By the middle of March a practice has adjudicated most of its January claims and a good share of February. That is the earliest point in the year when a denial report means anything, because the first six weeks are always noisy: deductibles reset, plan IDs change, and payers roll out edits that nobody announced clearly. Pull the report now, group by claim adjustment reason code, and compare it to the same window last year.
We do this for every billing client in March. The pattern is a little different every year, and 2026 has a few features of its own: Medicare Advantage service area exits that sent patients back to traditional Medicare, the first quarter of the CMS-0057-F prior authorization timeframes, and two telehealth lapses that left held claims scattered across practice systems. Below is what we are seeing across independent practices, by category, with the fix for each. Your mix will differ. The method does not.
Key takeaways
- Eligibility denials (CO-27, CO-26, CO-31, CO-22) rose more than usual this January because of Medicare Advantage plan exits. The fix is a real-time check within two business days of every visit, read by a person.
- Authorization denials are steady in count but shifting toward "missing documentation" because plans now have a seven-day clock and would rather deny than pend.
- Modifier and bundling denials that cluster on one code are a scrubber problem; clustered on one provider, a template problem.
- A denial worked is money once. A denial prevented is money every month. Step five, rechecking in April, is the one everyone skips.
Eligibility and coverage denials are up
CO-27 (expenses incurred after coverage terminated), CO-26 (expenses incurred prior to coverage), CO-31 (patient cannot be identified as our insured) and CO-22 (this care may be covered by another payer per coordination of benefits) are the codes to look for. They rise every January. This year they rose more than usual in counties where Medicare Advantage plans withdrew or shrank their service areas for 2026, because patients who did not choose a new plan defaulted back to traditional Medicare and did not always tell the office.
The tell is a denial from the MA plan the patient had in 2025 for a January 2026 visit, with the claim never sent to traditional Medicare. The fix is a real-time eligibility check within two business days before every visit, including established patients, with the response read by a person, not just stored. Batch checks run the week before miss the plan changes that happen at the turn of the month. For the denials already on the books, rebill the correct payer; timely filing for Medicare is a year, and most commercial payers allow at least 90 days from the date of service.
CO-22 deserves a separate look because it is often a coordination of benefits problem that eligibility alone will not catch. A patient who turned 65 in January and kept the employer plan, a spouse whose retiree coverage became secondary, a child on two parents' plans: each produces a CO-22 until the primary payer is corrected in the patient's record and, often, until the patient calls the payer to update their own coordination of benefits file. Have the front desk ask "has anything changed with your insurance, including a second plan?" at every January and February visit.
Authorization denials are shifting, not falling
CO-197 (precertification or authorization absent) and CO-15 (authorization number missing, invalid or does not apply) are steady in volume across our clients but changing in shape. Since January 1, 2026 the CMS Interoperability and Prior Authorization final rule requires Medicare Advantage and most Medicaid managed care plans to decide standard requests within seven calendar days and expedited requests within 72 hours, and to give a specific reason for every denial. In practice the plans are meeting the timeframes, but two things have followed.
First, more requests are being denied for missing documentation rather than pended, because a pend counts against the plan's clock. Second, several plans changed which codes need authorization on January 1, in both directions. UnitedHealthcare removed some codes for gold card providers and added others; other national plans did similar things. If your authorization list is a printout from 2025, that is the problem. Rebuild it from each plan's current published list this month.
The CO-15 denials are worth a second sort. When the authorization number was obtained but the denial says it does not apply, the usual causes are a code on the claim that was not on the request, a date of service outside the authorized window, or a rendering provider different from the one named. All three are fixable with a corrected claim or a call, and all three point at the handoff between the authorization coordinator and the coder.
Bundling and modifier denials show a January code change nobody tested
CO-4 (procedure code inconsistent with modifier), CO-97 (payment included in another service) and CO-236 (procedure combination not compatible) tend to spike when the annual CPT and NCCI updates take effect and the claim scrubber is not updated at the same time. In 2026 the modifier denials we are seeing most are on office visits with a same-day procedure where modifier 25 was dropped by a template change, and on bilateral procedures where a payer moved from modifier 50 to RT and LT on separate lines or vice versa.
