How To Fix Denial Code 76 | Common Reasons, Next Steps & How To Avoid It

Denial Code 76 (CARC) means that a claim has been denied due to a Disproportionate Share Adjustment. Below you can find the description, common reasons for denial code 76, next steps, how to avoid it, and examples.

2. Description

Denial Code 76 is a Claim Adjustment Reason Code (CARC) and is described as a Disproportionate Share Adjustment. This denial code indicates that the claim has been denied because the provider is not eligible for additional reimbursement due to the disproportionate share of low-income patients they serve. In simpler terms, the denial is based on the provider’s patient population and their eligibility for certain reimbursement programs.

2. Common Reasons

The most common reasons for denial code 76 are:

1. Disproportionate Low-Income Patient Population: Denial code 76 is triggered when a provider serves a higher proportion of low-income patients compared to other providers in the same area. This can result in the denial of additional reimbursement as the provider is already receiving compensation through other programs aimed at supporting the care of low-income individuals.
2. Ineligible for Additional Reimbursement: Providers may be denied under code 76 if they do not meet the eligibility criteria for additional reimbursement programs. These programs are designed to provide financial support to providers who serve a significant number of low-income patients. If the provider does not meet the specific requirements, the claim will be denied.
3. Lack of Documentation: In some cases, denial code 76 may be triggered due to insufficient or incomplete documentation supporting the provider’s eligibility for additional reimbursement. If the necessary documentation is not provided or does not meet the requirements, the claim may be denied.
4. Incorrect Coding or Billing Information: Claims may be denied under code 76 if there are errors in the coding or billing information. Inaccurate reporting of patient demographics or services provided can result in the denial of additional reimbursement.
5. Expired or Inactive Provider Status: If a provider’s status has expired or become inactive, they may be ineligible for additional reimbursement programs. Claims submitted by providers with expired or inactive status will be denied under code 76.

3. Next Steps

You can address denial code 76 as follows:

1. Review Eligibility Criteria: First, review the eligibility criteria for additional reimbursement programs. Ensure that the provider meets all the requirements, including the necessary patient population and documentation.
2. Documentation Review: If the denial was due to lack of documentation, thoroughly review the requirements and gather all the necessary supporting documents. Ensure that the documentation clearly demonstrates the provider’s eligibility for additional reimbursement.
3. Appeal the Denial: If you believe the denial was in error or if there were inaccuracies in the coding or billing information, consider appealing the denial. Provide any additional documentation or clarification that supports the provider’s eligibility for additional reimbursement.
4. Update Provider Status: If the denial was due to an expired or inactive provider status, take the necessary steps to update the provider’s status. This may involve renewing licenses or certifications, updating enrollment information, or contacting the appropriate authorities to reactivate the provider’s status.
5. Improve Documentation Practices: To avoid future denials under code 76, implement robust documentation practices. Ensure that all necessary documentation is collected and maintained accurately to support the provider’s eligibility for additional reimbursement.

4. How To Avoid It

You can prevent denial code 76 in the future by taking the following steps:

1. Understand Eligibility Criteria: Familiarize yourself with the eligibility criteria for additional reimbursement programs. Ensure that the provider meets all the requirements, including patient population thresholds and documentation.
2. Accurate Coding and Billing: Ensure that coding and billing information is accurate and up to date. Use appropriate codes and report patient demographics correctly to avoid triggering denial code 76.
3. Maintain Updated Provider Status: Regularly review and update the provider’s status to ensure that licenses, certifications, and enrollments are current. This will help prevent denials due to expired or inactive provider status.
4. Thorough Documentation: Implement comprehensive documentation practices to support the provider’s eligibility for additional reimbursement. Maintain accurate records of patient demographics, services provided, and any other documentation required by the reimbursement programs.

5. Example Cases

Below are two examples of denial code 76:

• Example 1: A hospital that primarily serves low-income communities submits a claim for reimbursement under an additional reimbursement program. However, the claim is denied under code 76 because the hospital already receives funding through other programs aimed at supporting the care of low-income patients.
• Example 2: A provider submits a claim for additional reimbursement but fails to provide the necessary documentation to demonstrate their eligibility. As a result, the claim is denied under code 76.

Source: Claim Adjustment Reason Codes