PR-27 Denial Code: Patient Responsible - Coverage Terminated

What is PR-27 Denial Code

The PR‑27 denial code, which stands for "Patient Responsible ‑ Coverage Terminated," is issued by insurance payers when a claim is denied due to the termination of a patient's insurance coverage. This situation typically arises when a patient has not maintained their premium payments or their coverage has otherwise lapsed due to a change in employment or plan status.

This denial directly affects reimbursement as it places the financial responsibility on the patient rather than the payer. Medical coding professionals must understand this code to effectively manage claims and ensure that patients are informed about their financial obligations, potentially avoiding disputes and improving cash flow for healthcare providers.

Common Reasons for Denial

Denial codes often reflect recurring process issues that can be addressed with improved administrative practices. Below is a table outlining common reasons for the PR‑27 denial code.

Who Can Resolve PR-27 Denial Code?

Addressing the PR‑27 denial code requires a team effort from various professionals within the healthcare organization. Here are the key players involved:

• Billing Specialists: Responsible for submitting claims and managing denials, ensuring accuracy in billing practices.
• Healthcare Providers: Must ensure that they provide accurate patient information and documentation that supports claims.
• Administrative Staff: Play a crucial role in verifying insurance eligibility and maintaining communication with patients regarding their coverage status.

How to Resolve PR-27 Denial Code

Resolving the PR‑27 denial code requires careful steps to ensure that claims are properly resubmitted. Here are the best practices for handling this denial:

• Verify the Denial Reason: Call the payer and confirm the cause. Example: Verified missing prior authorization with Cigna.
• Correct and Refile the Claim: Fix the error and submit again. Example: Added required modifier and sent via clearinghouse.
• Submit an Appeal with Documentation: If denial persists, gather necessary documentation and submit an appeal. Example: Attached treatment notes and letter of medical necessity.
• Update Internal Processes: Implement changes to prevent future denials. Example: Set EHR reminder for pre-authorization for all sleep studies.

Financial Impact of PR-27 Denial Code

Disclaimer: The rates vary by payer, location, and claim complexity. We keep this article updated with industry averages.

Benefits of Proper Denial Management

Effective denial management can lead to significant advantages for healthcare providers. Below is a summary of key benefits:

Common Mistakes to Avoid with PR-27 Denial Code

Mistakes in handling the PR‑27 denial code can lead to claim rejections, delayed payments, and potential audits. Here are some common errors to avoid:

• Neglecting Insurance Verification: Failing to confirm current coverage can result in denied claims. Example: A billing specialist submits a claim without checking if the patient’s coverage is active.
• Inaccurate Claim Submission: Submitting claims with incorrect or missing information can trigger denials. Example: A provider forgets to include a necessary modifier for a procedure.
• Ignoring Patient Communication: Not informing patients of their coverage status can lead to confusion and dissatisfaction. Example: Administrative staff fails to notify patients about expired insurance before appointments.
• Delayed Follow-Up: Not promptly addressing denials can lead to increased resolution times and lost revenue. Example: A billing team does not follow up on denials for weeks, leading to cash flow issues.

PR-27 Denial Code vs Other Denial Codes

Understanding how the PR‑27 denial code compares to other similar codes is essential for effective denial management. Below is a comparison table:

Conclusion

The PR‑27 denial code signifies that a patient's insurance coverage has been terminated, placing the financial responsibility on the patient. Common causes include non‑payment of premiums and changes in employment, making it crucial for healthcare providers to verify insurance status before services are rendered. Addressing this denial requires collaboration among billing specialists, healthcare providers, and administrative staff to ensure accurate claim submission and resolution. By implementing best practices, such as timely verification and clear patient communication, healthcare organizations can effectively manage this denial and reduce its occurrence in the future.