Denial Code 108: Rent/Purchase Guidelines - Fix & Appeal
Code 108 means that the claim was denied because the rent or purchase guidelines for the equipment or service were not met. This typically refers to situations where the payer has specific requirements for renting versus purchasing equipment, and those requirements were not satisfied. The 835 Healthcare Policy Identification Segment may provide additional information about the guideline that was not met.
Who Pays: Group Code Liability
For code 108, the group code can vary. If the denial is due to a contractual agreement with the payer, it will fall under CO (contractual obligation), meaning the provider must write off the amount and cannot bill the patient. If the issue is due to a patient-related requirement not being met, it may fall under PR (patient responsibility), and the patient can be billed.
Why Claims Get Code 108
- The claim was submitted for a purchase when the guidelines required rental first.
- The equipment was rented beyond the allowable period without transitioning to a purchase.
- The payer's policy requires prior authorization for the purchase, which was not obtained.
- The claim lacked documentation proving medical necessity for purchase over rental.
- Incorrect procedure code was used, not aligning with payer's rent/purchase policy.
How to Fix & Resubmit
- Verify the payer's rent/purchase guidelines in the policy manual or contact them directly.
- Check if prior authorization or documentation requirements were not met and rectify if needed.
- Review the 835 Healthcare Policy Identification Segment for specific guideline details.
- Correct any errors in the claim, such as procedure codes, and ensure alignment with guidelines.
- Submit a corrected claim or appeal with additional documentation as necessary.
Corrected Claim or Appeal?
If the denial results from missing documentation or a coding error, submit a corrected claim. For guideline disputes or unmet requirements, a formal appeal with supporting documentation is appropriate. If the denial is legitimate per contract, no action may be needed beyond write-off.
Preventing Future 108 Denials
- Review payer-specific rent/purchase guidelines before submitting claims.
- Ensure proper authorization and documentation are obtained prior to claim submission.
- Train staff on common payer requirements for equipment rentals and purchases.
- Implement a checklist for verifying compliance with rent/purchase policies before billing.