Pull twenty examples for each code and sort by CPT and by provider. If they cluster on one code, the fix is the charge master or the scrubber rule. If they cluster on one provider, it is a template. A dermatology client found in February that every 17000 series destruction billed with an E/M since January 1 had lost modifier 25; the EHR vendor's January update had reset the default. Forty-one claims, one setting, one afternoon of corrected claims.
Timely filing denials are the ones that should embarrass us
CO-29 (time limit for filing has expired) in a Q1 report almost always means a fall 2025 claim that was rejected at the clearinghouse and never resubmitted, or a held claim that nobody released. The telehealth lapses in October 2025 and again on January 31, 2026 created a batch of these in practices that held claims on their own initiative and forgot them. Pull every telehealth encounter from October 1, 2025 onward and confirm each has an accepted claim. Timely filing appeals succeed only with proof of an original timely submission, so keep the clearinghouse acceptance reports.
Where the numbers land
| Category | Codes | Typical share of Q1 denials we see | Owner of the fix |
|---|---|---|---|
| Eligibility and coverage | CO-27, CO-26, CO-31, CO-22 | 25 to 35 percent | Front desk, eligibility workflow |
| Authorization | CO-197, CO-15 | 10 to 20 percent | Authorization coordinator, payer lists |
| Coding and modifiers | CO-4, CO-97, CO-236 | 10 to 15 percent | Coder, charge master, scrubber |
| Missing or invalid information | CO-16 with RARC detail | 10 to 15 percent | Biller, claim edits |
| Medical necessity | CO-50, CO-56 | 5 to 10 percent | Provider documentation, LCD review |
| Timely filing | CO-29 | Should be near zero | Billing lead, rejection report |
| Provider enrollment | CO-B7, CO-183 | Small but expensive | Credentialing, PECOS and payer rosters |
The ranges are what we observe, not a benchmark to aim for. A practice with 40 percent eligibility denials does not have a billing problem; it has a front desk workflow problem, and no amount of appeal work fixes it.
One more sort that pays off: dollars per denial by category. Eligibility denials are numerous and cheap to fix. Medical necessity denials on infusions or imaging are few and expensive, and each one needs a clinician. A report ranked only by count will send your best biller to the front desk problem while a $4,000 infusion denial ages toward its appeal deadline.
How we work the report
- Export every denial line for dates of service January 1 to February 28, 2026 with CARC, RARC, payer, CPT, provider and billed amount.
- Group by CARC. Rank by dollars, then by count. Dollars find the expensive procedures; count finds the workflow problems.
- For each of the top five codes, read twenty claims. Write one sentence describing the pattern.
- Assign each pattern to a person and a change: a setting, a list, a template, a training session.
- Rework the claims, and then check the same code again in the April report to see if the change held.
Step five is the one everyone skips. A denial worked is money once. A denial prevented is money every month.
Questions we hear
Our denial rate is 11 percent. Is that bad?
Higher than we like. But the rate alone does not tell you much. Eleven percent that is mostly eligibility is a front desk fix that can be done in a month. Eleven percent that is mostly medical necessity on infusions is a documentation and payer policy project. Look at the mix before you decide how worried to be.
The payer gave a specific denial reason but it does not match our documentation. Now what?
Appeal, and quote the reason back to them. The specific reason requirement under CMS-0057-F is useful precisely because it gives you something concrete to rebut. A denial that says "clinical notes do not document failure of conservative therapy" is answered with the page of the note that does. We cover the appeal timeframes in a separate article this spring.
Should we outsource denial work?
Only if the outside team will also tell you what to change upstream. Working denials without changing the process is expensive. Our denial management service reports root cause by category every month for that reason, and the RCM audit starts with exactly this Q1 exercise.
What to do this week
- Run the denial export for January and February dates of service and group it by CARC, ranked by dollars and by count.
- Check that eligibility is being run within two business days of every visit and that someone reads the response, including the coordination of benefits fields.
- Rebuild the prior authorization code list for your top five plans from their current published lists.
- Pull twenty CO-4 and CO-97 denials and sort by CPT and provider to find the January template or scrubber change.
- Confirm every telehealth encounter since October 1, 2025 has an accepted claim on file.
