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 one traces to an upstream cause — a registration error, a missing authorization, a coding choice, an enrollment gap — and the reason codes on the remittance are what identify which. X12’s own description of the reason-code list is the reason it can be read that way: the codes “describe why a claim or service line was paid differently than it was billed”.
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.