Denial
A denial is a claim a payer has processed and refused to pay, in whole or part, with the reason returned as standardized codes on the remittance.
Updated
A denial occurs after a payer adjudicates a claim and decides not to pay some or all of it. The payer returns the reason on the electronic remittance advice using standardized Claim Adjustment Reason Codes (CARC) and Remittance Advice Remark Codes (RARC).
Denials are worked by correcting and resubmitting the claim, appealing the decision, or — when neither is warranted — writing off the balance.
In practice
Denials are data, not just lost revenue: each denial traces to an upstream cause — a registration error, a missing authorization, a coding choice, an enrollment gap — and preventing that cause is far cheaper than appealing the result.
Commonly confused with
- Rejection: A rejected claim never reached adjudication — it failed a format or data edit first; the two require different fixes.
- Underpayment: An underpayment is a claim paid at less than the contracted rate, not a refusal to pay.