Quick Explanation
Denial code 3 (PR-3) indicates that the patient is responsible for a fixed copayment amount required by their insurance plan for a specific service. This code is distinct from other patient responsibility codes because it specifically refers to a predetermined flat dollar copayment, unlike coinsurance or deductible amounts which are percentage-based or cumulative. It signals that the copayment was either not collected, not documented, or incorrectly billed, leading to an adjustment or denial of the claim portion related to that copayment.
Common Causes for 3
Denials with code 3 typically happen for the following specific reasons:
- Failure to collect the required copayment from the patient at the time of service.
- Incorrect or missing documentation of the copayment amount on the claim submission.
- Billing the wrong copayment amount that does not match the patient’s insurance policy requirements.
- Patient insurance coverage changes not updated, resulting in outdated copayment amounts being charged.
- Coding errors that misrepresent the service type, causing incorrect copayment calculations.
How to Prevent 3 Denials
To avoid receiving this denial in the future, implement these specific checks:
- Verify the patient’s insurance benefits and confirm the exact copayment amount prior to service.
- Collect and document the copayment at the point of service, ensuring clear communication with the patient.
- Regularly update patient insurance information and verify eligibility before claim submission.
- Use accurate and appropriate billing codes that reflect the services rendered to avoid copayment miscalculations.
- Implement staff training to reinforce the importance of copayment collection and documentation protocols.
Appeal Letter Template for 3
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: 3 - Co-payment Amount
Dear Appeals Department,
I am writing to appeal the denial of the above-referenced claim, which was denied with code 3: "Co-payment Amount".
This claim denial under code PR-3 should be reconsidered for payment because the copayment amount was either collected but not properly documented or the patient’s insurance policy terms have been updated, affecting the copayment obligation. According to payer policy guidelines, copayments are patient responsibilities; however, if evidence such as patient receipts, payment logs, or updated insurance benefit verifications can demonstrate that the copayment was satisfied or waived under specific plan provisions, the claim should be adjudicated accordingly. Additionally, any coding or billing errors that led to an incorrect copayment charge should be corrected and resubmitted with supporting documentation to ensure compliance with contractual and regulatory requirements.
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]
Stop Writing Appeals Manually
Clausea can read your medical records and generate custom, evidence-based appeals for denial code 3 in seconds.
Generate Appeal for 3 Now