Denial Code (CO-27)

by

What is Denial Code CO 27?

Denial Code 27 in medical billing refers to “Expenses incurred after coverage terminated”. This means that the claim was denied because the services were provided after the patient’s insurance coverage had expired or was no longer active.

Common Causes of Denial Code 27

  1. Patient’s Insurance Coverage Expired or Terminated
    • If the patient’s insurance was inactive on the date of service, the claim will be denied.
  2. Incorrect Insurance Policy Information
    • If the patient provided outdated or incorrect insurance details, the claim may be rejected.
  3. Coverage Not Active at the Time of Service
    • The patient’s policy may have a lapse due to non-payment of premiums.
  4. Retroactive Termination of Insurance
    • The payer may have terminated the policy retroactively, affecting previously assumed coverage.
  5. Coordination of Benefits (COB) Issues
    • If the primary and secondary insurance details are not correctly updated, the claim may not be processed correctly.
  6. Billing the Wrong Payer
    • If the patient switched insurance plans but the old insurance was billed, the claim may be denied.

How to Fix Denial Code CO 27

1. Verify Patient’s Insurance Coverage

  • Check the patient’s eligibility before submitting claims.
  • Use electronic verification tools or contact the payer directly.

2. Confirm Policy Effective and Termination Dates

  • Review the policy details to ensure coverage was active on the date of service.

3. Correct and Resubmit the Claim

  • If the insurance was active but incorrect details were submitted, correct them and resubmit the claim.

4. Contact the Payer for Clarification

  • If the insurance terminated retroactively, discuss possible claim processing exceptions.

5. Request the Patient to Provide Updated Insurance Details

  • If coverage has changed, ask the patient for the correct insurance information and submit a claim to the correct payer.

6. Appeal the Denial if Necessary

  • If the termination was incorrect or if coverage was active, file an appeal with supporting documentation.
  • Attach insurance verification screenshots, policy documents, or authorization records to support the appeal.

How to Prevent Denial Code CO 27 in the Future

  1. Perform Real-Time Eligibility Verification
    • Verify insurance details before scheduling an appointment and before providing services.
  2. Update Insurance Information at Each Visit
    • Ask patients if their insurance has changed and confirm policy details before billing.
  3. Use Automated Eligibility Checking Systems
    • Implement software solutions that automatically verify insurance coverage.
  4. Train Billing Staff on COB Rules
    • Educate billing teams on handling insurance coordination properly to prevent denials.
  5. Maintain a System for Tracking Insurance Expirations
    • Set up alerts for patients with soon-to-expire insurance plans.
  6. Encourage Patients to Update Their Insurance Providers
    • Remind patients to update their employer or insurance provider if their policy changes.
  7. Maintain Open Communication with Payers
    • Regularly check with payers for any changes in policies or termination issues.

Conclusion

Denial Code 27 can be a frustrating issue, but it is preventable with proactive measures. By verifying insurance details, updating information regularly, and training billing staff, medical providers can reduce denials and ensure timely reimbursements. If a claim is denied under this code, promptly investigate the cause, correct errors, and resubmit or appeal the claim. By implementing these best practices, healthcare organizations can maintain a smooth and efficient revenue cycle.

Leave a Comment