What does insurance disallowance mean?

Insurance disallowance refers specifically to a situation where the insurance company denies payment for a particular claim. This typically occurs when the claim does not meet certain criteria stipulated by the insurance policy, such as lacking proper documentation, being for a service not covered under the policy, or other reasons outlined in the policy agreement. This distinction is crucial as it directly impacts the financial responsibility of the patient or the provider, depending on the circumstances.

Understanding this concept is important for administrative assistants in healthcare, as it influences billing practices, patient communication, and overall revenue cycle management. Being aware of what constitutes a disallowance can help ensure accurate claim submissions and timely follow-up on denied claims.