What is the function of a denial code and where can its description be found?

• A. To identify why a claim was denied; descriptions are found in payer remittance advice or EOB
• B. To submit a claim for a denied service
• C. To adjust CPT code assortment
• D. To determine patient eligibility

Answer: (A)

Denial codes explain why a claim was denied, and their descriptions appear on the payer’s remittance advice or Explanation of Benefits. This code–description pair is the quick, precise signal your billing team uses to identify the specific issue—whether it’s coverage limitations, missing or incorrect information (such as a wrong diagnosis or CPT/ modifier), timeliness, or a non-covered service. With that understanding, you can decide the next step: correct and resubmit, appeal, or adjust the claim in your system. The other options don’t fit because a denial code isn’t used to submit a denied service, isn’t about adjusting CPT code sets, and isn’t used to determine patient eligibility.