Diagnosis Not Covered

Common Causes for 167

Denials with code 167 typically happen for the following specific reasons:

• Diagnosis code does not appear on the payer's approved coverage list for the specific procedure billed, even though the diagnosis is valid and the service is clinically appropriate—this is a policy-driven exclusion rather than a coding error.
• Incorrect diagnosis-procedure pairing where the submitted ICD-10 code, while valid, does not align with the payer's medical necessity requirements or LCD/NCD specifications for that particular service.
• Insufficient clinical documentation in the medical record to support medical necessity, causing the payer's automated system or medical reviewer to question whether the diagnosis truly justifies the service.
• Prior authorization expired or was not obtained within the specified timeframe—the authorization window may have closed before the service was rendered, triggering denial under this code.
• Non-specific or outdated ICD-10 coding where a more specific fifth or sixth character code is required by the payer's policy, or where the code has been retired and replaced with a newer version.

How to Prevent 167 Denials

To avoid receiving this denial in the future, implement these specific checks:

• Conduct pre-authorization verification by querying the payer's coverage policy database or LCD/NCD determinations before scheduling the service, specifically confirming that the anticipated diagnosis code is covered for the planned procedure.
• Implement a diagnosis-procedure validation matrix within your billing system that cross-references each CPT code with covered ICD-10 codes per payer, flagging mismatches before claim submission.
• Obtain and document prior authorization with explicit notation of the approved diagnosis code and service date window; establish internal alerts to prevent services from being rendered outside the authorization validity period.
• Ensure clinical documentation includes specific clinical indicators, test results, and physician notes that substantiate medical necessity—include a Letter of Medical Necessity for high-risk diagnoses or experimental/investigational services.
• Use the most specific ICD-10 code available (including all required characters) and verify annually that codes have not been retired; cross-check against the current year's ICD-10 code set to avoid obsolete codes.

Appeal Letter Template for 167

If you believe this claim was denied incorrectly, you can use the following template to submit an appeal.

[Your Practice Header]
[Date]

[Payer Name]
[Appeals Department Address]

RE: Appeal for Claim [Claim Number]
Patient: [Patient Name]
ID: [Patient ID]
Date of Service: [Date]
Denial Code: 167 - Diagnosis Not Covered

Dear Appeals Department,

I am writing to appeal the denial of the above-referenced claim, which was denied with code 167: "Diagnosis Not Covered".

We respectfully appeal this CO-167 denial and request reconsideration for payment. The submitted diagnosis code [ICD-10 code] is clinically appropriate and medically necessary for the service rendered on [date]. Our clinical documentation, including [specific test results/physician notes/imaging], clearly establishes the medical necessity for this procedure in treating the patient's condition. The diagnosis-procedure pairing aligns with established clinical guidelines and standards of care. Additionally, [if applicable: prior authorization was obtained on [date] for this specific diagnosis and service / the patient's plan documents do not explicitly exclude this diagnosis for this procedure]. We have verified that this diagnosis code is covered under the patient's benefit plan for this service category. We request that this claim be reconsidered for payment based on the clinical evidence supporting medical necessity and the coverage parameters of the patient's plan.

Attached please find:
1. A copy of the original claim.
2. The relevant medical records supporting the service.
3. [Any other supporting documents].

We respectfully request that you reprocess this claim for payment.

Sincerely,

[Your Name]
[Title]
[Practice Name]