Insurance claims get denied for a short list of reasons: the patient's coverage was not what the practice thought, information on the claim was missing or wrong, an authorization or referral was absent, the payer did not consider the service covered or necessary, the claim broke a coding or bundling rule, or it arrived too late. The reason is printed on the remittance as a code. Reading that code is the fastest way to find out which part of your practice is causing the denial.
The common reasons, in plain English
| What the payer is saying | Typical reason code | Usually caused by |
|---|---|---|
| "This person was not covered on that date" | CARC 27 | Insurance not rechecked at each visit; a plan ended or changed. |
| "Another plan should pay first" | CARC 22 | Primary and secondary insurance not confirmed with the patient. |
| "Something on the claim is missing or wrong" | CARC 16 | Demographics, provider numbers or required fields entered incorrectly. |
| "You needed approval first" | CARC 197 | Authorization not requested, expired, or its number not on the claim. |
| "We do not consider this necessary" | CARC 50 | Diagnosis or documentation does not meet the payer's coverage policy. |
| "This plan does not cover that service" | CARC 204 | Benefits not checked for that service before the visit. |
| "This was already paid as part of something else" | CARC 97 | Bundling rules or a missing or wrong modifier. |
| "You sent it too late" | CARC 29 | Claims held, lost or corrected after the payer's filing limit. |
Codes and their official wording are maintained by X12 in the Claim Adjustment Reason Code list. Most remittances also carry a remark code that narrows the reason down further, so read both.
Why the reason is often unclear
Payers do not always explain themselves well. In KFF's review of 2024 federal transparency data for plans sold on HealthCare.gov, the most common reason insurers reported for in-network denials was simply "other", at 36% of denials where a reason was given. When the code on your remittance is vague, call the payer or check its portal for the specific policy that was applied before you decide what to do next.
For prior authorization, this is starting to change. Under the CMS Interoperability and Prior Authorization final rule, Medicare Advantage, Medicaid, CHIP and their managed care plans and exchange plans must give a specific reason when they deny a prior authorization request, beginning in 2026.
Is the denial your fault or the payer's?
Sort every denial into one of three groups before working it:
- Practice error. Wrong insurance, missing information, no authorization, wrong code or modifier, late filing. Fix the claim if the deadline allows, and fix the step that caused it.
- Payer judgment. Medical necessity, frequency limits, bundling interpretations. These can be appealed with the policy and the records.
- Payer error. Wrong fee schedule, provider shown as out of network when you are contracted, a processing mistake. Call, request reprocessing, and keep the reference number.
Practices that skip this step tend to resubmit everything, which wastes time on denials that needed an appeal and misses the process problems that keep creating new ones.
What to do with a denied claim this week
- Read the reason code and remark code, and note the date of the denial.
- Look up the payer's appeal or corrected-claim deadline and put it on a calendar.
- Decide: correct and resubmit, appeal, bill the patient (only if the patient is truly responsible), or write off with a documented reason.
- Log the root cause so it is counted, not forgotten.
For the full process across all your denials, read our guide to denial management and reducing claim denials. For the hardest category, see what to do when a claim is denied as not medically necessary.
Signs denials are costing your practice more than you think
- Nobody can say which reason code was most common last month.
- Denials are worked only when someone has spare time.
- The same payer denies the same service repeatedly.
- Old denied balances are written off in bulk at month end.
- Patients receive bills for amounts their insurance should have paid.
How Sterling Global Solution LLC stops repeat denials
We verify eligibility and benefits and start authorizations before the visit, scrub every claim for coding, modifier and payer-rule errors before it is sent, and score it for denial risk. When a denial arrives, we read the codes, sort it into practice error, payer judgment or payer error, correct or appeal it inside the deadline, and report the cause back to you so it stops repeating. Eligibility verification, benefits verification, prior authorizations and denial management are all part of our 30-Day Free Trial.
Frequently asked questions
Why are my insurance claims being denied?
Where do I find the reason a claim was denied?
Are most claim denials the practice's fault?
What is the most common reason insurers give for denials?
Should I resubmit or appeal a denied claim?
Sources
X12, Claim Adjustment Reason Codes: CARC 16, 22, 27, 29, 50, 97, 197 and 204.
KFF, Claims Denials and Appeals in ACA Marketplace Plans in 2024, March 24, 2026: "other" as the most common reported denial reason.
Centers for Medicare & Medicaid Services, CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F) fact sheet: specific reasons for prior authorization denials.
Related reading
- Denial management services. The full process for reducing denials.
- Claim denied as not medically necessary. Corrected claim or appeal, and the deadlines.
- Prior authorization services. Stop authorization denials before the visit.
- Why your clean claim rate is stuck. The front-end errors behind first-pass failures.
- The real cost of a denied claim. Why rework costs more than it looks.
Find out why your claims are denied
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