Rising Claim Denial Rates Challenge Healthcare Providers

A recent survey from Experian Health indicates that healthcare providers are facing rising claim denial rates, prompting operational challenges in revenue cycle management and patient experiences. Denied claims complicate revenue flow, requiring staff to dedicate significant time to appeals. The issues around claim denials have intensified public discussions, especially following the death of UnitedHealthcare's CEO, Brian Thompson. Higher denial rates predominantly affect private payers, with patients under private insurance experiencing more claim denials than those with government-funded healthcare.

A study from KFF revealed that individuals with employer-sponsored insurance reported a 21% denial rate, whereas Medicare showed a lower rate of 10%. The information surrounding denial rates is often not publicly accessible, making it challenging to evaluate the performance of various insurers. An analysis by ValuePenguin found that companies like AvMed and UnitedHealthcare had the highest claim denial rates, denying approximately a third of in-network claims.

Despite these trends, about 54% of initially denied claims by private payers are eventually paid following appeals. Automation is recommended as a potential solution to enhance denials management but has not been widely adopted, leading to underutilization of resources to chase denied claims. Experts believe that increasing automation can relieve some of the burdens faced by healthcare providers, especially amidst staffing shortages in revenue cycle teams.