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July 10, 2024

Root Cause of Medicare Claim Denials

Written By Teresa Bolden, CPC, CPMA, CEMC, CHBS, Medicare Compliance Consultant   


Root Cause Analysis (RCA) is an important claims management tool to improve billing compliance.  It is a systematic problem-solving technique used to identify the underlying causes of a particular issue or problem, rather than addressing only its symptoms. It involves a structured approach to investigating and understanding why something happened, with the goal of preventing its recurrence. Applying RCA to analyze how and why claims are denied not only improves your bottom line, but reduces future denials, improves the organization’s ability to push-back on inappropriate denials and increases billing compliance through a documented process.


Accuracy must be the focus of documentation, coding and billing compliance efforts.  Analyzing denial trends which may exist in your Accounts Receivable (A/R) is the place to start.  But understanding how Centers for Medicare & Medicaid (CMS) views fraud versus abuse is equally important.  Download the CMS Medicare Fraud & Abuse: Prevent, Detect, Report Booklet for more information, but in short note the following:

When you submit a claim for services provided to a Medicare beneficiary, you are filing a bill with the Federal government and certifying you earned the payment requested and complied with the billing requirements. If you knew or should have known the submitted claim was false, then the attempt to collect payment is illegal. When Medicare denies a claim, review documentation and billing to evaluate whether it can be appealed. Examples of improper claims which should not be appealed, but written off and are subject to further investigation by CMS often include:

  • Billing codes that reflect a more severe illness than actually existed or a more expensive treatment than was provided
  • Billing medically unnecessary services
  • Billing services not provided
  • Billing services performed by an improperly supervised or unqualified employee
  • Billing services performed by an employee excluded from participation in the Federal health care programs
  • Billing services of such low quality they are virtually worthless
  • Billing separately for services already included in a global fee, like billing an evaluation and management service the day after surgery

CMS and the Office of Inspector General (OIG) expect providers and physicians treating Medicare beneficiaries to establish an effective compliance program. Establishing and following a compliance program helps physicians avoid fraudulent activities and submit accurate claims. The following seven components provide a solid basis for a physician practice compliance program:

  1. Conduct internal monitoring and auditing
  2. Implement compliance and practice standards
  3. Designate a compliance officer or contact
  4. Conduct appropriate training and education
  5. Respond appropriately to detected offenses and develop corrective action
  6. Develop open lines of communication with employees
  7. Enforce disciplinary standards through well-publicized guidelines

Understanding Medicare Claim Denials

Medicare claim denials can be a significant source of frustration and financial strain for the healthcare community. While seasoned coding and billing specialists are knowledgeable about root causes for common denials, they too find it challenging at times to dodge the obstacles that result in claim denial. To begin the RCA process, it is vital to gain an understanding of how the payer determines a denial.  CMS publishes the most common reasons for Medicare denials by category as follows:

  1. Duplicate claim/service
  2. Bundled service/procedure
  3. Care covered by another payer
  4. Medical necessity
  5. Non-covered service/item

Understanding root causes for claim denials is crucial for improving claim acceptance rates and ensuring timely reimbursement. Below we explore the most common reasons for Medicare claim denials and insights into how to avoid unnecessary denials

1.  Duplicate claim/service.

Duplicate claim denials continue to be one of the top billing errors among all Medicare Administrative Contractors (MACs). A duplicate denial indicates that more than one claim was submitted for the same service, for the same patient, for the same date of service. In most instances, the claim was already processed and paid. While some claims are exact duplicates of previously submitted claims, some services are denied as duplicates for other reasons. The following reason and remark codes are examples of common duplicate claim/service denial messages:

Reason CODE

Remark Code



Duplicate claim/service.


Service denied because payment already made for same/similar procedure within set time frame.


Service not payable with other service rendered on the same date.


Your claim for a referred or purchased service cannot be paid because payment has already been made for this same service to another provider by a payment contractor representing the payer.


Duplicate of a claim processed, or to be processed, as a crossover claim.


  • Allow 30 days from the claim receipt date before submitting a subsequent claim for the same service(s).
  • Use the MACs free online portal or Interactive Voice Response (IVR) to check the status of the initial claim before submitting a subsequent claim.
  • Investigate the reason for denial, rather than simply resubmitting the claim. Some physicians/QHPs will refile a claim to correct a previously denied claim. This resubmission can cause an unnecessary duplicate denial when the initial claim processed correctly.
  • Correct the following clerical errors through your MAC’s IVR or online portal:
    • Change the referring provider name and National Provider Identifier (NPI).
      • The rendering provider’s NPI may not be changed.
    • Change the number of services or units.  
    • Add or change claim diagnosis codes.
    • Add, change or delete eligible modifiers.
      • Excluded modifiers are: 22, 24, 52, 53, 55, 62, 66, 80, 81, EA, GA, GX, GY
    • Change the procedure code.
    • Change the date of service.
    • Change the place of service.
    • Change the billed amount.

