Denial code 271 is for prior contractual reductions on a current payment schedule when deferred amounts were already reported. (Use with Group Code OA)
Denial code 271 is used when there are prior contractual reductions related to a current periodic payment as part of a contractual payment schedule, and deferred amounts have been previously reported. This denial code is typically used in conjunction with Group Code OA.
Common causes of code 271 are:
1. Prior contractual reductions: This code may be triggered when a healthcare provider has already received a payment reduction as part of a previous contractual agreement. This reduction is applied to the current periodic payment, resulting in a denial.
2. Deferred amounts previously reported: If the healthcare provider has reported deferred amounts in the past, this code may be used to indicate that those deferred amounts are now being applied to the current payment. This can lead to a denial if the provider has not properly accounted for these deferred amounts.
3. Contractual payment schedule: When a healthcare provider has a contractual payment schedule in place, this code may be used to indicate that the denial is related to a specific payment within that schedule. It suggests that the denial is a result of the terms and conditions outlined in the contract.
4. Group Code OA: The use of Group Code OA indicates that the denial is related to a prior contractual reduction and deferred amounts. This code is specific to this denial scenario and helps to categorize and communicate the reason for the denial.
It is important for healthcare providers to review their contractual agreements, payment schedules, and any previously reported deferred amounts to ensure accurate billing and avoid denials associated with code 271.
Ways to mitigate code 271 (Group Code OA) include:
1. Reviewing contractual agreements: Ensure that all prior contractual reductions related to a current periodic payment are accurately documented and reported. Regularly review and update contractual agreements to avoid any discrepancies or deferred amounts that may lead to denials.
2. Implementing robust documentation processes: Establish clear and comprehensive documentation processes to track and report any deferred amounts or prior contractual reductions. This will help in providing accurate information to payers and prevent denials associated with code 271.
3. Conducting regular audits: Perform regular internal audits to identify any potential issues or discrepancies related to prior contractual reductions. This will help in proactively addressing any concerns and ensuring compliance with payer requirements.
4. Enhancing communication with payers: Maintain open lines of communication with payers to clarify any questions or concerns regarding prior contractual reductions. Promptly respond to any payer inquiries and provide necessary documentation to support the accuracy of reported amounts.
5. Training and education: Provide ongoing training and education to staff involved in the revenue cycle management process. This will help them stay updated on payer requirements and ensure accurate reporting of prior contractual reductions, reducing the likelihood of denials associated with code 271.6. Utilizing technology solutions: Implement advanced revenue cycle management software or tools that can automate the tracking and reporting of prior contractual reductions. These solutions can help streamline processes, minimize errors, and improve overall efficiency in mitigating code 271 denials.
By implementing these strategies, healthcare providers can effectively mitigate code 271 denials and optimize their revenue cycle management processes.
The steps to address code 271 (Group Code OA) are as follows:
1. Review the patient's payment history: Examine the contractual payment schedule and any deferred amounts that have been previously reported. This will help identify any prior contractual reductions that may be related to the current periodic payment.
2. Verify the accuracy of the reported information: Double-check the accuracy of the payment history and contractual payment schedule. Ensure that all relevant information has been correctly recorded and reported.
3. Identify any discrepancies or errors: If there are any discrepancies or errors in the reported information, investigate the root cause. This may involve reviewing the patient's records, communicating with the billing department, or consulting with the relevant healthcare policy guidelines.
4. Take corrective action: Once the discrepancies or errors have been identified, take the necessary steps to rectify the situation. This may involve adjusting the payment schedule, updating the contractual terms, or addressing any other issues that may have contributed to the code 271 denial.
5. Document the actions taken: It is crucial to document all the actions taken to address the code 271 denial. This documentation will serve as a reference for future audits, appeals, or discussions with payers.
6. Communicate with the payer: If necessary, reach out to the payer to discuss the denial and provide any additional information or clarification required. Maintain open lines of communication to resolve the issue promptly and ensure accurate reimbursement.
By following these steps, healthcare providers can effectively address code 271 denials and work towards optimizing their revenue cycle management processes.
Get paid in full by bringing clarity to your revenue cycle
Subscribe to the
Healthcare Clarified newsletter
Get the latest insights on RCM and healthcare policy in your inbox
