Denial Code 274 (CARC) means that a claim has been denied because the fee or service is not payable per the patient’s Care Coordination arrangement. Below you can find the description, common reasons for denial code 274, next steps, how to avoid it, and examples.
2. Description
Denial Code 274 is a Claim Adjustment Reason Code (CARC) and is described as ‘Fee/Service not payable per patient Care Coordination arrangement’. This denial code indicates that the insurance company will not make payment for the billed fee or service because it is not covered under the patient’s Care Coordination arrangement. This means that the specific fee or service is not included in the agreed-upon care plan between the patient, healthcare provider, and insurance company.
2. Common Reasons
The most common reasons for denial code 274 are:
- Lack of Prior Authorization: In some cases, certain fees or services may require prior authorization from the insurance company. If the healthcare provider did not obtain the necessary authorization before providing the service, the claim may be denied under code 274.
- Out-of-Network Providers: If the patient’s Care Coordination arrangement only covers services provided by in-network providers, claims submitted by out-of-network providers may be denied under code 274.
- Excluded Services: Some Care Coordination arrangements may have specific exclusions for certain fees or services. If the billed fee or service falls under these exclusions, the claim may be denied under code 274.
- Non-Covered Services: Similar to excluded services, there may be certain fees or services that are not covered at all under the patient’s Care Coordination arrangement. Claims for these non-covered services will be denied under code 274.
- Incorrect Coding: If the fee or service is coded incorrectly on the claim, it may not align with the patient’s Care Coordination arrangement. This can result in a denial under code 274.
3. Next Steps
You can address denial code 274 as follows:
- Review Care Coordination Arrangement: First, review the patient’s Care Coordination arrangement to understand the specific terms and coverage limitations. Determine if the billed fee or service is indeed not payable according to the arrangement.
- Prior Authorization: If the denial is due to lack of prior authorization, work with the insurance company to obtain the necessary authorization retroactively. Provide any supporting documentation or justifications for why the service was not authorized in advance.
- Appeal the Denial: If you believe the denial is incorrect or unjustified, file an appeal with the insurance company. Include any relevant documentation, such as the patient’s Care Coordination arrangement, to support your case. Follow the insurance company’s appeal process and provide any additional information they may require.
- Coordinate with In-Network Providers: If the denial is due to the use of an out-of-network provider, consider referring the patient to an in-network provider for the specific fee or service. This will ensure that future claims are not denied under code 274.
- Correct Coding Errors: If the denial is due to coding errors, review the claim and make any necessary corrections. Ensure that the fee or service is coded accurately and aligns with the patient’s Care Coordination arrangement.
4. How To Avoid It
To avoid denial code 274 in the future, consider the following steps:
- Verify Coverage: Before providing any fee or service, verify the patient’s Care Coordination arrangement and ensure that the specific fee or service is covered. Check for any limitations, exclusions, or requirements, such as prior authorization.
- Obtain Prior Authorization: If a fee or service requires prior authorization, make sure to obtain it before providing the service. Follow the insurance company’s process for obtaining authorization and keep documentation of the approval.
- Use In-Network Providers: Whenever possible, refer patients to in-network providers to ensure that the fees or services provided are covered under their Care Coordination arrangement. This will minimize the risk of denials under code 274.
- Accurate Coding: Ensure that all fees and services are coded accurately on the claim. Use the appropriate codes that align with the patient’s Care Coordination arrangement to avoid coding-related denials.
5. Example Cases
Below are two examples of denial code 274:
- Example 1: A healthcare provider submits a claim for a specialized procedure that requires prior authorization. However, the provider did not obtain the necessary authorization before performing the procedure. As a result, the claim is denied under code 274.
- Example 2: A patient seeks treatment from an out-of-network specialist for a specific service. However, the patient’s Care Coordination arrangement only covers services provided by in-network providers. The claim for the out-of-network service is denied under code 274.
