How do I work my first denial step by step?
Quick Answer
Start with the balance and final ERA/EOB, identify the CARC/RARC, review claim history and payer status, decide who owns the problem, choose the correct resolution path, complete the action, then write a note that shows the money, research, action, and follow-up.
Step-by-Step Instructions
Confirm the actual balance you are responsible for
Look at the current insurance balance and patient balance. Do not assume the full billed amount on an EOB is the amount still outstanding.
Pull the final ERA/EOB
Review the payer decision line by line. Write down the CARC, RARC, paid amount, contractual amount, patient responsibility, and denied amount.
Read claim history before doing anything
Check whether the claim was already corrected, appealed, reprocessed, transferred, paid, recouped, or sent to another department. Do not duplicate work that is already pending.
Check payer portal and eligibility when relevant
Verify claim status, coverage, COB, authorization, and payer messages when the denial reason requires it.
Decide who owns the problem
Billing handles claim corrections and many administrative issues. Coding handles CPT/HCPCS, ICD-10, modifiers, NCCI, and code-pair decisions. Authorization handles auth issues. Registration handles demographics/eligibility. Appeals handles payer disputes when the claim is correct.
Choose one correct resolution path
Corrected claim, reconsideration, appeal, coding review, authorization follow-up, COB correction, patient responsibility, adjustment, or follow-up only. Do not perform multiple conflicting actions at once.
Reconcile the dollars after the action
Make sure the remaining balance makes sense after payments, adjustments, transfers, and patient responsibility. If the math does not reconcile, stop and research.
Write the account note
Document what happened, what you reviewed/did, why the action was correct, remaining balance, and what happens next. Include dollar amounts and submission/reference details when available.
Set follow-up
Use your organization’s required follow-up timeframe and status code. Pending claims, reconsiderations, appeals, and coding reviews should not disappear from the work queue.
Common Mistakes to Avoid
Working from the denial code without reading the actual EOB.
Assuming the billed amount equals the current balance.
Appealing a correctable claim.
Adjusting before checking for a valid recovery path.
Sending administrative denials to Coding.
Failing to check secondary insurance.
Not documenting amounts or follow-up.