Top 10 Reasons Medicare Denies Claims in 2026 (And What to Do Next)

Medicare Advantage insurers made nearly 53 million prior authorization determinations in 2024, and denial rates have climbed significantly in 2026. The combination of new AI-driven review systems, stricter coding requirements, and a massive restructuring of the Medicare Advantage market has created what industry analysts call a "perfect storm" for claim denials.

If you've recently opened a denial notice, you're facing a fundamentally different landscape than even a year ago. Understanding why claims get denied in 2026—and what's changed—is the first step toward preventing delays and resolving issues faster.

This guide breaks down the top 10 reasons Medicare denies claims in 2026, explains the systemic shifts driving increased denials, and provides clear next steps when you receive a denial.

How Medicare claim denials work 

When your healthcare provider submits a claim to Medicare, it undergoes a review to determine whether the service is covered and properly documented. A denial means Medicare won't pay for the service, while a delay means they need more time or information. Some notices request additional documentation before making a final decision.

Many beneficiaries receive Medicare Summary Notices (MSNs) that they mistake for bills. "Although it's on the EOB/ERA that 'This is not a bill,' patients often believe that's exactly what it is, a bill, even though it's literally just an explanation of how Medicare processed the claim," explains Debbie Hall, Director of Operations at Understood Care.

Key terms to understand:

• Denial: Medicare refuses payment (you may appeal)
• Rejection: The claim has errors and must be corrected and resubmitted
• Request for information: Medicare needs additional documentation before deciding

Top 10 reasons Medicare denies claims in 2026

1. Service not medically necessary (CO-50)

Medicare's definition of "medical necessity" has tightened considerably in 2026, particularly for high-cost procedures and diagnostic tests. Artificial intelligence-driven audits now scan clinical documentation for specific symptoms and evidence of failed previous treatments before approving advanced testing.

A service is considered medically necessary only if it's appropriate for your diagnosis, meets accepted standards of medical practice, and cannot be replaced with a less costly alternative. Documentation gaps—such as failing to link a diagnostic test to a covered ICD-10 code—remain the primary trigger for this denial.

Common examples: 

• Advanced imaging without documented conservative treatment
• Diagnostic tests without a clear clinical indication
• Therapy services beyond frequency limits.

2. Incorrect or outdated billing codes

The 2026 coding landscape introduced 487 new ICD-10-CM diagnosis codes, 38 revisions, and 28 deletions. Many changes specifically target chronic conditions that affect Medicare beneficiaries, creating what industry experts call the "specificity trap."

For example, the general Multiple Sclerosis code (G35) is no longer valid as of October 1, 2025. Providers must now distinguish between relapsing-remitting (G35A), primary progressive (G35B), and secondary progressive (G35C) MS, plus specify whether the condition is active or non-active. Using an invalid code results in an immediate automatic denial with no appeal path.

Common examples:

• Using a deleted or outdated ICD-10 code (such as the former general Multiple Sclerosis code G35) instead of the newly required subtype-specific code
• Reporting an unspecified diagnosis when lab results clearly support a specific stage
• Failing to document laterality (right, left, bilateral) for flank, pelvic, or limb pain

3. Missing or incomplete documentation (CO-16)

This technical denial occurs when claims lack required elements such as physician signatures, specific dates of service, or valid National Provider Identifier (NPI) numbers. Despite the shift to electronic record transmission, "unstructured" clinical notes often fail to reach the payer's AI reviewer in a format it can interpret.

Medicare sometimes gives very general, vague denial reasons when sending explanations of benefits to patients. "Some are clear-cut, like 'applied to deductible' or 'services not covered.' However, Medicare may put something on the patient EOB/ERA like 'please check coverage for these services,'" notes Hall.

Common examples: 

• Missing physician signature on orders
• Incomplete dates of service on claim forms
• Invalid or mismatched NPI numbers
• Clinical notes not attached to electronic submissions.

