Providing healthcare services in the United States is challenging. But do you know what is more complex? The answer is insurance claims. Both healthcare practices and insurance companies face substantial financial losses just because of payment delays and denials. In fact, in 2022, providers spent nearly $20 billion pursuing delays and denials across all payer types.
The CO 22 denial code is the most common in the healthcare industry. It also causes payment conflicts between hospitals and insurance companies.
In this blog, we will provide a detailed description of the CO 22 denial code, its common causes, some preventive measures, and resolution steps in case you have to face one. So, let’s start.
CO 22 Denial Code Description
Do you know that more than 43 million people have more than one insurance plan? This is the main reason behind the CO 22 denial code.
Denial code 22 indicates that another insurance company may cover the healthcare service for which the claim was submitted. The Coordination of Benefits (COB) typically defines this.
In other words, code 22 indicates that the claim was submitted to the wrong insurance payer. Solving this issue can be a headache for both parties.
This usually happens when a medical biller or coder sends the claim directly to the secondary insurance payer without first processing it by the patient’s primary insurance company.
Simply put, the insurance company denies paying the healthcare provider. The company claims that, according to its policy, another insurer will pay the costs.
What does Coordination of Benefits mean?
You might be confused by the term “Coordination of Benefits” used in the section above. Let’s break it down so you can understand it.
Coordination of Benefits, or COB, is a standard procedure or set of rules that decides how the insurance companies will pay or divide the payment. COB sets the order in which multiple insurance payers will pay for a patient’s medical expenses.
This system ensures that the first or primary insurance company pays its dues first, as defined in the patients’ coverage policy. After that, if some amount is left, the secondary insurer takes care of it. Companies use COB for:
- Avoidance of overpayment by insurers.
- Proper allocation of financial responsibility among insurers.
- Clear payment structures for patients with multiple coverages.
Let’s look at an example to make things clearer.
If a patient had surgery that cost $15,000, according to the COB, the primary insurer may reimburse $10,000. This leaves $5,000 in dues, which the secondary insurance provider will cover. Now, if a healthcare provider submits the claim directly to the secondary provider by mistake, the secondary insurer will likely send a CO 22 denial code and reject the reimbursement request.
What Causes the CO 22 Denial Code?
Before we move on to prevention and resolution techniques for the CO 22 denial code, it is essential to understand its causes. Here are the main reasons this denial occurs:
COB Confusion
As we discussed above, the first reason for the denial code 22 is confusion in coordinating benefits. This happens when a patient has multiple insurance companies.
Incomplete or Incorrect Patient Information
You will most likely receive a denial code if you provide incorrect or incomplete patient information in your claim form. However, this reason is not specific to code 22, and you may sometimes receive other denial codes as well.
This incomplete or incorrect information can include minute details like a misspelled name, wrong date of birth, or invalid policy number. This might not be a significant mistake for you. Still, insurance companies heavily rely on this information for proper claims processing and reimbursement.
Lack of Prior Authorization
This point is vital for healthcare providers, as many of them make this mistake. Certain medical services or procedures may require prior approval from the insurer. So, it is essential to obtain it.
If you fail to obtain this authorization before performing the procedure, your claim will most likely be denied with a CO 22.
Missing EOB/ERA Documents
The Explanation of Benefits (EOB) and Electronic Remittance Advice (ERA) are essential documents for timely reimbursement. They tell the patient and the healthcare provider about the services and amount covered by the insurance payer. The primary insurance company usually provides these documents.
Suppose you fail to attach the EOB or ERA when submitting the claim to the secondary insurer. In that case, your claim is likely to be denied.
Late Claim Submission
This might be shocking for you, but in 2022 alone, about $10.6 billion was wasted arguing over claims that should have been paid at the time of submission.
This is because insurance companies enforce strict timelines for claim submission. Delays in filing claims, especially to secondary insurers, often result in denials.
Expired or Terminated Insurance Coverage
Another cause of denial code 22 is expired insurance coverage. This happens more frequently than you think.
How To Prevent Denial Code CO 22?
Let’s now go through some preventive measures that you can take to avoid denial code 22.
Verify Insurance Coverage at Every Visit
The first thing you can do is to check and verify patients’ insurance coverage details every time. You have to do it every time a patient visits the hospital. Train your staff to note the following information:
- Active policies
- Primary and secondary payers
- Updated COB details
Collect Accurate Patient Information
You cannot verify the insurance details properly if you don’t get accurate information in the first place. That is why it’s crucial to double-check critical information. Tell your employees to always cross-check names, dates of birth, and policy numbers against insurance records. This will help you prevent denials.
Understand COB Rules
It’s also essential to hire trained medical billing and coding staff. If your team does not have the necessary knowledge, invest in them and help them get medical billing and coding certifications. Ensure they understand all the details of COB, the hierarchy of payers, and the documentation required.
Submit Claims on Time
Always try to submit the claims on time. This goes for both primary and secondary insurance payers. You should implement automated, computer-based systems to track claim deadlines. We also highly advise all healthcare providers to use revenue cycle management tools in their organization. That’s because human error is recurrent in this type of complex work.
Attach EOB for Secondary Claims
As mentioned in the previous section, EOB and ERA are vital documents. So, always make sure to attach them during claim submission. Doing this will minimize your risk of denial.
How To Resolve Denial Code CO 22?
If you receive a CO 22 denial code even after taking all the precautionary measures, you can resolve it by following the steps below.
Verify the Denial Reason
First and foremost, read the rejection notice very carefully. Try to understand why the claim was denied. Check if all the COB rules were followed correctly or if there were any mistakes in the patient details.
Confirm Primary and Secondary Payers
Sometimes, employees make mistakes and get confused between the primary and secondary insurance payers. So, recheck the patient details to confirm who the primary and secondary payers are. If there is a discrepancy, contact the patient or insurer for clarification.
Resubmit the Claim
Finally, after fixing all the errors, resubmit the insurance claim to the correct payer. If the primary insurer has already processed the claim, include the EOB when submitting it to the secondary insurer.
Follow Up
The last thing you can do to ensure timely payment is to follow up on the claim status. Once a week or every 15 days, contact the insurance payer to check the payment status.
That’s it. By following these steps, you can rectify your denial code 22.
Final Word
The CO 22 denial code can be easily prevented. All you have to do is watch for details and strictly follow the guidelines mentioned above. You have a good chance of avoiding denial code 22 if you implement all the suggestions we discussed in this blog.
However, if you want to minimize the fuss and complexity of medical billing and coding, it is a good idea to outsource your work to specialized medical coders. Our team at NeuraBill has decades of experience in providing denial management services. Just get on a quick call with our consultants to solve your billing problems.
