Rising denial rates continue to be one of the biggest pain points for provider groups and the problem does not appear to be slowing down any time soon. In fact, according to a recent claims survey, providers said their denial rates rose by a whopping 31% between 2022 and 2024.
This challenge is affecting every part of provider group operations, leading to revenue losses, higher administrative expenses, delayed cash flow, and possible negative effects on the patient experience.
A comprehensive denial management strategy can reduce denials, recover lost revenue, and optimize the revenue cycle management (RCM) process. While there are many components involved in a denial management plan, the first and most important step is to prevent the denial in the first place.
Denial prevention strategies
1. Ensure accurate documentation
Insufficient or inconsistent documentation can trigger denials for medical necessity, level of service, or authorization errors. Providers must ensure that comprehensive and precise documentation, including the right diagnosis codes, procedure codes, and clinical notes, support the claim in a clear and complete manner.
Making documentation a part of the clinical culture, instead of an afterthought, is vital. To do this, practice leaders should model proper documentation habits, regularly communicate its value, design workflows in which documentation is done in real-time, and highlight staff who consistently display documentation excellence.
2. Verify insurance eligibility
Prior to appointments, it is important for staff to conduct a thorough insurance check to confirm coverage details, eligibility, and pre-authorization requirements for specific tests or procedures.
With more than 50% of the US population now enrolled in a high-deductible health plan, a reliable insurance eligibility verification process provides patients with clear information about their coverage. When this information is clearly communicated, they have a better understanding of the co-pays and deductibles they are financially responsible for. This transparency helps patients plan for out-of-pocket expenses and avoid billing surprises, improving their propensity to pay.
3. Invest in ongoing training and root cause analysis
Preventing claim denials starts with a proactive approach that combines continuous staff education with thorough analysis of denial trends. Regularly training your billing and coding team on payer-specific updates, CMS regulation changes, practice modifications, and newly introduced services ensures they stay equipped to submit accurate claims.
At the same time, routinely analyzing denial reports to identify recurring issues, such as coding mistakes or eligibility problems, helps uncover the underlying causes specific to your practice or specialty. By integrating these insights into your training and operational workflows, you can implement targeted, preventive strategies that reduce denials at the source rather than reacting to them individually.
4. Streamline the submission process
Implementing automated claim submission systems can reduce denials by improving accuracy of the claim data. By utilizing tools such as those that scrub claims, flag errors, and validate codes, problems are identified and corrected before claims are submitted, increasing the likelihood of payment.
In addition to automation, other streamlining techniques can provide value, including establishing clear protocols and coding practices, as well as conducting regular audits to identify and address errors or inconsistencies. The key is to always be looking for ways to streamline your entire RCM process to be more efficient, accurate, and timely.
Beyond prevention: the role of partnerships
Many clinical and technical denials can be prevented with a robust denial prevention program, but those that can’t need to be managed effectively. Oftentimes, internal teams find they need outside billing and revenue cycle support.
A recent MGMA report stated 36% of medical groups plan to outsource or automate part of their revenue cycle management in 2025, in part due to the workflows, compliance, and overall operational efficiency they offer.
There are several reasons why internal teams turn to dedicated partners whose sole focus is on physician group billing and revenue cycle management:
- Internal staff are already stretched thin and lack the time and resources for thorough claim review and follow-up.
- In-house teams often lack the advanced technological infrastructure and automation needed to customize workflows and efficiently coordinate a comprehensive denial management plan.
- Complex, annual coding and regulatory changes contribute to an already full and overwhelming workload.
- Finding staff with the right revenue cycle knowledge and experience is challenging, especially in smaller communities.
Physician-based RCM partners, like Health Prime, possess the specialized expertise, advanced technology, and dedicated resources to help prevent – and fight – denials. These types of high-quality partnerships can lead to improved cash flow, lower administrative expenses, and stronger financial outcomes.
Perhaps most importantly, a revenue cycle partner can significantly enhance the patient experience by providing faster billing cycles, clearer communication about their financial responsibilities, and fewer delays or denials due to coding or documentation issues. This efficiency enables physicians and staff to focus more attention on the patient, rather than paperwork.
If you want more information about how to reduce your denial rate, please drop us an email or complete a contact form.