A physician or other QHP may perform multiple procedures or “repeat procedures,” to the same patient on a single day. All services provided to the same patient, by the same physician/QHP, on the same date of service should be billed on the same claim.


  • When appropriate, use a unit of service multiplier rather than billing the same CPT/HCPCS code on multiple lines.
  • Drug codes - bill the HCPCS code for drugs according to the dosage in the code’ description and add a multiplier on the claim to show the appropriate dosage. For example, the HCPCS descriptor states 1 mg and 4 mg are administered, the drug should be billed with 4 units of service (UOS).
  • Drug administration fee – bill one UOS for each intramuscular administration of therapeutic drugs on one line (i.e., 96372). The UOS billed should equal the number of separate injections.
  • Use one of the following modifiers to report services or procedures repeated on the same day:
    • 76 – Procedure or service was repeated subsequent to the original procedure.
    • 77 – Repeat procedure or service by another physician or other QHP subsequent to the original procedure.
    • 91 – Repeat clinical diagnostic laboratory test.

NOTE: Include a narrative description indicating the reason for the repeated procedure in item 19 of the 1500 claim form or the electronic equivalent.

2.  Bundled service/procedure.

There are several scenarios in which a service or procedure does not receive separate reimbursement because payment for it is included in Medicare’s payment for another service or procedure. The most common form errors falling under the category of bundling denials identified by CMS:

  • Items are always bundled;
  • Lack of accurately applying the National Correct Coding Initiative (NCCI) edits; and
  • Errors made related to global surgery claims;

Always bundled. Some services/procedures are “always bundled” for Medicare purposes and never receive separate reimbursement, even from the patient. Those services/procedures have a status indicator of “B” or “P” in the Medicare Physician Fee Schedule (MPFS) Relative Value File (Addendum B of the MPFS Final Rule). The common reason and remark codes used for always bundled services/procedures are:

Reason CODE

Remark Code



Submission/billing error(s)


Procedure code incidental to primary procedure.


Separately billed services/tests have been bundled as they are considered components of the same procedure. Separate payment is not allowed.


Not covered when performed during the same session/date as a previously processed service for the patient.


  • Identify the status indicator for all services provided by reviewing the MPFS Relative Value File annually. Flag services/procedures that have a status indicator of “B” or “P” as non-billable charges.

National Correct Coding Initiative (NCCI) Edits. The Centers for Medicare & Medicaid Services (CMS) developed the NCCI program to promote national correct coding of Medicare Part B claims. The purpose of the NCCI Procedure to Procedure (PTP) edits is to prevent improper payment when incorrect code combinations are billed. The NCCI contains one table of edits for physicians and other qualified healthcare professionals (QHPs) and one table of edits for outpatient hospital services. The NCCI PTP edits are available free of charge from the CMS website.

The CMS also developed the NCCI Medically Unlikely Edits (MUE) program to prevent improper payments when services are reported with incorrect units of service. The NCCI MUEs assigned to each CPT/HCPCS code are in the NCCI PTP edit table.

The common reason and remark codes for NCCI bundled services/procedures are:

Reason CODE

Remark Code



The benefit for this service is included in the payment/allowance for another procedure or service that has already been paid.


Procedure code is inconsistent with the modifier, or a required modifier is missing.


Not covered when performed during the same session/date as a previously processed service for the patient.


The number of days or units of service exceed our acceptable maximum.


  • Download the most recent PTP edits.
    • Locate the code pair in the Column1/Column 2 List. The Column 2 code is considered a component of the Column 1 code.
    • Review Column F to determine if a modifier may be appropriate for the situation.
  • Review the NCCI Policy Manual that is available in the NCCI section of the CMS website. The policy manual provides additional details regarding PTP edits along with exceptions and instructions for using modifiers.
  • Use encoder software to identify bundled services and modifier opportunities.

Global Surgery Edits. The global surgical package, also called global surgery, includes all necessary services normally provided by a physician (or members of the same group with the same specialty) before, during, and after a procedure. Medicare physicians in the same group practice, with the same specialty, must bill and accept payment as though they are a single physician. Global surgery applies in any setting, including an inpatient hospital, outpatient hospital, ambulatory surgical center (ASC), and physician’s office.