Services most affected: 

• Durable medical equipment (DME)
• Home health services
• Advanced diagnostic testing

4. Coverage limitations or frequency caps (CO-222)

Medicare enforces strict annual limits and therapy caps on services like physical therapy, home health, and certain diagnostics. In 2026, many beneficiaries may unknowingly exceed these caps because they're switching between plans with different supplemental benefit structures.

The "Great Retreat" of major insurers from certain Medicare Advantage markets has forced approximately 2.6 million beneficiaries into new plans for 2026—about 13% of all individual Medicare Advantage enrollees. These plan changes can reset coverage calendars unexpectedly or introduce new frequency limitations that catch both patients and providers off guard.

Common examples: 

• Physical therapy sessions exceeding the annual 80-visit cap
• Wheelchair replacement is requested before the five-year replacement period
• Duplicate DME orders within the same coverage period
• Laboratory tests are performed more frequently than Medicare guidelines allow

Common scenarios: 

• Physical therapy exceeding the annual cap
• Replacement timelines for durable medical equipment
• Frequency limits on diagnostic testing

5. Provider enrollment or credentialing issues (CO-B7)

If a provider's practice location, ownership, or tax identification number isn't perfectly reconciled with the Provider Enrollment, Chain and Ownership System (PECOS) database—Medicare's "source of truth"—the result is an immediate denial. In 2026, CMS strictly enforce 30-day reporting windows for these changes, leaving no grace period for administrative delays, as outlined in the current Medicare provider enrollment requirements.

This affects even properly licensed, qualified providers. The issue isn't whether they can legally provide care, but whether their enrollment information matches Medicare's records exactly at the time of service.

Common examples:

• Provider changed practice address but didn't update PECOS within 30 days
• Tax ID change following group practice merger not reported
• A new physician was added to the group practice before enrollment was completed
• Billing under the incorrect location NPI for multi-site practices

6. Prior authorization or advance approval issues (CO-197)

Despite faster adjudication timelines under the 2026 CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F), performing a service before receiving final approval remains a leading cause of non-reimbursable denials. According to the final rule published by CMS, standard (non-urgent) prior authorization requests must now receive a decision within 7 calendar days, while expedited requests must receive a decision within 72 hours.

To meet these rapid windows, payers have integrated high-velocity AI and automated algorithms into their review systems. These AI models scan documentation in milliseconds but often use "zero-tolerance" logic for missing data. If a clinician fails to include a specific clinical note, required signature or precise diagnosis code, the AI system may issue an automatic denial.

The shift from Preferred Provider Organization (PPO) models to Health Maintenance Organization (HMO) models has made this worse. In the HMO-heavy market of 2026, "retro-authorizations" are increasingly difficult to obtain, as AI systems are programmed to reject any service without a pre-service approval number.

Additionally, the Wasteful and Inappropriate Service Reduction (WISeR) model launched January 1, 2026, introducing prior authorization to Traditional Medicare for the first time in six states (New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington). The model targets high-cost services, including skin substitutes for chronic wounds, certain orthopedic pain management procedures, and electrical nerve stimulator implants.

Common examples

• Surgery was performed before authorization was approved
• Specialist visit without a valid HMO referral on file
• Medical equipment was delivered before the approval number was received
• Imaging studies were ordered urgently without an expedited authorization request

7. Coordination of benefits errors (CO-109)

Confusion between primary and secondary insurance—particularly involving retiree plans, employer coverage, or COBRA—continues to disrupt claim processing. Billing the wrong payer first accounts for a significant share of denials that require costly rework.

Many retirees mistakenly believe their former employer's group health plan is their primary insurer. Standard Medicare rules dictate that retiree coverage is never primary when Medicare eligibility exists. Providers who bill a retiree plan as primary will receive a denial, and by the time the claim is rerouted to Medicare, it may have exceeded the "timely filing" limit.

For working individuals age 65 and older, the rules depend on employer size:

• Employers with 20 or more employees: employer plan pays first
• Employers with fewer than 20 employees: Medicare pays first

"A lot of beneficiaries also don't know they can appeal. A denial will come in, and they're told 'no, sorry, that's it' when in fact they have that right," says Amanda Ledwich, Patient Advocate at Understood Care.

