Denied claims are more than just administrative headaches—they’re silent revenue killers. For every claim that gets denied, there’s lost time, delayed cash flow, and often a reduced chance of ever collecting that payment in full. Unfortunately, many healthcare practices don’t realize how much money is being left on the table until it’s too late.
If you’re seeing a high volume of rejections or struggling with resubmissions, it’s time to take a hard look at the root causes—and how to fix them.
The Cost of Claim Denials
According to industry reports, the average cost to rework a denied claim ranges from $25 to $118, depending on the complexity and administrative overhead. Multiply that by hundreds of claims a month, and you're potentially losing thousands in preventable write-offs and operational waste.
Worse yet, over 60% of denied claims are never resubmitted, meaning that money simply disappears from your revenue stream.
Common Reasons for Denials
Understanding why claims are denied is the first step to preventing them. Some of the most common culprits include:
- Incorrect or missing patient information
- Outdated insurance eligibility
- Coding errors or mismatched diagnosis/procedure codes
- Lack of prior authorization
- Timely filing violations
- Duplicate claims
These errors may seem small, but they have a major impact on your bottom line—especially if they happen repeatedly.
How to Fix It: Proactive Denial Management
Here’s how to stop claim denials before they start—and what to do when they happen:
✅ 1. Implement a Front-End Verification Process
Ensure accurate patient information, verify insurance eligibility in real-time, and collect co-pays up front. Many errors start at registration—fixing them early saves time later.
✅ 2. Train Staff on Correct Coding Practices
Regular training on CPT/ICD-10 updates and payer-specific requirements helps reduce coding-related rejections. Consider coding audits to catch systemic issues.
✅ 3. Use Billing Software With Claim Scrubbing
Modern RCM platforms automatically flag errors before claims are submitted. This "claim scrubbing" can catch missing data, invalid codes, and formatting issues that lead to rejections.
✅ 4. Monitor Denials Weekly, Not Monthly
Track and categorize denials by reason, payer, and department. The sooner you identify a trend, the faster you can correct it. Set benchmarks—such as a denial rate under 5%—and hold your billing team accountable.
✅ 5. Automate and Streamline Resubmissions
Don’t let denied claims sit in limbo. Build a system that prioritizes and resubmits valid claims quickly. If you outsource billing, make sure your partner has a strong denial recovery process.
Final Thoughts
Denied claims may feel like a normal part of running a practice—but they shouldn’t be. By investing in smarter processes, better training, and the right tools, you can drastically reduce denials and recover more revenue. In today’s tight healthcare environment, every claim counts.
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Author: Kimberly Wiethoff
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