Medical billing is a complex task. It requires extreme attention to detail. Hospitals or practices that try to file insurance claims for all patients by themselves face a lot of rejections. Claim denials delay reimbursements, disrupt revenue cycles, and increase administrative workload.
1,400 U.S. hospitals found that claim denials are increasing. However, 84% of these denials are easily preventable. Among the most frequently occurring reasons for denials is plan expiry.
In this blog, we will provide a detailed description of the CO 27 denial code. We will also discuss some root causes behind CO 27 denials and how you can prevent and resolve them. So, let’s start.
CO 27 Denial Code – Description
In simple terms, an insurance payer rejects a claim with denial code 27 when medical services are billed after a patient’s insurance policy has expired. In other words, the claim cannot be processed because the patient’s coverage was no longer active on the service date.
Resolving the CO 27 denials can be difficult. However, they can easily be prevented with some simple strategies.
What Causes the CO 27 Denial Code?
Before moving on to the prevention and resolution techniques, let’s look at the primary causes behind the denial code 27.
Expired or Terminated Insurance Coverage
As we already discussed, the primary reason for CO 27 denials is rendering services after a patient’s insurance has expired or terminated. This can happen for many reasons, such as the patient not paying his premiums, changing his employer, or recently modifying his insurance plan.
Incorrect or Outdated Insurance Information
Another common reason for denial code 27 is that the billers don’t update the patient’s insurance coverage details in their record. Errors in recording insurance details, such as policy number, expiration date, or payer details, can lead to claim rejections.
It can also happen from the patient’s end. Sometimes, patients forget to update their coverage status, causing providers to bill an invalid policy.
Delay in Claim Submission
Late claim submission is another major contributor to CO 27 denials. If a provider submits a claim after the patient’s coverage has ended, the insurance company will reject it.
Lack of Insurance Verification
As a healthcare provider, it is your responsibility to check and verify the patient’s insurance coverage. Failing to verify a patient’s insurance coverage on the day of service increases the risk of a CO 27 denial code.
Patient Switching Insurance Plans
Sometimes, the patient switches from one insurance payer to another without informing the healthcare provider. This may cause claims to be submitted to the wrong insurer, leading to CO 27 denials.
Billing Errors
Putting incorrect patient details like date of service, patient name, or service codes can also result in denial code CO 27.
How to Prevent Denial Code CO 27?
You can follow these tips to mitigate triggering the CO 27 denial code.
Verify Insurance Coverage in Real-Time
The first step that you can take to prevent CO 27 denials is to set up a strict real-time eligibility checking system in your practice. Ensure your billers have confirmed a patient’s insurance status before rendering services.
Update Patient Information Regularly
Encourage patients to provide updated insurance details during each visit. Implement a policy where front desk staff ask for any changes in coverage before every appointment.
Establish Clear Communication with Patients
Try to inform all your current patients to update their insurance coverage. Also, ask them to notify you if they ever change their insurance plan or switch to another payer. Having this information beforehand can reduce the chances of denial code 27.
Train Your Billing Staff
Training your staff is the most important thing you can do to prevent denials. Make sure that all the new and experienced staff are well aware of payer policies, claim submission guidelines, and insurance verification protocols.
A good way to do this is to hold regular training sessions. These can be arranged annually or even twice a year.
Submit Claims Promptly
Delays in claim submission increase the risk of rejections. Providers should have a streamlined claims processing workflow to ensure timely submission and reduce administrative backlog.
To improve the submission system, implement automated RCM and billing software in your organization. These systems can automatically detect payer deadlines and patients’ coverage expiration dates.
How to Resolve Denial Code CO 27?
There isn’t much that you can do to resolve the CO 27 denial code. The best you can do is to find some error or discrepancy in the insurer’s rejection and make it a basis to reclaim.
Here is how you can do it:
- Start by checking the patient’s coverage details and identifying the exact termination date. You can do this through payer portals or by directly contacting the insurance payer.
- Once you have identified the date, examine the claim to ensure that the service date, policy number, and patient details are accurate. Even minor mistakes can result in denials, so make sure to review each section thoroughly. Also, review the remittance advice and Eligibility of Benefits (EOB), if available.
- If the insurance coverage was terminated, reach out to the patient to gather information about new insurance plans or alternative payment options.
- On the other hand, if you find any errors, correct them and resubmit the claim. Ensure supporting documentation, such as eligibility proof, is attached to prevent further delays.
- If the insurance company refuses to reimburse the amount, it becomes the patient’s responsibility to pay for all the expenses. In this case, you should discuss payment options or financial assistance programs with the patient to help cover the costs.
Final Word
Preventing and resolving the CO 27 denial code is essential for all healthcare providers. Failure in resolution will take a huge toll on your finances in the form of delayed or no reimbursements, decreased cash flow, and overall revenue reduction.
You can implement the strategies we shared in this blog to prevent some of these denials. However, according to data, 65% of denied claims are never resubmitted, probably because healthcare providers don’t know how to tackle them.
Outsourcing denial management to experts (specialized in resolving complex denials) is the best approach to boosting your revenue.
