Breaking down claim denial rates by healthcare payer

Who denies more claims: Public or private payers?

Healthcare payers are broken down into two main types: public and private payers. Public payers are publicly funded by the federal government or state governments. Examples are Medicare, Medicaid, the Children's Health Insurance Program (CHIP) and the Veteran's Administration.

In contrast, private payers fund their own healthcare insurance plans, whether in collaboration with employers or through the government's Health Insurance Marketplace. Top private payers in the U.S. include UnitedHealth Group, Elevance Health, Aetna, Cigna and Humana. Private payers cover most Americans, with nearly two-thirds of residents covered by a plan through their employer.

Which type of payer denies the most claims? A 2023 analysis by KFF found that people covered by private payers were more likely to have denied claims than those covered by public payers. Approximately 21% of people with employer-sponsored insurance and 20% of those with marketplace insurance reported denied claims versus 10% of people with Medicare and 12% of people with Medicaid.

A 2024 survey of hospitals, health systems and post-acute care providers conducted by Premier Inc. also found that nearly 15% of medical claims submitted to private payers for reimbursement were initially denied. The rate was similar for Medicare Advantage (15.7%), in which private payers operate Medicare plans, and Managed Medicaid (15.1%), including plans run by private payers like UnitedHealth Group and Elevance Health on behalf of state Medicaid programs.

Medicare had the lowest percentage (8.4%) of initially denied claims, while Medicaid had the highest rate (16.7%).

The major difference between the KFF analysis and the Premier Inc. survey is that KFF polled consumers about claim denials while Premier Inc. polled healthcare providers. The methodologies yielded slightly different results; however, both highlight the higher rates of claim denials among private payers and the plans they manage.

Notably, accurate denial rates for most payers are difficult to discern. The data on insurer denial rates is largely unavailable to the public despite some state and federal access to some denials data through the Affordable Care Act.

Which private payers deny the most claims?

While the data is unavailable for all denied claims by commercial health insurance companies, an analysis from ValuePenguin uses federal data from CMS to give a ballpark estimate of private payer denial rates. CMS provides claims denials and appeals data for individual and family health insurance plans sold on the Marketplace. However, denial rates calculated by ValuePenguin do not account for claims from employer-sponsored plans, Medicare or Medicaid.

According to the analysis, AvMed and UnitedHealthcare tied for the highest denial rate, with both companies denying about a third of in-network claims for plans sold on the Marketplace in 2023, respectively.

Other insurance companies with the highest claim denial rates included Sendero Health Plans (28%), Molina Healthcare (26%) and Community First Health Plans (26%).

Additionally, the analysis found the denial rates for other major insurance companies, including Anthem (23%), Medica (23%) and Aetna (22%).

Private payers with the lowest claim denial rates

Kaiser Permanente has the lowest claim denial rate among major health insurance companies, which the analysis defined as brands offering Marketplace plans in seven states or more during the 2025 plan year. The California-based healthcare company denied just 6% of claims based on the available 2023 data.

Other private payers had even lower claim denial rates, though. Avera Health Plans, based in South Dakota, had the lowest denial rate at 1%, while PacificSource Health Plans, which serves the Northwest, had a 2% claim denial rate.

Among private payers with the lowest rates were Providence Health Plan (4%) and Sanford Health Plan (5%).

Claim denial overturn rates

While many payers have claim denial rates well above the current average of about 15% of claims, per the Premier Inc. survey, over half (54%) of claims initially denied by private payers are ultimately paid to healthcare providers. Payers might overturn a denial after a provider or consumer appeals their decision or provides additional information to support coverage.

Providers have a better chance of getting an overturned denial from private payers in the commercial space. Premier Inc. found that private payers overturned over 60% of initial denials. Medicare and Managed Medicaid overturned about 50% of initial denials, while Medicare Advantage overturned nearly 53% and Medicaid about 46%.

However, industry experts agree that overturn rates for claim denials could be higher. According to Premier Inc., providers only got their claim denials overturned by their payer partners after "multiple, costly rounds of provider appeals." Providers might not have the labor and tools to chase after each claim denial, leaving money on the table. Research suggests that denials management requires a high level of subject matter expertise, but many revenue cycle leaders report shortages of qualified workers.

Moreover, most hospitals do not automate any part of their denials management strategy. Automation can bridge gaps left by staffing shortages. Denial management has also been a strong use case for automation in healthcare, with AI and robotic process automation delivering positive results to many providers who implemented these technologies.

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.