The Medicare physician fee schedule (MPFS) includes all procedure codes and global surgery indicators. The global surgery payment rules apply to procedure codes with global surgery indicators 000, 010, 090 and sometimes, YYY. Definitions for the most common global surgery indicators are as follows:

  • 000 codes identify endoscopies and some minor surgical procedures. The Medicare allowable includes the cost of the related E/M service provided on the same day.
  • 010 codes identify other minor procedures. The Medicare allowable includes the cost of the related E/M service on the same day, plus 10 days following the procedure.
  • 090 codes identify major surgeries. The Medicare allowable includes the cost of the related E/M service provided the day before the surgery, day of the surgery, plus 90 day following surgery.

NOTE: Refer to the CMS publication of Global Surgery (MLN907166 December 2023) for complete guidelines and exceptions to global surgery rules.

The common reason and remark codes for bundled services due to global surgery are:

Reason CODE

Remark Code



The benefit for this service is included in the payment/allowance for another procedure or service that has already been paid.


Not covered when performed during the same session/date as a previously processed service for the patient.


The cost of care before and after the surgery or procedure is included in the approved amount for that service.


Service not payable with other service rendered on the same date.


  • Bill E/M service(s) provided during the postoperative period for a reason(s) unrelated to the original procedure, with modifier 24.
  • A significant, separately identifiable E/M service provided on the same day as a minor procedure, may be billed with modifier 25.
    • NOTE: This one of the most commonly misused modifiers. Refer to your local MACs instructions for using modifier 25. According to Medicare, the decision for surgery is always included in the allowance for a minor surgical procedure. (Reference: IOM Publication 100-04 Chapter 12.40.1.B)
  • Critical care provided on the same day or during the postoperative period that is unrelated to the surgical procedure should be billed with modifier FT.
  • When the need to perform major surgery within 24 hours is decided during an E/M service, bill the E/M with modifier 57 (decision for surgery).
  • It may be necessary to indicate that another procedure was performed during the postoperative period of the initial procedure. When the patient returns to the operative suite to address postoperative complications, bill the unplanned surgical procedure with modifier 78.
  • An unrelated surgical procedure(s) performed during the postoperative period of another procedure should be billed with modifier 79.
  • It may be necessary to indicate that the performance of a procedure or service during the postoperative period was (a) planned or anticipated (staged); (b) more extensive than the original procedure; or (c) for therapy following a surgical procedure. When one of these circumstances apply, bill the procedure with modifier 58.

3.  Claims sent to the wrong payer/contractor.

Medicare law and regulations require all entities that bill Medicare for services or items given to Medicare beneficiaries to decide whether Medicare is the primary payer for those services or items before submitting a claim to Medicare (Reference: Section 1862(b)(2) of the Social Security Act and regulations at 42 CF 489.20g).

Medicare Secondary payer (MSP) provisions protect Medicare from paying when another entity should pay first. Medicare may be secondary if the patient falls under any of the following reasons:

MSP Type

Secondary Coverage Reason

Type 12

The patient is an aged worker or spouse with an employer group health plan of more than 20 employees.

Type 13

Is covered under an End Stage Renal Disease (ESRD) coordination period, which is typically the first 30 months.

Type 14 or 47

Is covered under a no-fault plan, which usually includes any liability or auto claims.

Type 15

Is covered under a workers’ compensation claim.

Type 42

Is covered under a Veterans Administration plan and is not being attended within a VA facility or a VA physician.

Type 43

Is disabled and the employer’s group plan has 100 or more employees.

NOTE: Medicare’s publication of Medicare Secondary Payer MLN006903 dated October 2023 includes common MSP Coverage Situations

There are several situations in which a local Medicare Administrative Contractor (MAC) is not the appropriate payer/contractor to process a claim for a Medicare patient. Besides traditional Medicare, Congress created a Medicare Advantage option that allows private insurance companies offer coverage to people with Medicare, giving them more choices. These Medicare Advantage options (sometimes called Part C) include:

  • Medicare Health Maintenance Organizations
  • Preferred Provider Organizations
  • Private Fee-for-Service Plans
  • Medicare Medical Savings Account Plans
  • Medicare Special Needs Plans

The common reason and remark codes for claims sent to the wrong payer/contractor are:

Reason CODE

Remark Code



This care may be covered by another payer per coordination of benefits.


Charges are covered under a capitation agreement/managed care plan.


Claim/service not covered by this payer contractor. You must send the claim/service to the correct payer/contractor.


Missing plan information for other insurance


Alert specific federal/state/local program may cover this service.


