What’s the Difference? Clinical vs. Coding Denials and Why It Matters
For healthcare providers, nothing is more frustrating than a denied claim. Each denial represents not just a delay in payment, but a costly and time-consuming administrative burden. According to the American Hospital Association, hospitals face an average denial rate of 11% of total claims, with each denial costing an average of $118 to rework.
Categories of Denials
Denials fall into several categories, but two of the most common—and often confused—are clinical denials and coding denials.
Understanding the difference between these two is critical. A coding error might be fixed with a simple resubmission, but a clinical denial often signals a deeper issue with documentation or medical necessity, requiring a more complex and resource-intensive appeal.
Check the Infographic and White paper: Shift Focus from Denial Management to denial prevention for more info.
It’s also important to note that other categories of denials exist, such as:
Administrative/Technical Denials: Caused by missing patient data, incorrect insurance information, or claim form errors.
Eligibility Denials: Related to patients not being covered or eligible at the time of service.
Duplicate Claim Denials: Triggered when the same claim is submitted more than once.
Coordination of Benefits (COB) Denials: When multiple insurers are involved and billing order is incorrect.
Think of it this way:
Coding Denials are a "translation" problem—services aren’t translated into the correct billing codes.
Clinical Denials are a "documentation" problem—the record fails to justify medical necessity, regardless of coding accuracy.
Clinical Denials: The “Why” is Missing
Clinical denials occur when the patient’s medical record doesn’t provide enough evidence to support billed services. Often considered “hard denials,” they’re more challenging to overturn.
Common reasons:
Lack of Medical Necessity – Example: A payer denies a spinal MRI because clinical notes fail to document neurological deficits or failed conservative treatment.
Inadequate Documentation – Example: The physician’s note lists “shortness of breath” but omits vital signs, test results, or imaging findings.
No Prior Authorization – Example: An inpatient admission for elective surgery was performed without pre-approval, violating payer requirements.
Lack of medical necessity accounts for over 40% of inpatient denials.
Coding Denials: The “What” is Wrong
Coding denials are usually technical and easier to resolve. They stem from inaccuracies in translating clinical documentation into billing codes.
Common reasons:
Incorrect Codes – Example: Using ICD-10 code for “Type 1 diabetes” when the patient has “Type 2.”
Unbundling – Example: Billing separately for wound debridement and dressing when they should be billed under a single CPT code.
Incorrect Modifiers – Example: Failing to append modifier -59 when multiple distinct procedures are performed.
Timely Filing Issues – Example: A claim submitted after a payer’s 90-day filing window.
Coding-related denials make up roughly 25–30% of total denials, but have a significantly higher overturn rate.
The Core Difference
| Aspect | Clinical Denials | Coding Denials |
|---|---|---|
| Nature of Problem | Documentation & medical necessity | Code assignment & billing accuracy |
| Common Complexity | High – requires detailed clinical review | Moderate – often resolvable with corrections |
| Typical Resolution Time | Weeks to months | Days to weeks |
| Appeal Success Rate | ~35% (Change Healthcare 2023) | ~65% (Change Healthcare 2023) |
| Impact on Revenue | Higher financial risk | Moderate financial risk |
Why the Difference Matters
Recognizing whether a denial is clinical or coding determines the approach to prevention:
Clinical Denials: Implement Clinical Documentation Integrity (CDI) programs, train providers on payer requirements, and conduct concurrent reviews.
Coding Denials: Invest in coder education, use coding compliance software, and establish claim-scrubbing before submission.
Example in Practice
Case 1 – Clinical Denial: An inpatient heart failure admission denied for lack of documented ejection fraction results. Resolution required retrieving echocardiogram reports, revising physician notes, and submitting a full appeal.
Case 2 – Coding Denial: Outpatient cataract surgery denied due to a missing -LT modifier indicating the left eye. Resolution was a corrected claim submission within 48 hours.
By identifying denial types accurately and applying targeted strategies, healthcare organizations can reduce denial rates, improve cash flow, and free staff to focus on patient care rather than paperwork.
Partner with MBW RCM
At MBW RCM, we specialize in proactive denial management strategies tailored to both clinical and coding denials. Our team of CDI specialists, certified coders, and revenue cycle experts works alongside your staff to prevent denials before they happen and recover revenue from those that do.
Contact us today to schedule a free consultation and discover how we can help you safeguard your revenue, streamline your workflows, and keep your focus where it belongs—on patient care.
