How To Fix Denial Code 70 | Common Reasons, Next Steps & How To Avoid It

Denial Code 70 (CARC) means that a claim has been denied due to being a cost outlier. In this article, we will provide a description of denial code 70, 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 70 cases.

2. Description

Denial Code 70 is a Claim Adjustment Reason Code (CARC) that indicates an adjustment made to compensate for additional costs. This denial typically occurs when the billed amount for a service or procedure is significantly higher than the average cost for that particular service within a specific geographic area or healthcare facility. Insurance companies use denial code 70 to limit excessive reimbursement and ensure fair and reasonable payments.

2. Common Reasons

The most common reasons for denial code 70 are:

1. Unusual or Complex Cases: Denial code 70 often arises when a healthcare provider submits a claim for a service or procedure that involves unique circumstances or complex medical conditions. These cases may require additional resources, specialized equipment, or extended treatment, resulting in higher costs compared to standard procedures.
2. Out-of-Network Providers: When patients seek care from out-of-network providers, denial code 70 may be triggered. Out-of-network providers may charge higher fees for their services, exceeding the average cost for the same procedure within the patient’s insurance network.
3. High-Cost Treatments: Certain medical treatments, such as organ transplants or advanced surgical procedures, can be extremely expensive due to the complexity and specialized resources involved. Claims for these high-cost treatments may be denied under code 70 if the billed amount exceeds the average cost for such procedures.
4. Geographic Variations: Denial code 70 can also be influenced by geographic variations in healthcare costs. Different regions may have varying average costs for specific services, and claims that exceed these regional averages may be subject to denial.
5. Inadequate Documentation: Insufficient or incomplete documentation supporting the need for additional costs can lead to denial code 70. Clear and comprehensive documentation is crucial to justify the higher expenses associated with a particular service or procedure.

3. Next Steps

To address denial code 70, follow these next steps:

1. Review the Claim: Carefully review the denied claim to understand the specific reasons for the cost outlier denial. Identify any discrepancies or missing information that may have contributed to the denial.
2. Evaluate Documentation: Assess the documentation provided with the claim to ensure it supports the need for additional costs. If any documentation is lacking or incomplete, gather the necessary information to substantiate the higher expenses associated with the service or procedure.
3. Appeal the Denial: Prepare a comprehensive appeal letter that outlines the reasons why the additional costs are justified. Include any supporting documentation, such as medical records, test results, or expert opinions, to strengthen your case. Submit the appeal to the insurance company within the specified timeframe.
4. Follow Up: Monitor the progress of the appeal and follow up with the insurance company to ensure they have received all the necessary information. Be persistent in advocating for the reimbursement of the additional costs.
5. Consider Negotiation: If the appeal is unsuccessful, consider negotiating with the insurance company to reach a compromise. This may involve discussing alternative payment arrangements or exploring options for cost-sharing.

4. How To Avoid It

To prevent denial code 70 in the future, consider the following strategies:

1. Verify Network Participation: Ensure that healthcare providers are in-network for the patient’s insurance plan. Out-of-network providers often charge higher fees, increasing the likelihood of triggering denial code 70.
2. Research Average Costs: Familiarize yourself with the average costs of services and procedures within your geographic area. This knowledge can help you set appropriate pricing and avoid excessive billing that may lead to denial.
3. Thorough Documentation: Maintain detailed and accurate documentation for all services and procedures. Include comprehensive explanations for any additional costs incurred, such as complex medical conditions or specialized resources required.
4. Preauthorization: Obtain preauthorization from the insurance company for high-cost treatments or procedures. This ensures that the insurer is aware of the expected expenses and reduces the likelihood of denial code 70.
5. Stay Updated: Stay informed about changes in insurance policies, reimbursement guidelines, and regional variations in healthcare costs. Regularly review and update your billing practices to align with the latest requirements.

5. Example Cases

Here are two examples of denial code 70:

• Example 1: A healthcare provider submits a claim for a rare and complex surgical procedure that requires specialized equipment and a highly skilled surgical team. The billed amount exceeds the average cost for similar procedures in the region, resulting in denial code 70.
• Example 2: A patient seeks treatment from an out-of-network specialist for a specific medical condition. The specialist charges significantly higher fees compared to in-network providers, leading to denial code 70 due to the cost outlier.

Source: Claim Adjustment Reason Codes