More than 30% of hospitals are near the ‘danger zone’ of denial rates

Written by Jeff Lagasse and Published on Healthcare Finance News:

Hospital claim denial rates have hit new highs, with a 20% increase in those rates over the past five years, suggesting that better claims denial management processes are necessary, finds a new survey from research firm Harmony Healthcare.

The ongoing COVID-19 pandemic has only made the trend worse, as 33% of hospital executives report average claims denial rates of 10% or more. Nationally, hospitals are facing average denials rates between 6 and 13%, which hospital leaders say is nearing the “danger zone.”

Broken down even further, 31% of hospital executives reported average denial rates of less than 5%; 20% reported rates of 5 to 7%; and 16% reported rates between 8 and 10%.


The public health emergency has diverted some attention away from this issue, but with the crisis beginning to pass, many hospitals and health systems are ready to recommit to lower denials, as it’s seen as a facet of achieving financial recovery.

Research showed that about 85% of denials are preventable, but successfully preventing them requires strengthened leadership and improved skills of hospitals’ prevention and recovery teams. Hospital¬†reimbursement¬†leaders reported a variety of high-dollar concerns when it comes to denials and their strategies in preventing them.

Thirty-two percent of respondents cited their top concern as coding; 30% cited medical necessity acute IP; 20% cited the front end; and 18% cited clinical validation denials.

Since payers continue to deny claims, healthcare facilities and their revenue cycle teams need to focus on finding and correcting systemic issues, the report found. A total of 131 hospital executives responded to the LinkedIn survey conducted from April 27 to May 20.