The first clean claim batch of the year is not the one that goes out on January 2. It is the one that goes out after somebody has checked that the system pricing, the scrubber edits and the payer setup all agree on what year it is. In the practices we audit, the January batch that goes out untouched produces two to three times the normal rejection rate, and the rejections are the boring kind: invalid code, missing fee, modifier no longer allowed with this pair.
None of that is a coding problem. It is a setup problem, and it has a fixed list of causes. This is the tune-up we run in the first ten business days of every year, in the order that catches the most money first.
Key takeaways
- January rejections are mostly setup problems with a fixed list of causes: stale fee schedules, last quarter's NCCI file, deleted codes in templates, payer policies that reset on the first, and patients whose plans changed.
- Check the scrubber's edit file version yourself; a scrubber on the 2025 Q4 NCCI file passes pairs Medicare now denies with CO-97 or CO-236.
- Retest with real claims: twenty clean December claims re-dated to January, plus five December denials the scrubber should now catch.
- Run eligibility on every January patient, established or new, and read the plan name and payer ID, not just the active flag.
- The rejection report is where the tune-up is graded; read it daily through January 31 and log each reason to its cause.
1. Fee schedules: every payer, every code, this year
Your practice management system prices each charge from a fee schedule. If the 2026 Medicare schedule is not loaded, expected reimbursement is wrong and every underpayment report for the quarter is noise. Load the MAC file for your locality, then check the commercial payers. Contracts that pay a percentage of Medicare need the 2026 base; contracts that pay a fixed schedule need the schedule the payer sent for 2026, which many payers post in December and some don't send until February. Record which payers are loaded and which are pending, and set a reminder.
The practice fee (what you charge) is a separate decision from what payers allow, but January is when most practices review it. A charge below a payer's allowed amount leaves money on the table because payers pay the lesser of charge and allowed. Run a report of codes where any payer's 2026 allowed amount exceeds your charge and fix those first.
2. NCCI edits: the quarterly update took effect January 1
The National Correct Coding Initiative publishes procedure-to-procedure edits and medically unlikely edits quarterly, and the first quarter file took effect January 1. Your scrubber vendor loads it, but ask when. A scrubber running Q4 2025 edits passes code pairs that Medicare will now deny with CO-97 or CO-236, and it may block pairs that are now allowed with a modifier. Pull the edit file version from the scrubber settings screen and confirm it says 2026 Q1.
While you are there, check the modifier indicator on your most common procedure pairs. An indicator of 0 means no modifier will separate the pair; 1 means modifier 59 or the X modifiers can; 9 means the edit was deleted. Practices that bill an E/M with a procedure on the same day live and die on this file.
3. Deleted and new codes in every template
We covered the CPT 2026 changes in a separate piece this week, so briefly: run the deleted list against the charge master, order sets and superbills; load the new codes with a fee rather than a zero; and confirm the HCPCS Level II update, which also took effect January 1 and includes new and discontinued G-codes and drug codes that the CPT list will not show you.
4. Payer policies that reset on January 1
Payer policies change in January because plan years reset. The ones that hit claims directly:
- Timely filing windows for new plan years, and any payer that shortened its limit for 2026.
- Modifier policies, particularly reductions for modifier 25 and 51 that some commercial payers introduced or expanded.
- Telehealth reimbursement policies, which for several commercial payers ended pandemic-era parity at year end.
- Prior authorization list changes; several large insurers announced reductions effective January 1 under last year's industry pledge, and a few added services.
- Lab and drug fee schedules, which reset separately from the physician schedule.
The payer portal or provider bulletin is the source. Assign one person to read the December and January bulletins for your top eight payers and write a one-line summary of each change that touches claims. That document becomes the scrubber change list.
5. Retest the scrubber with real claims
Take twenty claims from the last week of December that paid cleanly, change the dates of service to January, and run them through the scrubber. Read every edit it produces. An edit you don't recognize is either a new rule you need to learn or a setup error you need to fix. Then take five claims that were denied in December for a setup reason and confirm the scrubber now catches them. If it doesn't, add the edit.
Write the results down in a one-page log: claim number, edit fired, expected or not, action taken. It sounds bureaucratic, and it is the document that saves the argument in March when a physician asks why the 99214 with modifier 25 and a joint injection is denying at one payer and paying at another. In our experience a scrubber has somewhere between five and fifteen custom edits that the practice added years ago for a payer policy that no longer exists. January is when to find them, because they are the edits nobody recognizes on the retest.
6. Read the rejection report every day for three weeks
The clearinghouse rejection report is where the tune-up is graded. In a normal month we expect front-end rejections under two percent of claims submitted. In January, watch the reasons rather than the rate: invalid procedure code, procedure code and modifier mismatch, missing or invalid fee, subscriber not found (patients who changed plans at year end), and payer ID changes for plans that merged or renamed. Each reason maps back to one of the steps above.
| Rejection or denial reason | Usual January cause | Fix |
|---|---|---|
| CO-181 invalid procedure code | Deleted CPT or HCPCS code still in a template | Crosswalk and update the template |
| CO-4 procedure inconsistent with modifier | Payer modifier policy changed, or NCCI indicator changed | Update scrubber edit and coder guidance |
| CO-97 or CO-236 bundled | Q1 NCCI edit not loaded | Confirm scrubber edit file version |
| Subscriber not found or coverage terminated | Patient changed plans on January 1; old card scanned | Re-verify eligibility for every January visit |
| Charge below allowed or zero fee | New code loaded without a fee | Assign a fee to every active code |
7. Eligibility for every January visit, no exceptions
Plan changes cluster on January 1. Employer plans renew, marketplace plans change, Medicare Advantage enrollees who switched during the fall enrollment period start their new plan, and this year a large number of marketplace enrollees changed or dropped plans as the enhanced premium tax credits ended on December 31. Run a 270/271 eligibility check for every scheduled patient in January, not just new ones, and read the response for the plan name and the payer ID rather than just the active flag. A returning patient with a new plan is the most common January rejection we see.
If your team does not have time for the tune-up, that is one of the first things our medical billing service does for a new practice in January, and our RCM audit checks the same setup items when we look at a practice's first quarter.
Questions we hear
Our vendor says the fee schedules load automatically. Do we still need to check?
Yes. Automatic loads cover Medicare and sometimes Medicaid. They rarely cover your commercial contracts, and they never know which conversion factor your practice receives this year. Check the top ten codes for each payer by hand.
How long should the daily rejection review continue?
We never stop it, but the intensive version, where the billing lead reads every line, runs through the end of January. By then the setup problems are found. After that the rejection report goes back to a daily task for one biller with a weekly summary to the lead.
Should we hold all claims until the tune-up is finished?
No. Holding two weeks of claims costs more in cash flow than the rejections would. Send the claims, but run the retest on the first day, fix what it shows, and read the rejection report the next morning. A rejection is a claim that never reached the payer, so it can be corrected and resent the same day without affecting timely filing. The exception is a payer whose 2026 fee schedule you have not received and whose contract pays a fixed schedule; there, hold only that payer's claims until the schedule arrives, and only if the hold will be days rather than weeks.
What to do this month
- Confirm the 2026 Medicare fee schedule and each contracted payer schedule is loaded; list pending payers.
- Verify the scrubber shows the 2026 Q1 NCCI file.
- Complete the deleted and new code crosswalk in every template, including HCPCS Level II.
- Summarize January payer bulletins for your top eight payers in one document.
- Run the twenty-claim scrubber retest and the five-denial regression test, and log the results.
- Review the rejection report daily through January 31 and log each reason to its cause.
