Denial code 171 means payment is denied for services provided by a specific type of provider in a specific type of facility. Check the 835 Healthcare Policy Identification Segment for more information.
Denial code 171 is used when payment is denied for a service that is performed or billed by a provider in a facility that is not eligible for reimbursement. This denial code indicates that the type of provider or facility does not meet the criteria for payment according to the healthcare policy. To get more information about this denial, you can refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF) in the payment remittance advice, if it is available.
Common causes of code 171 are:
1. Incorrect provider type: The payment may be denied if the service is performed or billed by a provider who is not authorized to provide that specific type of service. This could be due to a coding error or a misunderstanding of the provider's scope of practice.
2. Incorrect facility type: Similarly, the payment may be denied if the service is performed or billed in a facility that is not appropriate for that type of service. For example, if a surgical procedure is performed in an outpatient clinic instead of a hospital, it may result in a denial.
3. Lack of documentation: The denial may occur if there is insufficient documentation to support the medical necessity of the service or the provider's qualifications. This could include missing or incomplete medical records, lack of supporting documentation for the procedure, or inadequate documentation of the provider's credentials.
4. Billing errors: Errors in the billing process, such as incorrect coding, missing or incorrect modifiers, or incomplete information, can lead to denials. These errors can result in the service being billed incorrectly, leading to a denial of payment.
5. Insurance policy restrictions: Some insurance policies may have specific restrictions on certain types of providers or facilities. If the service is not covered under the patient's insurance policy or if it does not meet the policy's requirements, the payment may be denied.
6. Lack of pre-authorization: Certain services may require pre-authorization from the insurance company before they can be performed. If the service is performed without obtaining the necessary pre-authorization, it may result in a denial of payment.
7. Coding errors: Incorrect coding, such as using the wrong procedure code or diagnosis code, can lead to denials. This could be due to human error or a lack of understanding of the coding guidelines.
8. Duplicate billing: If the same service is billed multiple times for the same patient, it may result in a denial. Duplicate billing can occur due to system errors, billing software issues, or human error.
9. Timely filing limits: Insurance companies have specific timeframes within which claims must be submitted. If the claim is not submitted within the specified timeframe, it may be denied based on timely filing limits.
10. Policy exclusions: Some insurance policies may have specific exclusions for certain services or conditions. If the service falls under one of these exclusions, the payment may be denied.
It is important for healthcare providers to review denial codes and address the underlying causes to prevent future denials and optimize revenue cycle management.
Ways to mitigate code 171 include:
- Ensure proper provider and facility type: To prevent this denial code, it is crucial to accurately identify and bill services performed by the appropriate provider in the correct type of facility. Double-check that the provider's credentials match the services rendered and that the facility type aligns with the services provided.
- Verify payer requirements: Each payer may have specific guidelines regarding the provider and facility types eligible for reimbursement. Stay updated with the latest payer policies and ensure compliance with their requirements to avoid denials. Regularly review and communicate any changes in payer policies to the billing and coding team.
- Accurate documentation: Complete and accurate documentation is essential to support the services billed. Ensure that the medical records clearly indicate the provider's qualifications and the facility type where the services were rendered. This documentation should be easily accessible and organized for efficient billing and coding processes.
- Staff education and training: Conduct regular training sessions for the billing and coding team to enhance their understanding of the specific requirements related to provider and facility types. This will help them identify any potential issues before submitting claims, reducing the chances of denials related to code 171.
- Utilize technology and software: Implementing advanced billing and coding software can help automate the process and reduce the risk of human errors. These tools often have built-in checks and alerts that can flag potential issues related to provider and facility types, allowing for timely corrections before claim submission.
- Conduct internal audits: Regularly perform internal audits to identify any potential coding or billing errors related to provider and facility types. These audits can help identify patterns or trends that may lead to denials and allow for corrective actions to be taken promptly.
By following these strategies, healthcare providers can mitigate code 171 denials and improve their revenue cycle management processes.
The steps to address code 171 are as follows:
- Review the claim details: Carefully examine the claim to ensure that it was submitted correctly and that all necessary information is included. Check for any errors or omissions that may have contributed to the denial.
- Verify provider and facility type: Confirm that the provider who performed or billed the service is the appropriate type for the specific facility where the service was rendered. Ensure that the provider's credentials and qualifications align with the requirements set by the payer.
- Validate coding accuracy: Double-check the coding used for the service in question. Ensure that the appropriate codes were assigned based on the documentation provided. Look for any potential coding errors or discrepancies that may have triggered the denial.
- Review payer policies: Familiarize yourself with the specific policies and guidelines of the payer regarding the type of provider and facility involved in the claim. Look for any specific requirements or restrictions that may have led to the denial.
- Gather supporting documentation: Collect any additional documentation or evidence that may support the claim and help overturn the denial. This may include medical records, clinical notes, or any other relevant information that can demonstrate the medical necessity and appropriateness of the service.
- Prepare an appeal: If you believe that the denial was incorrect or unjustified, prepare a well-documented appeal. Clearly state the reasons why you believe the denial should be overturned, providing supporting evidence and referencing any relevant policies or guidelines.
- Submit the appeal: Follow the payer's specific instructions for submitting appeals. Ensure that all required documentation is included and that the appeal is submitted within the designated timeframe. Keep a record of the appeal submission for future reference.
- Monitor the status: Keep track of the appeal's progress and any communication from the payer. Follow up regularly to ensure that the appeal is being reviewed and processed in a timely manner.
- Consider alternative actions: If the appeal is unsuccessful, explore other options such as resubmitting the claim with additional documentation, seeking assistance from a coding or billing expert, or engaging in further discussions with the payer to resolve the issue.
Remember, each denial code may require a unique approach, so it's essential to thoroughly understand the specific circumstances and requirements associated with each code to effectively address and resolve the denial.