Denial Code 74 (CARC) means that a claim has been denied due to an Indirect Medical Education Adjustment. Below you can find the description, common reasons for denial code 74, next steps, how to avoid it, and examples.
2. Description
Denial Code 74 is a Claim Adjustment Reason Code (CARC) that indicates an Indirect Medical Education Adjustment. This means that the insurance company has made a reduction in payment for the billed service due to the provider’s participation in an indirect medical education program. The adjustment is made to account for the additional costs associated with training medical professionals in teaching hospitals or other educational settings.
2. Common Reasons
The most common reasons for denial code 74 are:
- Participation in Indirect Medical Education Programs: Providers who participate in teaching hospitals or other educational settings may be subject to an Indirect Medical Education Adjustment. This adjustment is made to account for the additional costs associated with training medical professionals, such as faculty salaries, administrative expenses, and the provision of educational resources.
- Lack of Documentation: Insufficient or incomplete documentation supporting the provider’s participation in an indirect medical education program can lead to denials under Code 74. It is essential for providers to maintain accurate records and be able to demonstrate their involvement in these programs when submitting claims.
- Incorrect Coding: Claims may be denied under Code 74 if the services provided are not properly coded to indicate the provider’s participation in an indirect medical education program. It is crucial for providers to use the appropriate codes and modifiers to ensure accurate billing and reimbursement.
- Policy Limitations: Some insurance policies may have limitations or exclusions regarding the reimbursement of services provided by providers participating in indirect medical education programs. Providers should review their contracts and agreements with insurance companies to understand any potential limitations or restrictions that may apply.
3. Next Steps
You can address denial code 74 as follows:
- Review Documentation: First, review the documentation related to the provider’s participation in an indirect medical education program. Ensure that all necessary records are in order and accurately reflect the provider’s involvement in these programs.
- Appeal the Denial: If the denial is based on insufficient or incomplete documentation, prepare an appeal that includes the necessary supporting documentation. Clearly explain the provider’s participation in the program and provide any additional information that may be required to demonstrate eligibility for reimbursement.
- Correct Coding Errors: If the denial is due to coding errors, review the claim and identify any incorrect codes or modifiers. Make the necessary corrections and resubmit the claim with the accurate coding information.
- Communicate with Insurance: If there are policy limitations or restrictions that may have led to the denial, contact the insurance company to discuss the denial and seek clarification. Understand the specific requirements or criteria for reimbursement and work with the insurance company to address any issues or concerns.
- Update Billing Practices: Based on the outcome of the denial, update billing practices to ensure accurate coding and documentation for services provided by providers participating in indirect medical education programs. Train staff on the proper use of codes and modifiers and implement processes to ensure compliance with insurance policies and requirements.
4. How To Avoid It
To avoid denial code 74 in the future, consider the following:
- Documentation and Record-Keeping: Maintain accurate and complete documentation of the provider’s participation in indirect medical education programs. This includes records of faculty appointments, teaching responsibilities, and any other relevant information that demonstrates the provider’s involvement in these programs.
- Proper Coding: Ensure that services provided by providers participating in indirect medical education programs are properly coded to indicate their involvement. Use the appropriate codes and modifiers as required by insurance policies and guidelines.
- Contract Review: Review contracts and agreements with insurance companies to understand any limitations or exclusions regarding reimbursement for services provided by providers participating in indirect medical education programs. Be aware of any specific requirements or criteria that must be met to ensure proper reimbursement.
- Staff Training: Train billing and administrative staff on the proper use of codes and modifiers for services provided by providers participating in indirect medical education programs. Ensure that staff members are aware of the documentation requirements and understand the importance of accurate coding and billing practices.
5. Example Cases
Below are two examples of denial code 74:
- Example 1: A provider submits a claim for services provided by a physician who is participating in an indirect medical education program. The claim is denied under Code 74 due to insufficient documentation demonstrating the provider’s involvement in the program.
- Example 2: A provider incorrectly codes services provided by a physician participating in an indirect medical education program, resulting in a denial under Code 74. The claim is resubmitted with the correct coding information, and reimbursement is received.
