Denial Code 27 and 26

Denial Code CO 27 – (Expenses-incurred-after-coverage-terminated).

Denial Code CO 26 – (Expenses-incurred-prior-to-coverage).

Coverage related denials in healthcare claims processing are a common occurrence that can significantly impact providers and patients alike. When an insurance company identifies a coverage-related issue with a patient’s policy, they often use denial codes CO 27 or CO 26 to indicate that the claim has been denied.

Denial code CO 27 typically signifies that the patient’s coverage is terminated or exhausted, leading to the denial of the claim.

On the other hand, denial code CO 26 indicates that the expenses incurred prior to coverage were not covered by the insurance policy.

Denial Code CO 27:

When an insurance company denies a claim with denial code CO 27, it indicates that the healthcare provider rendered treatment to a patient after the policy of the patient had been terminated. This denial is based on the principle that services should only be provided when the patient’s insurance policy is active and covers the specific treatment received.

Insurance companies use denial code CO 27 to enforce the rule that healthcare services should not be provided when the patient’s policy is no longer in effect. This denial is intended to prevent healthcare providers from extending services to patients who are not covered by insurance, thus ensuring that treatments are only given to individuals with active insurance coverage

For example:

When a patient with Blue Cross Blue Shield (BCBS) insurance receives treatment from a doctor on 10/21/2023 without the provider checking eligibility, it can lead to complications due to the insurance effective period. In this scenario, the BCBS insurance was effective from 01/01/2023 but termed on 10/01/2023. The provider billed the claim to BCBS insurance without verifying the patient’s current eligibility status

In this scenario, given that the date of service (DOS) is 10/21/2023 and the BCBS policy was terminated on 10/01/2023, the insurance company will likely deny the claim with denial code CO 27. This denial code indicates that the expenses were incurred after the coverage had been terminated.

Denial Code CO 27 Solutions:

• First step is to verifying the eligibility of a patient’s insurance policy is a crucial first step in healthcare services. This can be done by visiting the insurance provider’s website and entering the necessary patient information to check the policy’s effective and termination dates. Alternatively, contacting the insurance company’s representative directly can also provide accurate and up-to-date information regarding the patient’s policy status
• Upon confirming the active status of the patient’s billed policy at the time of treatment, it is imperative to promptly communicate this critical information to the designated representative. Swift action should be taken to rectify any discrepancies in the claim by resubmitting it for reprocessing.
• In the event that a patient’s insurance policy was terminated at the time services were rendered, it is crucial for healthcare providers to promptly investigate alternative coverage options to ensure proper reimbursement for the provided services. This can be achieved by utilizing software systems that allow for the verification of other active insurance policies that may have been in effect at the time of service.
• If you found an active health policy at the time services are rendered, it is crucial to update and file the claim/service promptly to ensure accurate reimbursement.
• In the scenario where a patient does not have any other active health policy, it is appropriate to bill the patient directly for the medical services rendered

Denial Code CO 26:

When an insurance company denies a claim with denial code CO 26, it indicates that the patient’s policy was not effective at the time the service was rendered. This denial typically occurs when a healthcare provider performs a treatment before the patient’s coverage becomes active. In such cases, the insurance company is within its rights to refuse payment for the services provided.

For example:

Consider patient is having Aetna insurance and took the treatment from doctor on 02/29/2023. Aetna insurance is effective from 03/01/2023 and termed on 12/31/2023. Provider billed the claim to Aetna insurance without checking eligibility.

In the scenario provided, the patient received treatment on 02/29/2023, a day before their Aetna insurance became effective on 03/01/2023. It is important to note that services rendered before the insurance effective date might not be covered by the insurance plan.

The insurance company will likely deny the claim with denial code CO 26 indicating expenses incurred prior to coverage. This denial is based on the principle that services provided before the policy’s effective date are not covered under the insurance policy.

Denial Code CO 26 Solutions:

• Verifying eligibility to find a patient’s policy effective date requires careful attention to specific details. One crucial step is to obtain the patient’s insurance information, including their policy number and insurance provider. Once this information is available, contact the insurance company or utilize online portals provided by most insurers to confirm the patient’s eligibility status. This process involves inputting the patient’s information and can typically provide immediate results. When reviewing the patient’s eligibility status, pay close attention to the effective date of the policy.
• In situations where the date of service (DOS) predates the effective date of a health insurance policy, it is essential to thoroughly check the application details or directly reach out to the patient to verify if there was an active health policy in place at the time of service.
• If it is confirmed that there was an active health policy covering the date of service, the next step is to bill the claim to the active payer. By submitting the claim to the correct insurance provider based on the coverage available at the time of service, healthcare providers can ensure timely reimbursement and accurate processing of the claim.
• If no active policy is available, the provider can proceed with billing the patient directly for the services rendered.

Medical Billing Denials and actions – Top Denial codes Solutions (medicalbillingcycle.com)