: First, verify the patient’s coverage start date with the insurance company. Ensure that the services were received after the policy became active. If there is a discrepancy, provide the correct information to the insurance company to rectify the denial.
2. Communicate with the Patient: If the denial is due to late enrollment or misunderstanding of the effective date, communicate with the patient to explain the situation. Inform them that the services were received before their coverage became active and discuss alternative payment options.
3. Appeal the Denial: If you believe that the denial was in error or due to administrative mistakes, prepare an appeal. Gather any supporting documentation, such as enrollment records or correspondence with the insurance company, to demonstrate that the services were received after the coverage start date. Submit the appeal to the insurance company for reconsideration.
4. Offer Payment Plans: If the denial is upheld and the patient is responsible for the expenses incurred prior to coverage, work with them to establish a payment plan. This can help alleviate the financial burden and ensure that the outstanding balance is paid in a manageable manner.
5. Update Administrative Processes: Review your administrative processes to ensure accurate recording of coverage start dates. Double-check the information provided by patients and verify it with the insurance company to avoid future denials under code 26.

4. How To Avoid It

You can prevent denial code 26 in the future as follows:

1. Education and Communication: Educate patients about the importance of enrolling in insurance plans in a timely manner and understanding the effective date of their coverage. Clear communication can help avoid denials due to late enrollment or misunderstanding of coverage start dates.
2. Verification of Coverage: Before providing any services, verify the patient’s insurance coverage and confirm the effective date. Ensure that the services are received after the coverage becomes active to prevent denials under code 26.
3. Review Insurance Policies: Familiarize yourself with the insurance policies you work with and understand any waiting periods or specific requirements for coverage to become effective. This knowledge will help you schedule services appropriately and avoid denials.
4. Double-Check Administrative Data: Pay close attention to the accuracy of administrative data, including coverage start dates. Verify the information provided by patients and cross-reference it with the insurance company’s records to avoid errors that may lead to denials under code 26.

5. Example Cases

Below are two examples of denial code 26:

• Example 1: A patient visits a healthcare provider for a medical procedure before their insurance coverage becomes effective. The claim is denied under code 26 as the expenses were incurred prior to coverage.
• Example 2: An administrative error results in the insurance company recording an incorrect effective date for a patient’s coverage. The patient receives medical services after the recorded effective date, but the claim is denied under code 26 due to the discrepancy.

Source: Claim Adjustment Reason Codes