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Three-quarters of providers say claim denials increasing

The growing rate of claim denials poses a threat to healthcare revenue cycle management.

Sara Heath
By
Published: 26 Sep 2024

Three out of four healthcare providers say claim denials are increasing, posing a serious challenge for healthcare revenue cycle management, according to a recent survey from Experian Health.

That's 31 percent more than the number of providers saying the same in a similar Experian Health survey conducted in 2022.

Claim denials are a costly revenue cycle management problem for healthcare providers. In September 2023, a group of researchers found that claim denials can cost providers upwards of $500,000 in annual revenue.

This latest survey shows that the rate of claim denials is going upward, with three-quarters of respondents saying they happen more often.

Denials happen mostly because of information lapses, the survey continued. According to 45% of respondents, missing or inaccurate data is the root cause of claim denials. For 36% of respondents, authorizations are driving increasing claim denial rates. Finally, 30% said inaccurate or incomplete patient information drives the rising claim denial rate.

In addition to denied claims, providers cite a number of issues with payer reimbursement. For example, 77% of providers said payer policies change more often than they did in the past, up from 67% of providers who said the same in the 2022 survey. Two-thirds (67%) said time to reimbursement is increasing, compared to just 51% who said the same in 2022.

Finally, 55% of providers said in this year's survey that errors in claims are increasing. That's compared to 43% who said the same in 2022's survey.

To add insult to injury, providers express dismay with their revenue cycle management tools. Only about half said they think their organization's technology is sufficient enough to address today's current revenue cycle management demands. Meanwhile, fewer providers express confidence in using AI to automate revenue cycle management tools, down from 62% in 2022 to 31% in 2024.

Claim denials a perennial revenue cycle management challenge

Numerous surveys have shown that claim denials regularly bog down healthcare providers.

In March 2024, a Premier Inc. survey showed that 15% of medical claims submitted to private payers for reimbursement are initially denied. An average of 3.2% of denied claims also included those that were pre-approved through the prior authorization process.

A separate 2023 report from the American Hospital Association showed a 56% jump in Medicare Advantage claim denials between January 2022 and July 2023, and a commercial insurance claim denial rate jump by around 20%.

The issues causing claim denials are manifold, another survey showed.

In 2023, AKASA said that patient access and registration -- including eligibility errors and missing prior authorizations -- were the most common sources of claim denials. Lack of documentation to support medical necessity and missing or incorrect patient information were other common reasons for initial claim denials, the report showed.

Sara Heath has covered news related to patient engagement and health equity since 2015.

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