Avoiding Costly Claim Denials | A Real-World Provider Contracting Mistake

Avoiding Costly Claim Denials: A Real-World Provider Contracting Mistake
Medical billing is more than just submitting claims—it’s about ensuring every detail aligns perfectly with the provider’s contract to avoid costly denials. Recently, I was hired to investigate why a provider’s claims were repeatedly rejected for missing or incorrect information. What seemed like routine billing errors at first quickly turned into a much bigger issue that could have severely impacted the provider’s revenue.

The Initial Red Flags
Upon reviewing the claims, I noticed several common errors:

• Duplicate line items—one with a charge amount, one without.

• Modifiers placed incorrectly, affecting reimbursement.

• Wrong place of service codes, which can lead to automatic denials.

After correcting these issues, I resubmitted a claim as a test. It was denied again—for the same reason. That told me something deeper was wrong.

The Real Problem: A Contracting Error
At the start of any new provider relationship, I request their insurance contracts. This allows me to verify reimbursement rates and address any claim payment discrepancies.

When I reviewed the provider’s contract, I discovered a critical mistake:

• The provider had been contracted under their Social Security Number (SSN) instead of their Tax ID (TIN).

• They had submitted claims using the wrong NPI—they had both a Type 1 (individual) and Type 2 (organization) NPI, but their contract was under the Type 2 NPI.

Fixing the Claims & Securing Payment
Once I identified the problem, I:

• Corrected the claims to reflect the correct NPI and contracting information.

• Re-submitted all denied claims.
  Just two days later, I logged into the insurance’s claim portal and saw that the claims had been received and were already being processed for payment.

But the best part? The provider has started recouping money they didn’t think they were going to get. These were payments they had already written off as losses due to repeated claim denials. Now, instead of absorbing unnecessary financial losses, they are getting paid what they are owed.

All of This Happened in Less Than a Week
From identifying the problem to getting claims processed, everything was resolved in under a week of the provider onboarding with me. Without quick action, these issues could have caused months of payment delays and unnecessary stress.

Catching the Problem Early Saved Thousands
Thankfully, we identified these issues within the first 25 days of the provider’s contract going into effect. Had this gone unnoticed, the provider could have faced months of claim denials, leading to serious cash flow disruptions and administrative headaches.

The Takeaway: Always Double-Check Provider Contracts
This situation highlights an important lesson: just because a contract is approved doesn’t mean it’s correct. Providers and billers must verify:

• The correct Tax ID is used for contracting.

• The right NPI type (Type 1 vs. Type 2) is linked to the contract.

• Claims match the contract details exactly.

If you’re experiencing repeated denials and can’t figure out why, it might not be a billing error—it could be a contracting issue. A proactive review can prevent months of lost revenue.

Need a billing expert to audit your claims and contracts? Let’s talk.