Which type of code is used to indicate the reason for payment denial from insurance companies?

Adjustment reason codes are specifically designed to provide details about why a claim has been denied or why a certain amount was adjusted on a payment. These codes help billing and coding specialists understand the circumstances surrounding payment discrepancies and denials from insurance companies. This information is critical for correcting and resubmitting claims or for appealing denials when appropriate.

In contrast, claim codes generally refer to unique identifiers assigned to specific claims but do not explain the reasons for any payment adjustments. Procedure codes are utilized to describe the medical procedures performed and are not directly related to payment denials. Diagnosis codes provide information about the patient's health conditions and are essential for justifying the procedures billed but do not indicate payment reasons. Therefore, adjustment reason codes are the most relevant for indicating the reasons behind payment denials.