Common examples:

• Billing a retiree plan as primary when Medicare should be first
• An active employee over 65 with a small employer (<20 employees) billed incorrectly
• COBRA continuation coverage billed as primary after Medicare starts
• Working spouse's plan billed wrong when both have Medicare

8. Late or improper claim submission (CO-29)

Each payer has its own timely filing deadline. While Traditional Medicare generally allows one year from the date of service, many private Medicare Advantage plans are moving towards 90-day filing windows in 2026 to accelerate their internal accounting. Missing this window by even one day results in a non-appealable denial.

Important note: Beneficiaries are not typically responsible for timely filing—this is a provider obligation. However, understanding these deadlines helps explain why some claims can't be retroactively corrected.

Common examples:

• Claim submitted 95 days after service, when the plan allows only 90 days
• Hospital bill filed 13 months late (missing Traditional Medicare's one-year window)
• A claim is held in the provider's system pending documentation, and the deadline expires
• Corrected claim resubmitted after the timely filing period closed

9. Duplicate or conflicting claims (CO-18)

In 2026's cloud-based claims environment, identical claims are flagged instantly. The new ClaimsCore system, which CMS is developing to replace four legacy claims processing platforms, introduces "high-velocity" duplicate claim detection. Under the legacy system, a duplicate claim might not be flagged until batch processing, often days after submission. Now, identical claims for the same patient, date of service, and procedure code are rejected immediately.

This frequently occurs in multi-provider scenarios, such as surgery, where both the facility and the individual surgeon may inadvertently bill for the same bundled components of an episode.

Common examples:

• Both the surgeon and the hospital bill separately for the same surgical procedure
• Duplicate lab claims from the facility and the ordering physician
• Same date-of-service claim submitted twice due to a system error
• Overlapping billing for bundled versus unbundled services.

10. Eligibility or enrollment gaps (CO-27)

Plan switches, retroactive disenrollment, and delays in the Social Security administration's death reporting create "ghost" periods where a patient appears covered but technically isn't. These denials are often identified months after the service during post-payment audits.

The massive plan changes in 2026 have led to an immediate surge in claim denials in the first quarter, driven by what industry analysts call "eligibility chaos." Providers frequently treat patients in January who are unaware their network has changed, leading to out-of-network denials that are often non-appealable.

Common examples:

• Service provided during the gap between plan termination and the new plan's effective date
• Retroactive disenrollment due to non-payment of premiums
• Late Medicare Part B enrollment creating a coverage gap
• Deceased beneficiary's claims processed after the date of death have not yet updated in the system

What makes Medicare denials harder to navigate in 2026

Several systemic changes have increased both the volume and complexity of Medicare denials this year:

Automated adjudication systems

The integration of AI-driven review systems prioritizes speed and technical completeness over nuanced clinical review. These systems provide no grace period for data errors or missing signatures.

Market consolidation

Combined, UnitedHealthcare and Humana are exiting over 300 counties in 2026, as reported in industry analyses of the Medicare Advantage market contraction. This reduction in competition has created tighter networks and more restrictive authorization requirements.

Regulatory transformation

The CMS-0057-F rule mandates strict turnaround times (seven days for standard, 72 hours for urgent requests), forcing payers to use automated systems that may deny claims to clear adjudication queues within legal timeframes.

Unclear communications

Many beneficiaries receive notices they don't fully understand, leading to what Hall describes as treatment abandonment—when seniors stop taking medication or skip follow-up visits because they fear they can't afford the denied service.

When asked about the most overwhelming part of the denial process, Ledwich explains: "Having to do a Medicare appeal or any insurance appeal is a long process, and the letters need to be specific, and also getting the documents from their healthcare providers, who most times do not understand what is needed." This confusion often pushes beneficiaries to disengage from care altogether.

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What to do if Medicare denies a claim

If you receive a denial notice from Medicare, here are your immediate next steps:

Read the denial notice carefully

Look for the specific denial code (like CO-50 or CO-16) and the stated reason. This tells you whether the issue is medical necessity, documentation, coding, or eligibility.

