What to Do If a Claim Is Denied (Therapist Guide)

A denied claim isn't a dead end — it's a claim that needs work. Most denials are fixable, but only if you act before the filing deadline. Here's the exact process.

Step 1: Read the denial code, not just the denial

Every denial comes with a code — a CARC (Claim Adjustment Reason Code) like CO-16, and often a RARC (Remittance Advice Remark Code) like N290 that pinpoints the exact problem. The code tells you whether it's a simple fix (missing modifier) or a real dispute (medical necessity). Don't guess — decode it. Our denial code decoder translates the common ones.

Step 2: Categorize it — fixable error vs. true denial

Most therapy denials fall into three buckets: (1) submission errors (missing info, wrong NPI, coding mismatch) — fix and resubmit; (2) patient-responsibility (deductible, copay — PR codes) — bill the patient, not a denial; (3) coverage/medical-necessity disputes — these need an appeal with documentation. Knowing which bucket saves hours.

Step 3: Fix and resubmit, or appeal

For submission errors, correct the claim and resubmit — often that's all it takes. For genuine denials, file an appeal with supporting documentation (treatment plan, clinical notes proving medical necessity). Each payer has its own appeal process and form.

Step 4: Beat the clock

This is where money is lost. Timely filing deadlines are brutal — Medicare allows 365 days, but many commercial payers require appeals within 90 days or less. A denial that sits for two months can become permanently unrecoverable (denial code CO-29). Work denials weekly, not monthly.