Busy federally qualified health centers (FQHCs) routinely encounter claim denials. Denial codes in medical billing identify why a payer rejected reimbursement, giving organizations the information they need to correct, resubmit, or appeal claims. In 2026, denials are increasingly influenced by automation, stricter validation rules, telehealth billing, and policy updates, making it more important than ever to understand the most common denial codes and how to respond. 

Denials are rarely random. Most follow predictable patterns tied to eligibility errors, missing or inaccurate data, authorization gaps, coding errors, or payer-specific rules. Recognizing these patterns allows FQHCs to protect revenue and improve claim outcomes. 

What Are the Most Common Denial Codes in Medical Billing? 

Up to 49% of claims are routinely denied for common reasons. To help you identify these reasons and adapt to coding problems, here are the most important codes to know, including factors affecting claim outcomes today. 

CO-4 Missing Medical Modifier 

Indicates the submitted procedure code is inconsistent with the modifier. Modifiers show specific information tied to the procedure, and missing or incorrect ones—especially for telehealth services—are flagged immediately by automated payer systems. 

CO-11 Coding Error in Diagnostic Code 

Suggests an incorrect diagnosis code or one not considered relevant to the billed service. Payers increasingly use AI to cross-check ICD-10 codes with procedures, so even small mismatches can trigger immediate denials. 

CO-15 Missing or Invalid Authorization Number

Most coverage providers require prior authorization. With more services requiring pre-approval, claims submitted without proper authorization are commonly denied. 

CO-16 Error or Lack of Information 

Broadly applied when claim data is incomplete or inaccurate. Automated systems now detect missing subscriber information, demographic errors, or insufficient documentation more quickly, emphasizing the need for thorough front-end verification. 

CO-18 Duplicate Claim or Duplicate Service  

Occurs when a payer believes the claim was already submitted. System errors or overlapping submissions can trigger automated denials, making careful claim tracking essential. 

CO-22 Coordination of Benefits Error 

Appears when another payer is considered primary. Eligibility verification is crucial, as automated checks can reject claims immediately if payer sequencing appears incorrect. 

CO-27 Insurance or Coverage Expired  

Triggered when a patient’s coverage lapses. Real-time eligibility verification helps prevent denials caused by expired insurance. 

CO-29 Time Limit Expired 

Denial occurs when claims are filed past the payer’s deadline. Workflow delays or slow claim processing can now result in automatic rejections. 

CO-45 Excessive Charges 

Indicates billed charges exceed payer-allowed amounts. Automated review tools detect overcharges, so it is critical to ensure fee schedules are followed closely. 

CO-50 Service Is Not Medically Necessary 

Denial occurs when documentation does not justify the service. Automated documentation checks increasingly compare clinical notes to billed services, so thorough clinical justification is essential. 

CO-97 Service Already Adjudicated  

Shows the service was previously paid or included in a bundled claim. AI-driven systems can now detect duplicates faster, preventing unnecessary resubmissions. 

CO-167 Diagnosis Not Covered 

Indicates the patient’s plan does not cover the diagnosis. Verification of diagnostic codes and coverage details is vital to avoid rejection. 

Why Denials Are Happening More Frequently 

Several industry trends are driving higher denial rates: 

• Automated payer systems flag discrepancies instantly
• Expanded prior authorization requirements
• Increased documentation scrutiny for medical necessity
• More complex telehealth billing rules
• Persistent front-end data errors, including eligibility and demographic information

Even small inconsistencies can now trigger immediate rejection. Understanding these drivers is essential to prevent lost revenue. 

Who Uses Denial Codes in Medical Billing?

Denial codes are a standardized communication tool used by payers and providers. They appear in electronic health records (EHRs) and remittance advice documents, providing clear explanations for rejected claims. 

Government payers like Medicare and Medicaid provide denial codes when claims are rejected. Commercial insurers use the same framework. These codes are critical for FQHC staff to identify why claims fail, whether due to missing information, coding errors, documentation gaps, or payer policies. 

Healthcare providers use denial codes to take corrective action, improve accuracy, and recover payment. Some denials are simple to resolve, such as missing data, while others require detailed documentation or appeals. 

Are Denial Codes Final? Can You Still Collect Payment? 

Denials don’t necessarily indicate a final decision. Many can be corrected, resubmitted, or appealed depending on category, filing deadlines, documentation, and payer rules. Prompt evaluation and action often determine whether payment is recoverable. 

Best Practices to Address Denials 

Effective denial management relies on speed, accuracy, and prevention-oriented workflows: 

• Work Quickly: Monitor denials consistently and investigate root causes immediately.
• Update Coding Knowledge: Keep staff trained on CPT, ICD-10, and payer rules.
• Keep Claims Clean: Review for missing elements, duplications, and inconsistencies before submission.
• Use Technology and Automation: Claim scrubbing, eligibility checks, and workflow tools reduce preventable denials.
• Analyze Trends: Identify patterns across denials to correct systemic issues rather than treating them as isolated incidents.

Work with a Reliable Billing Partner 

It’s challenging to stay ahead of the latest billing and coding trends. Work with a trusted billing partner to refine your strategy, capture every dollar, and keep the focus on patient care. 

To learn more about adapting to denial codes in medical billing, turn to Altruis. We’ll help you improve your medical coding and move more claims to successful resolutions.