Claims rejections occur when the clearinghouse or the payer stop a claim from entering their processing system. This is typically due to missing, incomplete, outdated, or incorrect information included in the claim. When claims fail to enter the payer’s processing system, providers do not receive an explanation of benefits or remittance advice for the rejection. Depending on the processor, providers may or may not receive a rejection notice from the clearinghouse or other electronic system.
When the statuses of claims go unmonitored, rejections can pose an especially problematic effect for providers, their patients and patient’s families. It is not uncommon for providers to wait for a notification to trigger action on unpaid claims, naturally so, in the instance of a rejection that does not include a follow up notice, a significant amount of time may go by before realizing a claim went unreceived. At this point, deadlines for timely filing requirements may have passed for the payer. Unfortunately, timely filing denials are rarely overturned when appealed; therefore, it is very important that as part of a claims review process, providers have a method for monitoring rejections.
As soon as claim submitted, clearing house response with EDI 277CA. The purpose of the 277CA (Claims Acknowledgement) transaction is to provide a claim level acknowledgement of all claims received in the pre-processing system before submitting claims into a payer’s adjudication system.
Common examples of incorrect information that can cause rejections include:
Insurance information
- Incorrect member ID
- Incorrect payer ID
Demographic information
- Incorrect date of birth
- Misspelled name
- Incorrect address
Diagnosis/billing information
- Invalid or outdated ICD code
- Invalid CPT code
- Incorrect modifier or lack of a required modifier
Sample workflow
Provider Smith uses ABC Billing Software aka Practice Management Software (RCM) and he has account with XYZ Clearing house for submitting its claims.
- RCM System every day generates claims electronically (Professional or Institutional or Dental) using X12 EDI 837 and push into clearing house FTP.
- After few min, the clearing house response with EDI 999 Acknowledgement file in their FTP download folder. For this example, we will assume that EDI File is accepted with no errors. If there is syntax error in the EDI 837 File, then no EDI 277CA File will be generated.
- Now clearing house will scrub the claims for validation and response with an EDI 277CA File in their FTP Download folder. The EDI 277CA file will contain either accepted or rejected status for each claim submitted. These are called as claim rejections from the clearing house side.
- All the accepted claims are forwarded to payer. Rejected claims will not be forwarded, provider office must act and resubmit the claims.
- Once claim is received at the payer, then the payer system will scrub the claims for validation. Again, payer will generate EDI 277CA with accepted or rejected claims and forward to the clearing house download folder. If the claims are rejected, then they are called as Payer Level Rejections.
- If there is no error found during payer scrubbing, then all the claims will enter payer’s adjudication system and then payer process the payment.
Sample EDI 277CA Rejected
ISA*00* *00* *01*030240928 *ZZ*AV09999999 *220513*1547*^*00501*332975623*0*P*:
GS*HN*030240928*1101957*20220513*1547*332122998*X*005010X214
ST*277*1001*005010X214
BHT*0085*08*3215872084*20220513*154703*TH
HL*1**20*1
NM1*AY*2*Clearing House LLC*****46*030240928
TRN*1*2022051315470395
DTP*050*D8*20220513
DTP*009*D8*20220513
HL*2*1*21*1
NM1*41*2*XYZ CLINIC*****46*AV09999999
TRN*2*17145
STC*A1:20*20220513*WQ*625
QTY*90*0
QTY*AA*1
AMT*YY*625
HL*3*2*19*1
NM1*85*2*XYZ CLINIC*****XX*2222222222
TRN*1*0
REF*TJ*363290656
QTY*QA*0
QTY*QC*1
AMT*YU*625
AMT*YY*625
HL*4*3*PT
NM1*QC*1*John*Mike****MI*1111111111
TRN*2*FR126904
STC*A3:21*20220513*U*625********ALL PROPERTY AND CASUALTY CLAIMS REQUIRE A DATE OF INJURY.
REF*D9*NA
DTP*472*RD8*20220308-20220308
SE*30*1001
GE*1*332122998
IEA*1*332975623
HTML
Interchange Control Header
| Authorization Qualifier | 00 |
| Security Qualifier | 00 |
| Interchange ID Qualifier Sender | 01 |
| Submitter ID | 030240928 |
| Interchange ID Qualifier Receiver | ZZ |
| Receiver ID | AV09999999 |
| Interchange Date | 05/13/2022 |
| InterChange Time (HHMM) | 15:47 |
| Repetition Seperator | ^ |
| Control Number | 332975623 |
| Acknowledgement Requested | 0 |
| Usage Indicator | P |
Functional Group Header
| Application Sender Code | 030240928 |
| Application Receiver Code | 1101957 |
| Group Transaction Date | 05/13/2022 |
| Group Transaction Time (HHMM) | 15:47 |
| Group Control Number | 332122998 |
| EDI Version | 005010X214 |
Transaction Set Header
| Transaction set | 277 |
| Transaction Control Number | 1001 |
| Transaction Date | 05/13/2022 |
| Transaction Time (HHMM) | 154703 |
Source
| Source Type | 2 |
| Entity Type | 2 |
| Name | Clearing House LLC |
| Identifier Type | 46 |
| Identifier Type Desc | ETIN |
| Identifier value | 030240928 |
| Transaction Trace Number | 2022051315470395 |
| Batch Received Date | 05/13/2022 |
| Batch Processed Date | 05/13/2022 |
Receiver
| Entity Type | 2 |
| Name | XYZ CLINIC |
| Last | XYZ CLINIC |
| Transaction Trace Number | 17145 |
| Accepted Claims | 0 |
| Rejected Claims | 1 |
| Billed Amount | 625 |
| Rejected Amount | 625 |
| Status | 20 |
| Status Description | Accepted for processing. |
| Status Category | A1 |
| Status Category Description | Acknowledgement/Receipt-The claim/encounter has been received. This does not mean that the claim has been accepted for adjudication. |
| Action | WQ - Batch Accepted |
| Status Effective Date | 05/13/2022 |
Billing Provider
| Entity Type | 2 |
| Last or Organization Name | XYZ CLINIC |
| NPI | 2222222222 |
| Accepted Claims | 0 |
| Rejected Claims | 1 |
| Accepted Amount | 625 |
| Rejected Amount | 625 |
Claim Information
| Claim Number | FR126904 |
| Clearing House Trace Number | NA |
| Patient Last Name | John |
| Patient First Name | Mike |
| DB Batch Number | 277CA_1655086607069 |
| DB Claim Number Number | FR1269041655086607070 |
| Status Source | 277CA |
| Status Category | A3 |
| Status Category Description | Acknowledgement/Returned as unprocessable claim-The claim/encounter has been rejected and has not been entered into the adjudication system. |
| Status | 21 |
| Status Description | Missing or invalid information. Usage: At least one other status code is required to identify the missing or invalid information. |
| Action | U - Claim Rejected |
Notes
| ALL PROPERTY AND CASUALTY CLAIMS REQUIRE A DATE OF INJURY. |
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