How To Fix Denial Code 281 | Common Reasons, Next Steps & How To Avoid It
Denial Code 281 means that the deductible has been waived per contractual agreement. This denial code should only be used with Group Code CO. Below you can find the description, common reasons for denial code 281, next steps, how to avoid it, and examples.
2. Description
Denial Code 281 is a specific Claim Adjustment Reason Code (CARC) that indicates the deductible has been waived per contractual agreement. This means that the insurance company has agreed to waive the deductible requirement for the billed service based on the terms of the contract between the provider and the insurer. In simpler terms, the patient is not responsible for paying the deductible amount for the service.
2. Common Reasons
The most common reasons for denial code 281 are:
- Contractual Agreement: Denial code 281 is typically used when there is a specific contractual agreement between the provider and the insurance company that waives the deductible for certain services. This could be a negotiated agreement based on the provider’s participation in a specific network or a specific arrangement for certain types of services.
- Group Code CO: Denial code 281 should only be used with Group Code CO, which indicates that the claim is denied due to contractual obligations. If the claim is not associated with Group Code CO, then denial code 281 should not be used.
3. Next Steps
If you receive denial code 281, you can take the following steps:
- Review Contractual Agreement: First, review the contractual agreement between your practice and the insurance company. Ensure that there is a specific provision that waives the deductible for the billed service. If there is no such provision, contact the insurance company to clarify the situation.
- Verify Group Code CO: Check if the claim is associated with Group Code CO. If it is not, then denial code 281 should not be used. If there is an error in the coding, correct it and resubmit the claim with the appropriate denial code.
- Contact Insurance Company: If you believe that denial code 281 was applied in error, contact the insurance company’s provider support. Discuss the specifics of the claim and provide any necessary documentation to support your case. This can help resolve the denial and ensure that the deductible is appropriately waived.
4. How To Avoid It
To avoid denial code 281 in the future, follow these steps:
- Review Contracts: Regularly review the contracts between your practice and the insurance companies you work with. Ensure that there are specific provisions that waive the deductible for certain services. If there are any discrepancies or missing provisions, contact the insurance company to update the contract.
- Proper Coding: Ensure that the claim is coded correctly and associated with Group Code CO when using denial code 281. Double-check the coding before submitting the claim to avoid any coding errors that could result in denials.
- Documentation: Keep thorough documentation of any contractual agreements that waive the deductible for specific services. This documentation can be useful in case of denials or disputes with the insurance company.
5. Example Cases
Below are two examples of denial code 281:
- Example 1: A provider submits a claim for a preventive screening test that is covered under a specific contractual agreement with the insurance company. The claim is denied with denial code 281, indicating that the deductible has been waived per the agreement.
- Example 2: A provider mistakenly uses denial code 281 for a claim that is not associated with Group Code CO. The claim is denied, and upon review, it is determined that denial code 281 should not have been used. The provider corrects the coding and resubmits the claim with the appropriate denial code.
Source: Claim Adjustment Reason Codes
