Denial code 45 is when the charge for a service exceeds the maximum fee allowed by the payer. This adjustment cannot be the same as previous payments or reductions.
Denial code 45 is used when the charge for a service exceeds the fee schedule, maximum allowable amount, or the contracted/legislated fee arrangement. This means that the amount being charged for the service is higher than what is allowed or agreed upon by the payer. This denial code is typically used with Group Codes PR or CO, depending on the liability. It is important to note that the adjustment amount cannot be equal to the total service or claim charge amount, and it should not duplicate any provider adjustment amounts that have already been made as a result of prior payer adjudication.
Common causes of code 45 are:
1. Charge exceeds fee schedule: This code is often triggered when the healthcare provider's charge for a particular service or procedure exceeds the fee schedule set by the payer. It indicates that the provider has billed an amount higher than what is allowed or agreed upon.
2. Maximum allowable fee arrangement: In some cases, healthcare providers have negotiated fee arrangements with payers that set a maximum allowable fee for certain services. If the provider bills an amount that exceeds this agreed-upon fee, code 45 may be assigned.
3. Contracted fee arrangement: Similar to the maximum allowable fee arrangement, healthcare providers may have contracted fee arrangements with payers that specify the amount they will be reimbursed for certain services. If the provider bills an amount higher than the contracted fee, code 45 may be assigned.
4. Legislative fee arrangement: In certain cases, legislative regulations may dictate the maximum allowable fee for specific healthcare services. If the provider bills an amount that exceeds this legislatively determined fee, code 45 may be assigned.
5. Duplicate provider adjustment amounts: This code can also be triggered if the provider has already received payment or contractual reductions for the same service from a prior payer. It indicates that the adjustment amount claimed by the provider duplicates the payments or reductions already received.
It is important for healthcare providers to review their fee schedules, fee arrangements, and payment history to ensure accurate billing and avoid denials with code 45.
Ways to mitigate code 45 include:
- Review fee schedules: Regularly review fee schedules to ensure that the charges for services rendered are within the maximum allowable or contracted fee arrangement. This will help prevent charges from exceeding the approved limits and triggering code 45.
- Verify payer contracts: Double-check the terms and conditions of your contracts with payers to ensure that you are aware of any specific fee arrangements or legislated fee limits. By understanding these agreements, you can ensure that your charges align with the contracted fee arrangement and avoid denials related to code 45.
- Conduct internal audits: Implement a regular internal auditing process to identify any potential discrepancies in charge amounts. This will help identify any instances where charges may exceed the fee schedule or contracted fee arrangement, allowing you to rectify the issue before submitting the claim.
- Train staff on coding and billing guidelines: Provide comprehensive training to your coding and billing staff to ensure they are well-versed in the guidelines and regulations related to charge amounts. This will help minimize errors and ensure that charges are accurately calculated and aligned with the fee schedule or contracted fee arrangement.
- Utilize technology solutions: Implement revenue cycle management software or billing systems that have built-in checks and balances to prevent charges from exceeding the fee schedule. These systems can flag any potential discrepancies and provide real-time alerts to help you correct the charges before submitting the claim.
- Monitor payer adjudication: Regularly monitor the adjudication process of prior payers to ensure that provider adjustment amounts, including payments and contractual reductions, are accurately reflected. By identifying any duplicate adjustments, you can rectify the issue and prevent code 45 denials.
By implementing these strategies, healthcare providers can effectively mitigate code 45 denials and ensure that their charges align with the fee schedule or contracted fee arrangement. This will ultimately improve the revenue cycle management process and minimize potential financial losses.
The steps to address code 45 are as follows:
- Review the fee schedule or maximum allowable fee arrangement: Check the fee schedule or contracted fee arrangement to ensure that the charge does not exceed the allowed amount. If it does, adjustments need to be made to bring the charge within the acceptable range.
- Verify contractual agreements: Confirm that the charge aligns with any contractual agreements in place with the payer. If there are specific terms or limitations outlined in the contract, ensure that the charge adheres to those guidelines.
- Analyze prior payer adjudication: Examine the previous payer(s) adjudication to identify any provider adjustment amounts that have already been applied. It is crucial to avoid duplicating these adjustments when addressing code 45.
- Adjust the charge amount: If the charge exceeds the fee schedule or maximum allowable amount, make the necessary adjustments to bring it within the acceptable range. This may involve reducing the charge or negotiating with the payer to reach a mutually agreeable resolution.
- Apply appropriate group code: Determine whether to use Group Code PR or CO based on liability. Group Code PR indicates that the patient responsibility has been adjusted, while Group Code CO signifies that the patient is responsible for the remaining balance.
By following these steps, healthcare providers can effectively address code 45 and ensure that the charge aligns with the fee schedule or contractual agreements in place.
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