Understanding the Explanation of Benefits (EOB)
An EOB is a document from an insurer detailing how a claim was processed. It explains what was paid, adjusted, or denied. Understanding its codes is the first step to reducing denials.
Key Adjustment Codes
- CO-45 (Contractual Obligation): An adjustment based on your in-network contract rate.
- PR (Patient Responsibility): Codes like PR-1 (Deductible), PR-2 (Coinsurance), and PR-3 (Copay) indicate the amount the patient owes.
- OA (Other Adjustments): Often used by secondary payers to show an amount already paid by a primary plan.
Common Denial Reasons and How to Prevent Them
1. Third-Party Liability Denials (OA-19, OA-20)
These occur when an injury is covered by another policy, like workers' compensation or auto insurance (PIP, liability). This is common in physical therapy and chiropractic specialties.
Prevention: Always ask patients if their injury is related to an accident. If a patient's PIP benefits are exhausted, obtain a PIP exhaustion letter to send to their health insurance.
2. Modifier Issues (CO-4)
A frequent cause of denials is a missing or incorrect modifier. This includes the 25 modifier for E/M services, telehealth modifiers like 95 or GT, and DME modifiers like NU, KX, and LT/RT.
Prevention: Use tools like Encoder Pro to check for compatible modifiers and review payer policies for specific requirements, especially for telehealth and bilateral procedures.
3. Place of Service (POS) Errors (CO-5)
This denial happens when the POS code (e.g., 11 for Office, 02 for Telehealth) is inconsistent with the service provided or the location listed in Box 32 of the claim form.
4. Bundled Services (CO-97)
Payers deny claims when a service is considered part of another procedure billed on the same day. For example, billing for two similar braces on the same foot.
Prevention: Use bundled code checkers on MAC websites. If services are truly distinct, use appropriate modifiers like 59 or more specific X-modifiers (XE, XS, XP, XU).
5. Authorization & Referral Issues (CO-39, CO-107)
Denials for missing, expired, or exceeded prior authorizations or PCP referrals are common. Payers often use the terms interchangeably.
6. Coordination of Benefits & Medicare Advantage (CO-22, CO-109)
CO-22 means the primary/secondary insurance order is wrong. CO-109 specifically means you billed Medicare Part B, but the patient has a commercial Medicare Advantage plan that should have been billed instead.
