Insurance Billing 101: Whether you’re new to working with insurance or you're a seasoned pro, encountering denied claims is simply part of the process. While frustrating, these denials can often be easily resolved—and understanding how to respond is essential to ensuring you’re compensated fairly. 

In this article, we’ll walk you through:

• Common reasons claims get denied or rejected
• How to correct or void a claim
• Steps to resubmit a corrected claim
• How to communicate with clients about their financial responsibilities

Step 1. Understand why the claim was denied or rejected

Before you resubmit a claim, it’s critical to understand the root cause of the denial. You’ll find this information on the Explanation of Benefits (EOB), but keep in mind: the language isn’t always straightforward.

Top reasons claims are denied or rejected include:

• Claim wasn’t scrubbed: If you’re not using a clearinghouse, basic errors like blank fields or mistyped codes can cause a rejection. Scrub your claim thoroughly, then submit a corrected claim.
• System error: Sometimes, the issue is with the insurance payer’s platform. Double-check that you’re using the correct submission portal or clearinghouse.
• Diagnosis not covered: If the CPT or ICD code submitted doesn’t match covered services, the claim will be denied. You may need to try again with a different primary diagnosis code.
• Prior authorization or referral missing: Some plans require approval or a referral from a primary care provider before services are eligible. Without these, your claim may be legally non-billable to the client.

Pro-tip: Always document reference numbers when speaking with insurance payers. Add this information to your client’s chart for future appeals.

2. Resubmit the corrected claim 

Once you've identified the issue, it's time to resubmit the claim. Depending on the reason for denial, you may:

• Adjust a code or diagnosis
• Add missing information
• Correct typos or formatting errors

Important: Most insurance payers have a time limit for resubmissions—commonly 30 days from the initial denial.

Be sure to track your resubmission in your billing software, and follow up as needed to confirm it’s processed.

How to correct, void, and or re-submit claims with Healthie

Once you have discovered the reason your claim was denied, now it is time to resubmit. To do so, create a new claim in Healthie, fill out the information completely, and be sure to address whatever error caused your initial claim to be denied.  

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Under Miscellaneous Info, you will need to add a Resubmission Code and the Original Reference Number from the first claim. The resubmission code will always be 7. The original reference number is the Claim Number from your Explanation of Benefits. From there, resubmit, and be sure to track the claim’s progress once again. 

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3. Appeal the decision when necessary

If your resubmission is denied again, don’t give up—appealing the claim might still be an option.

Here’s how to move forward:

• Request an internal or external appeal
• Reference your documentation from benefits verification calls
• Include a letter of medical necessity from you or the client’s MD

Under the Affordable Care Act, clients have a right to an external review process for denied medical claims. Appeals don’t always succeed, but they’re often worth the effort when coverage should have applied.

4. Communicate your financial policies to clients

When clients use insurance, they might assume all services are covered. A rejected claim can be a surprise—and without strong financial policies in place, it can also be a relationship stressor.

Set expectations clearly with:

• A signed Financial Agreement Policy during onboarding
• Insurance verification before treatment whenever possible
• Transparent language explaining the client’s responsibilities:
  
  • Paying for deductibles, copays, and denied claims
  • Acknowledging whether you’ll resubmit claims on their behalf
  • Credit card on file for outstanding balances

You might also consider disclosing your self-pay rates and any potential discounts you offer for denied services. 

5. Collect client-owed responsibilities

At this point, you’ve made your financial policies clear to your client, attempted to resubmit the claim, but have still received a denial. It’s time to collect payment directly from the client (if allowed).

How to determine what to charge:

• Use the EOB to charge the “client responsibility amount” (this equals your contracted rate)
• Charge your full self-pay rate
• Charge your self-pay rate but offer a discount (i.e. 10% off)

Choose the financial structure that works best for your practice, be consistent with this policy, and ensure it’s clearly communicated to clients. One thing to note, for some insurance payers, it may be specified in your contract that if a client has benefits but has exhausted them, you must offer them your contract rate. Beyond that, your client is subject to your self-pay rates.

There are cases where you will not be able to collect any payment, typically indicated by an EOB that reads “client responsibility: none.” This may happen in instances where a referral was not obtained from your client’s MD, and your client cannot be penalized for this oversight. While it may be frustrating, it is not legal to charge clients if insurance indicates that they owe no responsibility.

Whether the claim was partially or fully denied, or there are other client-owed responsibilities, you’ll need to collect payment. 

Requesting payment after claim denials:

• Send the client an invoice with transparent communication about why they are receiving an invoice
• Give the client the opportunity to resolve the denied claim directly with their insurance beneficiary
• Use billing software that supports automatic invoicing and card-on-file collection to avoid services spending extended lengths of time in collections

Regardless of the financial policies that you put into place for your practice, being clear about them will help ensure positive interactions with clients, even if they’ve had a denied insurance claim.

Leverage Healthie to simplify billing and collect client payments

Getting a denied or rejected claim doesn’t mean you’re out of luck. In fact, most issues can be resolved if you:

• Troubleshoot the denial reason carefully
• Resubmit the claim correctly and on time
• Communicate proactively with clients
• Use a platform like Healthie to manage insurance billing tasks efficiently

By following these best practices and keeping your billing processes clean, you’ll reduce lost revenue—and spend less time chasing down payments.