Understanding the Difference between Denied Claims & Rejected Claims

The terms denied claims and rejected claims are often confused, but they have distinct meanings in medical and optometric billing:

1. Rejected Claims 

A rejected claim is one that the insurance company refuses to process due to errors or missing information. These claims never enter the adjudication process (review for payment) because they don’t meet the insurer’s requirements.

🔹 Common Reasons for Rejection:

• Incorrect or missing patient information (name, date of birth, ID number)

• Invalid or outdated CPT or ICD-10 codes

• Mismatched diagnosis and procedure codes

• Errors in insurance provider details

  
  

How to Fix It:

• Identify and correct errors.

• Resubmit the corrected claim.

Example:A claim for an eye exam (CPT 92014) is submitted with an invalid insurance ID. The insurance company rejects it without reviewing the service.

2. Denied Claims 

A denied claim is one that the insurance company has processed but refuses to pay due to coverage issues or policy violations. Unlike a rejected claim, a denied claim was reviewed but didn’t qualify for reimbursement.

🔹 Common Reasons for Denial:

• The service is not covered under the patient’s plan.

• The claim exceeded the filing deadline.

• Lack of prior authorization for certain procedures.

• Medical necessity not established (incorrect diagnosis code for the service).

• The patient’s insurance was inactive at the time of service.

  
  

How to Fix It:

• File an appeal if the denial is incorrect.

• Provide additional documentation (e.g., medical necessity justification).

• Check patient eligibility before submitting claims.

Example:An OCT scan (CPT 92134) is billed for a routine eye exam diagnosis (Z01.00).

The insurance denies it because the diagnosis does not justify medical necessity.

Key Differences at a Glance

Feature	Rejected Claim 🚫	Denied Claim ❌
Processing Stage	Not processed (errors)	Processed but unpaid
Reason	Data entry errors, missing info	Coverage issues, policy violations
Fixable?	Yes, correct & resubmit	Sometimes, may require appeal
Example	Incorrect insurance ID	Service not covered by policy

Final Takeaway

• Rejected claims = Fix errors → Resubmit

• Denied claims = Review reasons → Appeal if necessary

  
  

Want help with appeal strategies for denied optometry claims? We are happy to give you our expert guidance to help you get your claims paid!