  • Collect full patient health information upon each office visit, outpatient visit, and hospital admission.
  • Patients that elect coverage through a Medicare Advantage (MA) plan still keep their original red, white and blue Medicare cards. Be sure to ask to see all of their insurance cards.
    • Patients may elect new plans each year. In some situations, coverage may change in the middle of a calendar year.
  • Find the primary payer before submission of a claim, and bill the proper responsible payer(s) for related services.
  • Use the MAC’s IVR to verify whether Medicare is primary or secondary for specific patients prior to submitting claims.
  • For multiple services, bill each responsible payer(s) separately.
  • Do not bill for treatment provided for accident-related services and non-accident-related services on the same claim. Send separate claims to Medicare: one claim for services related to the accident and another claim for services not related to the accident.
  • Always use specific diagnosis codes related to an accident or injury. Doing so will promote correct and prompt payment. Do not forget to report ICD-10-CM external cause codes.
  • Download and review the quick reference table for common MSP coverage situations in MLN006903 dated October 2023.

4.  Not Covered Due to Medical Necessity

Section 1862(a)(1) of the Social Security Act (the Act) states no Medicare payment shall be made for expenses incurred for items or services that “are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.” To that end, CMS developed National Coverage Determinations (NCDs) to determine if a specific item or service is covered by Medicare nationally. Each NCD is based on evidence, limiting coverage to items and services that are considered “reasonable and necessary” for treating or diagnosing an illness or injury. NCDs can be found online in Internet Only Manual (IOM) Publication 100-03.

Some services are processed according to a Local Coverage Determination (LCD) and its accompanying Billing/Coding Article. These resources identify coverage criteria, frequency limitations, documentation requirements, coding guidelines and medical necessity. LCDs are decisions made by MACs that apply to services provided to Medicare patients within the specific jurisdiction that the MAC oversees. The common reason and remark codes for medical necessity denials are:

Reason CODE

Remark Code



These are non-covered services because this is not deemed a “medical necessity: by the payer.


This decision was based on a Local Coverage Determination (LCD).


  • Stay up-to-date with Medicare’s coverage policies and guidelines.
  • Ensure that medical records comprehensively document the patient’s condition and the necessity of the services provided.
  • Use encoder software to identify medical necessity concerns.
  • If a patient decides to receive the item/service that Medicare considers not medically necessary, be sure to obtain an Advance Beneficiary Notice (ABN) before providing the item or service.
    • NOTE: The CMS developed an Advance Beneficiary Notice of Non-coverage Tutorial (MLN909183 May 2023).

5.  Non-Covered Service/Item

Some services are statutorily excluded from Medicare coverage. Examples include custodial care, cosmetic surgery, personal comfort items and services, items and services required because of war, routine or annual physical checkups (with certain exceptions). In general, healthcare providers are not required to submit claims to Medicare for statutorily excluded services. There are times, however, when the patient requests the service(s) to be submitted in order to obtain a denial for secondary insurance purposes. In this case, submit statutorily excluded services with modifier –GY (item or service statutorily excluded, does not meet the definition of any Medicare benefit or, for non-Medicare insurers, is not a contract benefit). The common reason and remark codes for non-covered items/services are:

Reason CODE

Remark Code



Non-covered charges.


Statutorily excluded service(s).



Not covered with this procedure.


  • Download and review CMS publication of Items & Services Not Covered under Medicare (MLN906765 June 2022).
  • Notify the patient that the item/service is statutorily excluded from coverage.
    • NOTE: The ABN may be provided to Medicare beneficiaries as a courtesy, to inform them of their financial responsibility for services that are statutorily excluded from Medicare coverage. Healthcare providers are not required to use an ABN to notify patients about statutorily excluded items/services.
  • Do not bill statutorily excluded services to Medicare unless the patient requests it.
  • Append modifier –GY to statutorily excluded services that are billed to Medicare.


Maintain accurate and complete medical records and documentation of the services you provide. This ensures improved coordination of care, quality and improves your ability to appeal and have denied claims overturned. Conduct pre-billing audits periodically to verify that documentation supports the claims you submit for payment. 

When your analysis identifies a trend in the type of denials, implement the RCA approach.  Learn more about Root Cause Analysis by enrolling in the Auditing for Compliance, online course offered by AIHC.

About the Author

Teresa Bolden,CPC, CPMA, CEMC, CHBS,  is a Medicare Compliance Consultant and serves on the AIHC Volunteer Education Committee.  Article edited by Joanne Byron, LPN, CCA, CHA, CHCO, CHBS, CHCM, CIFHA, CMDP, OHCC, ICDCT-CM/PCS of the American Institute of Healthcare Compliance (AIHC), a non-profit healthcare education organization.  

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