Capitation Agreement

Common Causes for 24

Denials with code 24 typically happen for the following specific reasons:

• Services were rendered to a patient enrolled in a capitated managed care plan, and the provider billed the service separately instead of relying on the capitation payment.
• Claim was submitted to the wrong payer (e.g., Original Medicare instead of the patient's Medicare Advantage plan, which operates under capitation).
• Provider failed to obtain required prior authorization or referral for a service that is covered under the capitation agreement but requires pre-approval.
• Patient’s insurance information or coordination of benefits (COB) was outdated or inaccurate, leading to incorrect payer assignment.
• Provider is out-of-network for the managed care plan and therefore not eligible to bill for services covered under the capitation agreement.

How to Prevent 24 Denials

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

• Verify patient eligibility and capitation status at every visit using real-time insurance verification tools.
• Confirm the correct payer hierarchy and coordination of benefits (COB) before claim submission to ensure claims are sent to the appropriate managed care plan.
• Review managed care contracts and capitation agreements to understand which services are included and excluded from capitated payments.
• Ensure all required prior authorizations and referrals are obtained for services covered under managed care plans.
• Train billing staff to recognize capitated plans and avoid submitting claims for services already covered under such arrangements.

Appeal Letter Template for 24

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: 24 - Capitation Agreement

Dear Appeals Department,

I am writing to appeal the denial of the above-referenced claim, which was denied with code 24: "Capitation Agreement".

This claim should be reconsidered for payment as the service provided falls outside the scope of the capitation agreement or managed care plan. Documentation confirms that the service was not included in the capitated arrangement, as evidenced by the plan’s fee schedule and contract language, which explicitly excludes this type of service from capitation. Additionally, the patient’s coverage status was verified at the time of service, and all required prior authorizations were obtained. The denial appears to be based on an incorrect payer assignment or outdated coordination of benefits information, which has since been corrected. Therefore, the service is not subject to capitation and should be reimbursed according to the applicable fee-for-service contract terms.

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]