How To Fix Denial Code 96 | Common Reasons, Next Steps & How To Avoid It

Denial Code 96 means that a claim has been denied because the charge(s) are not covered by the insurance policy. In this article, we will provide a description of denial code 96, 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 96 cases.

2. Description

Denial Code 96 is a claim adjustment reason code (CARC) that indicates a non-covered charge(s) by the insurance policy. This means that the insurance company will not make payment for the specific service(s) or item(s) listed in the claim. Denial code 96 requires at least one remark code to be provided, which can be either the NCPDP Reject Reason Code or a Remittance Advice Remark Code that is not an ALERT. To obtain more detailed information about the denial, refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

2. Common Reasons

The most common reasons for denial code 96 are:

1. Service Not Covered: Denial code 96 often occurs when the specific service or item listed in the claim is not covered by the patient’s insurance policy. This could be due to policy exclusions, limitations, or the service being deemed medically unnecessary.
2. Missing or Incomplete Documentation: Insufficient or missing documentation to support the medical necessity of the service can result in denial code 96. Insurance companies require proper documentation to determine coverage eligibility.
3. Expired or Inactive Insurance Policy: If the patient’s insurance policy has expired or is no longer active at the time the claim is submitted, denial code 96 may be issued. It is crucial to verify the patient’s insurance coverage before providing services.
4. Out-of-Network Provider: Denial code 96 can occur when the patient seeks services from an out-of-network provider, and their insurance policy does not provide coverage for such providers. It is essential to confirm network participation before rendering services.
5. Pre-authorization or Referral Requirement: Some insurance policies require pre-authorization or referrals for certain services. Failure to obtain the necessary pre-authorization or referral can result in denial code 96.

3. Next Steps

To resolve denial code 96, follow these next steps:

1. Review the Denial Explanation: Carefully review the explanation provided with the denial code to understand the specific reason for the non-coverage.
2. Verify Coverage and Policy Details: Confirm the patient’s insurance coverage and policy details to ensure accuracy. Check for any policy exclusions, limitations, or requirements for pre-authorization or referrals.
3. Appeal the Denial: If you believe the denial was issued in error or have additional documentation to support the medical necessity of the service, consider filing an appeal. Follow the insurance company’s appeal process and provide all necessary supporting documentation.
4. Communicate with the Patient: Inform the patient about the denial and discuss any potential financial responsibility they may have for the non-covered charge(s). Explore alternative payment options or work out a payment plan if needed.
5. Update Billing Practices: Take steps to prevent future denials by ensuring accurate and complete documentation, verifying coverage before providing services, obtaining necessary pre-authorization or referrals, and staying updated on policy changes.

4. How To Avoid It

To avoid denial code 96 in the future, consider the following tips:

1. Verify Coverage and Eligibility: Before providing services, verify the patient’s insurance coverage and eligibility. Confirm that the specific service or item is covered under their policy.
2. Obtain Pre-authorization or Referrals: If required by the insurance policy, ensure that you obtain the necessary pre-authorization or referrals before providing services. Failure to do so may result in denial code 96.
3. Document Medical Necessity: Maintain accurate and complete documentation to support the medical necessity of the services provided. Include relevant clinical information, test results, and any other supporting documentation.
4. Stay In-Network: If possible, ensure that you are an in-network provider for the patient’s insurance plan. This helps avoid denials related to out-of-network services.
5. Stay Updated on Policy Changes: Regularly review and stay informed about changes in insurance policies, coverage limitations, and requirements. This will help you adapt your billing practices accordingly.

5. Example Cases

Here are two examples of denial code 96:

• Example 1: A patient submits a claim for a cosmetic procedure that is not covered by their insurance policy. The claim is denied under denial code 96, indicating that the charge for the cosmetic procedure is non-covered.
• Example 2: A provider fails to obtain the required pre-authorization for a specialized imaging test. The claim is subsequently denied under denial code 96, as the service was not pre-authorized as per the insurance policy requirements.

Source: Claim Adjustment Reason Codes