How To Fix Denial Code 85 | Common Reasons, Next Steps & How To Avoid It

Denial Code 85 (CARC) means that a claim has been denied because the payment of interest is the responsibility of the patient. Below you can find the description, common reasons for denial code 85, next steps, how to avoid it, and examples.

2. Description

Denial Code 85 is a Claim Adjustment Reason Code (CARC) and is described as ‘Patient Interest Adjustment’. This code is used when the payment of interest is the responsibility of the patient. It indicates that the insurance company will not make the payment for the billed service due to the inclusion of interest charges. In simpler terms, the claim is denied because the patient is responsible for paying any interest that has accrued.

2. Common Reasons

The most common reasons for denial code 85 are:

  1. Accrued Interest Charges: Denial code 85 is typically triggered when there are interest charges associated with the billed service. This can occur when a patient fails to make timely payments or when there are outstanding balances that accrue interest over time. Insurance companies may deny the claim and require the patient to pay the interest charges.
  2. Patient Responsibility: Denial code 85 is used to indicate that the payment of interest is the responsibility of the patient. This can happen when the patient’s insurance policy does not cover interest charges or when the patient has reached their maximum coverage limit, leaving them responsible for any additional costs, including interest.
  3. Non-Compliance with Payment Terms: If a patient fails to adhere to the payment terms outlined in their insurance policy or provider agreement, interest charges may be applied. In such cases, denial code 85 may be used to deny the claim and require the patient to pay the interest charges.
  4. Disputed Charges: Denial code 85 can also be used when there is a dispute over the charges billed. If the patient disputes the charges and refuses to pay, interest charges may be added to the outstanding balance. The claim may be denied under code 85, indicating that the patient is responsible for the interest charges.
  5. Out-of-Network Services: In some cases, denial code 85 may be used when a patient receives services from an out-of-network provider. If the patient’s insurance policy does not cover out-of-network services or if the provider does not have a contract with the insurance company, the patient may be responsible for any interest charges that accrue.

3. Next Steps

You can address denial code 85 as follows:

  1. Review Payment Terms: First, review the payment terms outlined in the patient’s insurance policy or provider agreement. Determine if interest charges are applicable and if the patient is responsible for paying them.
  2. Communicate with the Patient: Engage in open communication with the patient to discuss the interest charges and their responsibility for payment. Provide a clear explanation of why the claim was denied under code 85 and inform the patient of the steps they need to take to resolve the issue.
  3. Payment Arrangements: Work with the patient to establish a payment plan for the interest charges. This may involve setting up a schedule for regular payments or exploring alternative payment options, such as financing or assistance programs.
  4. Documentation and Resubmission: If there is a dispute over the interest charges or if the denial was in error, gather any supporting documentation and resubmit the claim with an explanation. This may include proof of payment or evidence that the interest charges were not applicable.
  5. Appeal the Denial: If the denial was unjustified or if there are extenuating circumstances, consider appealing the denial. This may involve providing additional documentation or engaging in further discussions with the insurance company to resolve the issue.
  6. Education and Prevention: Take steps to educate patients about their financial responsibilities, including interest charges. Provide clear information about payment terms, insurance coverage, and potential costs to avoid future denials under code 85.

4. How To Avoid It

You can prevent denial code 85 in the future by taking the following steps:

  1. Review Payment Terms: Before providing services, review the payment terms outlined in the patient’s insurance policy or provider agreement. Ensure that both parties understand the financial responsibilities, including any potential interest charges.
  2. Clear Communication: Clearly communicate with patients about their financial responsibilities, including interest charges. Provide written explanations and obtain signed agreements to ensure that both parties are aware of the terms and conditions.
  3. Timely Payments: Encourage patients to make timely payments to avoid interest charges. Implement clear billing processes and reminders to help patients stay on top of their financial obligations.
  4. Verify Coverage: Verify the patient’s insurance coverage and network status before providing services. If the patient is out-of-network or if their policy does not cover certain services, inform them of the potential financial implications, including interest charges.
  5. Financial Counseling: Offer financial counseling services to patients who may struggle with payment obligations. Provide resources and assistance programs to help patients manage their healthcare costs and avoid interest charges.

5. Example Cases

Below are two examples of denial code 85:

  • Example 1: A patient receives a medical procedure that is not covered by their insurance policy. As a result, the provider adds interest charges to the outstanding balance. The claim is denied under code 85, indicating that the patient is responsible for paying the interest charges.
  • Example 2: A patient disputes the charges for a hospital stay and refuses to pay. The provider adds interest charges to the outstanding balance, and the claim is denied under code 85. The patient is responsible for paying both the disputed charges and the accrued interest.

Source: Claim Adjustment Reason Codes

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