How To Fix Denial Code 54 | Common Reasons, Next Steps & How To Avoid It

Denial Code 54 means that multiple physicians or assistants involved in a medical case are not covered. This denial code indicates that the insurance company will not make payment for the services rendered by these additional healthcare providers. In this article, we will provide a description of denial code 54, 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 54 cases.

2. Description

Denial Code 54 is a claim adjustment reason code (CARC) that signifies that multiple physicians or assistants involved in a medical case are not covered by the insurance policy. This means that the insurance company will not reimburse the healthcare provider for the services provided by these additional healthcare professionals. Denial code 54 is typically referenced in the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF) if present.

2. Common Reasons

The most common reasons for denial code 54 are:

1. Out-of-Network Providers: Denial code 54 may occur when the additional physicians or assistants involved in the medical case are not part of the patient’s insurance network. Insurance plans often have specific networks of healthcare providers, and services rendered by out-of-network providers may not be covered.
2. Lack of Prior Authorization: Some insurance policies require prior authorization for certain medical procedures or services. If the additional physicians or assistants involved in the case did not receive prior authorization, the claim may be denied under code 54.
3. Exceeding Coverage Limits: Insurance policies may have limitations on the number of physicians or assistants covered for a particular medical case. If the number of providers involved exceeds the coverage limits, the claim may be denied under denial code 54.
4. Missing or Inaccurate Information: Denial code 54 may occur if there are missing or inaccurate details in the claim submission, such as incorrect provider identification numbers or incomplete information about the additional physicians or assistants involved in the case.

3. Next Steps

To resolve denial code 54, follow these next steps:

1. Review Insurance Policy: Carefully review the patient’s insurance policy to determine if the additional physicians or assistants involved in the case are covered. Check for any specific requirements or limitations regarding coverage for multiple providers.
2. Verify Network Participation: Confirm if the additional physicians or assistants are part of the patient’s insurance network. If they are not, consider discussing alternative options with the patient or seeking prior authorization for out-of-network coverage.
3. Check Prior Authorization: If prior authorization is required for the services provided by the additional physicians or assistants, verify if it was obtained before submitting the claim. If not, consider appealing the denial by providing documentation supporting the medical necessity of the services.
4. Correct Information: Ensure that all information related to the additional physicians or assistants involved in the case is accurate and complete. Double-check provider identification numbers, names, and any other relevant details to avoid any potential denials due to missing or incorrect information.
5. Appeal the Denial: If the denial was issued in error or if there are valid reasons to challenge the denial, prepare a thorough appeal with supporting documentation. This may include evidence of network participation, prior authorization, or any other relevant information that demonstrates the medical necessity and appropriateness of the services provided by the additional providers.

4. How To Avoid It

To prevent denial code 54 in the future, consider the following tips:

1. Verify Coverage: Before involving multiple physicians or assistants in a medical case, verify their coverage under the patient’s insurance policy. Ensure that all providers are part of the insurance network or have appropriate out-of-network coverage.
2. Obtain Prior Authorization: If the insurance policy requires prior authorization for certain services, make sure to obtain it before proceeding with the treatment. This will help avoid denials related to lack of authorization.
3. Understand Coverage Limits: Familiarize yourself with the coverage limits specified in the insurance policy. Be aware of any restrictions on the number of providers covered for a particular case to avoid exceeding the limits.
4. Accurate Documentation: Maintain accurate and complete documentation of all providers involved in the case. Ensure that their information is correctly recorded in the patient’s medical records and claim submissions.
5. Stay Updated: Regularly review and stay updated on the patient’s insurance policy and any changes or updates to coverage requirements. This will help ensure compliance with the insurance company’s guidelines and minimize the risk of denials.

5. Example Cases

Here are two examples of denial code 54:

• Example 1: A patient undergoes a complex surgical procedure that requires the involvement of multiple surgeons and assistants. However, the patient’s insurance policy only covers the services of one surgeon and one assistant. As a result, the claim for the additional providers is denied under code 54.
• Example 2: A healthcare provider submits a claim for a medical case involving multiple physicians, but fails to obtain prior authorization as required by the insurance policy. The claim is subsequently denied under denial code 54 due to the lack of prior authorization.

Source: Claim Adjustment Reason Codes