Contact your provider's billing department

In many cases, the provider can correct and resubmit the claim or provide additional documentation to support medical necessity. They handle this process regularly and know the specific requirements.

Understand your appeal rights

You have 60 days from the date on your Medicare Summary Notice to file an appeal. Don't assume a denial is final—many are overturned with proper documentation. 

Gather supporting documentation

Collect medical records, physician notes, test results, and any other evidence that supports why the service was medically necessary.

Don't delay

The 60-day appeal window is strict. Even if you're gathering information, file the appeal within the timeframe and note that additional documentation will follow.

Keep copies of everything

Make copies of all correspondence, denial notices, and documents you submit. Track dates and confirmation numbers for phone calls.

Medicare has a five-level appeals process, starting with a redetermination request. Each level has specific timeframes and requirements, but the first step is always the same: act within 60 days.

How patient advocates help prevent and resolve denials

Navigating Medicare denials requires understanding complex billing codes, strict documentation requirements, and appeal procedures that change frequently. Patient  advocates specialize in this exact challenge.

According to Hall, when asked what families could do earlier to prevent denials: "Knowing your benefits, what Medicare covers and what it doesn't along with the knowledge that Medicare is an indemnity plan. This means that Medicare pays 80% of the regional contracted rate and unless the patient has a secondary or supplemental plan, they would be responsible for the other 20%."

Patient care advocates help by:

Verifying coverage before services

They confirm what your specific plan covers, preventing denials before they happen. This includes checking prior authorization requirements and understanding your plan's network restrictions.

Ensuring proper documentation

They work with your healthcare providers to make sure all required documentation is submitted correctly the first time, addressing the technical precision demanded by AI-driven review systems.

Managing coordination of benefits

They clarify which insurance should be billed first, preventing the costly rework that comes from billing sequence errors.

Handling appeals

When denials do occur, advocates know exactly what documentation Medicare requires and how to present your case effectively within the 60-day window.

Following up

Advocacy doesn't stop at filing paperwork. Patient advocates ensure appeals are processed, track status, and escalate when necessary.

The role of the patient advocate has become particularly critical in 2026's "zero-tolerance" environment, where data accuracy serves as the primary defense against revenue loss and coverage gaps.

Understanding Medicare denials is the first step to reducing them

Medicare claim denials increased in 2026 due to stricter coding requirements, automated review systems, and major market shifts affecting millions of beneficiaries. While the system has become more complex, denials are common and often fixable.

The key is understanding why denials happen, acting quickly when they do, and knowing when to seek help. Whether you're managing your own Medicare benefits or helping a family member navigate the system, remember that you have appeal rights and resources available.

Denials don't have to mean the end of coverage. With the right information and support, most issues can be resolved—you just need to know where to start.

Need help navigating a Medicare denial? Understood Care advocates specialize in resolving claim issues, filing appeals, and preventing future denials. Learn if you're covered or connect with a patient advocate today.

FAQs

What are the top 10 denials in medical billing?

The top 10 denials in medical billing are service not medically necessary (CO-50), incorrect billing codes, missing documentation (CO-16), coverage limitations (CO-222), provider enrollment issues (CO-B7), prior authorization problems (CO-197), coordination of benefits errors (CO-109), late claim submission (CO-29), duplicate claims (CO-18) and eligibility gaps (CO-27).

What are 5 reasons why a claim may be denied or rejected?

Five reasons why a claim may be denied or rejected are: service isn't medically necessary, billing codes are outdated or incorrect, required documentation is missing, service exceeds coverage limits, or prior authorization wasn't obtained before service.

Why would Medicare deny a claim?

Medicare would deny a claim for documentation issues, incorrect billing codes, outdated provider enrollment, services exceeding coverage limits, or coordination of benefits errors. In 2026, AI review systems reject claims instantly for technical errors.

What is the most common rejection in medical billing?

The most common rejection in medical billing is missing or incomplete documentation (CO-16)—including missing signatures, invalid NPI numbers, or clinical notes that don't reach automated review systems in a readable format.

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