Top 5 Reasons Claims Get Denied and How to Prevent Them

Claim denials can disrupt your cash flow and increase administrative burdens. In this blog, Top 5 Reasons Claims Get Denied and How to Prevent Them, we break down the most common causes of denials—from incorrect patient details and expired insurance to missing pre-authorizations and coding errors. Backed by industry data and actionable prevention tips, this guide helps you boost first-pass claim approval rates. Discover how tools like AI, EHR templates, and expert support from Practolytics can cut denials by up to 40% and speed up reimbursements. Whether you’re a solo provider or part of a multi-specialty group, effective billing starts with smart strategies. Don’t let denials slow you down—read on and take control.

5 Common Reasons for Claim Denials and How to Stop Them

In healthcare, dealing with denied claims is like a never-ending game of catch-up. After caring for patients and handling paperwork, a claim rejection from the insurance company can be a real pain.

You’re not the only one facing this issue. Research from the American Medical Association (AMA) shows that about 9 out of 100 medical bills are rejected the first time they’re sent. While that might not seem like a huge number, it adds up to a significant amount of lost money and extra work over time.

1. Incorrect Patient Data

Reason:

A little mistake, like a typo in the patient’s name or insurance number, can cause a big problem. This happens a lot, even when you’re busy checking in patients.

What to do:

• Always make sure to check patient info twice before sending in claims.
• Use tools that check insurance for you at the time of service.
• Teach your front desk to always ask patients to confirm their details.

Fact: Healthcare businesses lose about $17 billion every year because of mistakes in patient info causing claim rejection.

2. No Pre-Approval for Services

Reason:

Some health things need the green light from insurance before you do them. If you don’t get it, the claim might get rejected, even if it’s important.

How to stop it:

• Create a list of things that need insurance approval first.
• Use special software to keep track of these approvals.
• Work with a company like Practolytics that’s really good at getting quick approvals and avoiding delays.

Fact: Almost 25% of claim denials come from not having the right approval from the insurance company on time.

3. Coding Mistakes

Cause:

Using incorrect codes for illnesses or treatments, missing extra details, or not matching services with the right illness codes can cause a claim to be rejected. This often happens in hospitals and doctor’s offices.

Prevention:

• Make sure your coding team learns new code updates often.
• Check coding work every 3 months to find and fix any errors.
• Consider using computer programs or hiring outside experts for more accurate medical coding.

Important: In 2025, CMS added 340 new codes. Knowing these updates is crucial to avoid rejection.

4. Out-of-Date Insurance or Coverage Problems

Cause:

Patients might not know their insurance has changed or expired. If you don’t check their insurance each time they come in, you might bill the wrong company or one that no longer covers them.

Prevention:

• Always verify insurance before every appointment.
• Use a system that warns you about eligibility changes.
• Teach patients to tell you about any insurance plan updates.

Did You Know: MGMA says more than 35% of offices have money trouble due to eligibility issues.

5. Missing or Incomplete Records

Issue:

Insurance companies need solid evidence that the healthcare you gave was truly needed. If your notes are unclear or not all there, your payment request might be refused—even if you did everything correctly.

Solution:

• Ensure that all your notes directly relate to the patient’s condition and support the services you billed for.
• Utilize EHR templates that help you write proper notes.
• Check your work carefully on big-ticket or complicated cases before sending the claim.

Fact: Over 20% of claim denials come from incomplete records, especially in surgery and mental health fields.

Bonus Tip:

Advanced systems with AI are now used by many offices to catch mistakes early. These tools, along with healthcare Revenue Cycle Management services, can help you spot patterns, find risky claims, and correct errors immediately.

Future Advantage in 2025:

Insurers are starting to use predictive denial warnings that inform you of potential problems before they even look at the claim. Use these tools to improve the chances of getting paid the first time.

Final Thoughts: Turn Denials into Dollars with Practolytics

Claim denials are a big problem. They waste your time and cost you money. But Practolytics has a way to help. We have full solutions for handling all your money-making stuff in healthcare. This helps you:

1. Have 40% fewer denied claims.
2. Get your money faster and with fewer mistakes.
3. Let computers handle the hard parts so your people can focus on more important things.
4. Make sure you’re playing by the latest rules for codes and paperwork.

It doesn’t matter if you’re a small doctor’s office or a big group with lots of different doctors, we’ve got you covered. We have the right tools, good people, and lots of experience to help you earn more and worry less about getting paid.

Want to know why claims get denied a lot? Here are the top 5 reasons:

1. Wrong info about the patient: Always make sure it’s right.
2. Didn’t get permission from insurance first: Let a machine do it or hire someone to help.
3. Messed up coding: Learn from experts or get them to do it for you.
4. Insurance that’s not good anymore: Always check before you see the patient.
5. Not writing things down clearly: Keep notes simple and full.

When you take care of these things, your claims get approved more often and your cash comes in faster.

If you need some help with this mess, call us at Practolytics. We’re your trusted friends in the world of hospital medical billing, codes, and making sure you get paid.

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