5 Medical Billing Mistakes That Lead to Insurance Claim Denials (And How to Avoid Them)

Insurance claim denials are one of the most frustrating—and preventable—problems in medical billing. Whether you’re managing an independent practice or scaling a digital health startup, simple billing errors can cost you thousands in lost revenue every month.

In fact, up to 15% of all medical claims are denied, and a majority of those denials are due to avoidable mistakes. Even worse—65% of denied claims are never reworked or resubmitted.

In this post, we’ll cover the top 5 medical billing mistakes that lead to insurance claim denials—and how to fix them so you can get paid faster and more consistently.

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1. Not Verifying Patient Eligibility Before Every Appointment

Most common denial codes related to patient eligibility:
- CO-27: "Expenses incurred after coverage terminated."
- CO-22: "This care may be covered by another payer."
- PR-31: "Patient cannot be identified as our insured."

Failing to verify patient eligibility before a visit is one of the top causes of denials. Even if a patient has been seen recently, insurance coverage can change without notice.

How to prevent it:

• Run real-time eligibility checks before each visit—automate it if possible.
• Re-verify coverage regularly, especially at the start of a new calendar year.
• Educate front desk staff to flag changes and confirm plan details at check-in.

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2. Submitting Claims After the Timely Filing Deadline

Most common denial codes related to timely filing:
- CO-29: "The time limit for filing has expired."

Each payer has different timely filing limits—ranging from 30 days to over 180. Miss those windows, and your claims will be denied, often with no recourse.

How to prevent it:

• Track payer-specific deadlines in a shared calendar or system.
• Submit claims within 48 hours of service whenever possible.
• Set up alerts in your billing software for aging unsubmitted claims.

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3. Missing or Incorrect CPT Modifiers

Most common denial codes related to incorrect modifiers:
- CO-4: "The procedure code is inconsistent with the modifier used"
- CO-109: "Claim not covered by this payer/contractor"
- CO-B7: "This provider was not certified/eligible to be paid for this procedure/service"

Modifiers are critical billing elements. Omitting one—or using the wrong one—can turn a clean claim into a rejection, especially with complex visits or telehealth.

How to prevent it:

• Create a “modifier cheat sheet” by payer and common CPT code combinations.
• For telehealth, use correct POS codes (often 02 or 10) and modifiers like 95 or GT.
• Train clinical staff to document any services that require special billing context.

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4. Billing with the Wrong Provider or NPI

Most common denial codes related to incorrect NPI:
- CO-16: "Claim lacks required information or has invalid information"
- CO-204: "Service/equipment/drug not covered under the patient’s current benefit plan"
- CO-208: "NPI not on file or mismatched"

Incorrect or outdated NPI or credentialing data can cause immediate rejections—especially when multiple providers are billing under the same group.

How to prevent it:

• Keep a credentialing tracker with effective dates and payer approvals.
• Regularly audit claims for NPI accuracy across rendering and billing fields.
• For group practices or digital health companies, ensure each clinician is properly linked to the TIN/NPI.

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5. Failing to Follow Up on Denied Claims

Most denials can be recovered—but only if someone is tracking and reworking them. The longer they sit in A/R, the less likely they are to be paid.

Denial follow-up is tedious, time-consuming, and often falls to the bottom of the to-do list when staff are stretched thin. That’s why 65% of denied claims are never reworked—and the revenue disappears.

How to prevent it:

• Set up a denial tracking dashboard that sorts by code, payer, and CPT.
• Assign clear owners for rework and appeal processes.
• Monitor patterns and update workflows or training based on denial trends.

💡 Or—offload this entirely.
At Joyful Health, we specialize in recovering the hardest-to-get revenue. We work inside your system as an extension of your team, reworking denials, chasing unpaid claims, and helping you recover revenue most billing companies write off.

We only get paid when you do. No fixed fees. No disruption. Just recovered revenue.

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Want to know why your claims are being denied?

We’ll take a look under the hood for you.

Our team will run a free revenue assessment to identify your most common denial reasons, show you what’s recoverable, and highlight what to fix so you can collect more of what you’ve already earned.

👉 Get a Free Revenue Assessment
(No commitment. Just insights you can use.)