How to Lower Denial Rates to Boost Revenue Cycle Performance

The Significance of Reduced Denial Rates

With the ever-evolving policies and structures of healthcare, revenue cycle managers must consistently adapt and implement novel strategies and technologies to avoid decreasing financial health. Reducing claim denial rates is essential for the improvement of revenue cycle management performance and optimization. According to Becker’s Hospital Review, claim denials can lead to a 5% annual loss of net patient revenue for healthcare organizations1. Additional time, costs, and efforts are then invested to rework denial write-offs and improve revenue, but healthcare organizations still fail to adequately revise or re-submit as many as 65% of these problem claims, says RevCycle Intelligence2.

Faster Claim Statusing

The revenue cycle management performance of hospitals and other healthcare organizations can be vastly improved through faster claim statusing, and the subsequent reworking of problem claims in a timely manner. To accelerate the retrieval of payor denial remarks, some healthcare organizations have hired additional staff who are responsible for manually contacting payors, determining claim statuses, and reworking denied claims, proving to be costly and inefficient. This method of manually checking claim status through web portals and lengthy phone calls with payors only wastes time and resources, and does not improve revenue cycle performance or workflow efficiency.

Instead, hospitals and healthcare organizations should implement automated claim status technologies and services that provide real-time, actionable claim status information. With these automated RCM technologies and services, it is now possible to receive payor denial remarks as soon as one day after claim submission, and weeks before the remittance is received. Aura Wayne (Supervisor of Patient Financial Services at Inova Health System) says, “this [technology service] expedites claim statusing quickly, identifies a denial as a write-off, adjustment, or self-pay, allowing problematic claims to be reworked within days after submission.”3 Receiving this accelerated adjudication information saves time and costs as clean claims are removed from work queues, with only problematic accounts shown and then promptly corrected and re-submitted. Denials are efficiently reworked without the expenditure of additional staff and resources.

Using Claim Status Automation Services and Data Analytics to Identify and Prevent Key Reasons for Denied Claims

Denial rates can be reduced by informing providers and staff of the many common and preventable reasons for initial claim denial, thereby instructing them in ways to avoid such denials in the future. A surprising number of providers repeatedly submit problem claims, which could be easily avoided or prevented with proper knowledge of the common reasons responsible for these denials. Claim status automation services provide hospitals and physicians with all available data information provided by the payors’ website, including the detailed line item denial information omitted from the standard ANSI 277. Data analytics can then be used to aggregate, evaluate, and report denial data, to ultimately identify the problems associated with the coding and submission processes of these claims. Such information is invaluable to the provider, as corrections can be made to greatly reduce denial rates, and therefore improve financial performance.



1. Gooch, Kelly. “4 Ways Healthcare Organizations Can Reduce Claim Denials.” Becker’s Hospital Review, 26 July 2016,
2. Belliveau, Jacqueline. “3 Best Practices for Hospital Claim Denials Management.” RevCycle Intelligence, 15 June
3. Wayne, Aura. MedX, 1 May 2018,