How to Reduce Rejected Medical Claims

Guide · Last updated 22 August 2026

Medicare and private health billing claims can be rejected for many reasons. A consistent administrative process can reduce avoidable errors and make it easier to identify what action, if any, is appropriate when a claim is returned.

Why claims can be rejected

Services Australia identifies a range of possible causes, including item issues, benefit limits, eligibility, system problems and requests for additional information. Medicare Online and ECLIPSE return codes provide information about why a claim was rejected or assessed in a particular way.

1. Use accurate practitioner-supplied service information

The item claimed needs to reflect the service actually provided and satisfy applicable MBS requirements. The treating practitioner is responsible for the clinical service and billing information supplied or authorised. Billing administration should not alter clinical information simply to make a claim pass.

For episodes involving multiple services, check the current MBS rules applicable to the particular items rather than assuming that one multiple-procedure formula applies universally. See our general guide to MBS item numbers.

2. Check referral requirements where applicable

Referral requirements and validity depend on the type of service and circumstances. Where a referral is required, ensure the relevant referral information is available and consistent with current Medicare requirements before lodging the claim.

3. Verify patient and provider information

Incorrect or incomplete patient, claimant, provider, service-date or other required data can lead to rejection or delay. Use current information and the provider number for the applicable practice location.

4. Check private health fund and claiming arrangements

For privately insured admitted episodes, applicable insurer participation, provider arrangements and claiming requirements should be confirmed. Requirements can vary by fund and claiming pathway. See our health fund registration information and registration guide.

5. Lodge promptly and check applicable time limits

Do not rely on a blanket time-limit assumption for every claim. Claiming rules can depend on the service date, pathway and circumstances. Prompt billing and early backlog review reduce the risk of older services becoming difficult or ineligible to claim. Services Australia reason codes should be checked when an older service is rejected.

6. Review inpatient claim information across relevant payers

For inpatient episodes, ensure the administrative information supplied for the relevant claiming pathways is internally consistent. Medicare and private health insurer requirements are not identical, so each returned message should be assessed according to the payer and claim type involved.

Use rejection information as a feedback loop

When a claim is rejected, identify the reason or return code first. Depending on the message, the appropriate action may be to correct administrative information, obtain further information, use another claiming pathway, contact Medicare or the fund, or resubmit when appropriate. Repeated return codes can also highlight a workflow issue worth correcting.

Our rejected claim recovery service provides administrative follow-up for rejected and outstanding claims based on practitioner-supplied or authorised information.