payer-denial-patterns

name	payer-denial-patterns
version	2.0.0
description	Use this skill whenever working on denial prevention, pre-submission claim validation, prior authorization checks, coding agent denial risk assessment, appeal letter generation, or any component that predicts or prevents insurance claim denials. Triggers on: denial, prior auth, PA, medical necessity, LCD, NCD, NCCI edit, timely filing, claim rejection, payer rules, unbundling, modifier, appeal, eligibility verification, filing deadline, documentation requirements for procedures, or any reference to insurance payer behavior. Also use when editing code related to claim submission, payer interaction, denial prediction, or appeal generation. If the task involves insurance, payers, claims, preventing rejections, or understanding why claims get denied — load this skill.
allowed-tools	Read
license	Proprietary

Payer Denial Patterns

The 8 Denial Categories

Source: DISC-004, Change Healthcare Denials Index.

#	Category	% of Denials	AI Automation Potential
1	Prior Authorization	~23%	HIGH
2	Medical Necessity	~19%	HIGH
3	Coding Errors	~15%	VERY HIGH
4	Timely Filing	~12%	VERY HIGH
5	Duplicate Claims	~10%	HIGH
6	Patient Eligibility	~8%	MEDIUM
7	Missing Information	~7%	VERY HIGH
8	Contractual/Bundling	~6%	MEDIUM

Prevention by Category

1. Prior Authorization (~23%)

Cause: Service performed without required PA, or PA expired/mismatched. Prevention: Check PA requirements before scheduling. Verify PA number matches CPT on claim. Alert if PA expiring < 30 days.

2. Medical Necessity (~19%)

Cause: Documentation does not support clinical need under LCD/NCD criteria. Prevention: Ensure diagnosis codes meet LCD-approved indications. Flag insufficient documentation pre-submission. Note: LCD criteria vary by MAC jurisdiction.

3. Coding Errors (~15%)

Cause: NCCI edit violations, unbundling, modifier misuse, diagnosis-procedure mismatch. Prevention: Rules engine checks NCCI edits, MUE limits, and diagnosis-procedure linkage before submission.

4. Timely Filing (~12%)

Cause: Claim submitted after payer filing deadline. 100% preventable operational failure. Prevention: Track deadlines per payer. Auto-escalate at 75%.

5. Duplicate Claims (~10%)

Cause: Same claim submitted twice. Prevention: Deduplication check before submission.

6. Patient Eligibility (~8%)

Cause: Patient not covered on DOS, wrong insurance info. Prevention: Real-time eligibility verification before service.

7. Missing Information (~7%)

Cause: Incomplete claim data (missing modifier, referring provider, POS code). Prevention: Field completeness validation before submission.

8. Contractual/Bundling (~6%)

Cause: Service bundled per payer contract (beyond NCCI). Prevention: Maintain payer-specific bundling rules.

Medical Necessity Documentation

Top 10 Procedures Requiring Specific Diagnosis Support

#	Procedure	Required Documentation
1	Inpatient admission	Two-midnight rule rationale
2	MRI spine	Radiculopathy + failed 4-6 weeks conservative care
3	Total knee replacement	Failed conservative treatment; bone-on-bone imaging
4	Spinal fusion	6+ months failed conservative care; MRI + neuro deficit
5	Cardiac catheterization	Abnormal stress test OR acute coronary syndrome
6	Bariatric surgery	BMI >= 40 (or >= 35 with comorbidities); supervised diet; psych eval
7	Sleep study	ESS >= 10 or witnessed apneas; BMI documented
8	Home health services	Face-to-face encounter; homebound status; skilled need
9	CT abdomen/pelvis	GI symptoms documented; prior imaging if non-emergent
10	Genetic testing	Personal/family history; genetic counseling

Strong vs Weak Documentation

Strong (survives review):

• Specific symptoms with onset, duration, severity
• Failed prior treatments with dates and outcomes
• Objective test results supporting clinical decision
• Clear rationale connecting diagnosis to procedure

Weak (triggers denials):

• "Back pain" without neurological findings (for MRI)
• "Admit for observation" without clinical rationale
• Procedure ordered without documented prior workup
• Generic .9 unspecified codes for procedures needing specifics

Timely Filing Deadlines

Payer	Filing Deadline	Appeal Deadline
Medicare	365 days from DOS	120 days
Medicaid	90-365 days (varies by state)	Varies
UnitedHealthcare	90-180 days	180 days
Aetna	90-180 days	180 days
Cigna	90-365 days	365 days
Anthem/BCBS	90-180 days (varies)	180 days
Humana	180 days	180 days
Tricare	365 days	90 days

Alert thresholds: 75% = warning, 90% = urgent, 95% = critical, 100% = too late.

Timely filing denials are 100% preventable. Our system should eliminate them entirely through automated tracking.

Appeal Statistics

86% of PA denials are eventually overturned on appeal (AMA 2023), indicating initial denials are often due to documentation gaps rather than clinical inappropriateness.

For Full Reference

See references/payer-specific-rules.md (per-payer details) See references/prior-auth-cpt-list.md (PA-required CPT codes)