How to Lower Your Medical Practice’s Denial Rate: 5 Expert Strategies

Show

Table of Contents

Claim denials are one of the biggest revenue leaks in healthcare. According to the MGMA, the average practice sees denial rates between 5–10%, and Becker’s Hospital Review notes that 90% of denials are preventable. Yet many practices treat denials reactively, chasing after appeals instead of putting in place processes that prevent them in the first place.

Reducing denials not only secures revenue but also improves patient satisfaction by minimizing billing errors and delays. Here are five expert-backed strategies to help your practice cut down denial rates.

1. Strengthen Patient Eligibility and Benefit Verification

One of the top reasons for claim rejections is inaccurate insurance information. Competitors in the RCM space often emphasize the importance of verifying patient eligibility in real time before the visit. Using automated eligibility tools and re-checking benefits for recurring patients can prevent costly errors such as submitting claims for inactive plans or uncovered services.

Pro tip: Train front-desk staff to confirm coverage details during scheduling and again at check-in.

2. Invest in Clinical Documentation Improvement (CDI)

Incomplete or vague documentation is another major cause of denials. Revenue cycle consultants often stress CDI as a core solution—ensuring that physicians capture all required details that support coding and billing. For more strategies, see our Clinical Documentation Improvement guide

For guidance on accurate medical documentation and compliance, practices can reference CMS’s official documentation guidelines, as well as the AHIMA Clinical Documentation Improvement Toolkit, which outlines standards and best practices to avoid costly mistakes.

Pro tip: Regularly audit clinical notes, and provide feedback to providers. Even small gaps (like missing modifiers or unspecified diagnosis codes) can lead to denials.

3. Code with Precision—and Keep Teams Updated

With ICD-10 and CPT codes constantly evolving, outdated coding knowledge can trigger avoidable rejections. Becker’s HR articles highlight that coding education is one of the most cost-effective ways to reduce denials.

Pro tip: Schedule quarterly coding refreshers for staff and consider specialty-specific coding workshops. Pair coders with providers to catch discrepancies before submission.

4. Implement Denial Management Analytics

High-performing practices don’t just resubmit claims; they look for patterns. Competitors like Change Healthcare often emphasize using analytics tools to track denial trends by payer, provider, or denial reason.

For broader insights on the impact of denied claims on healthcare systems, the American Medical Association’s resources on claim denials provide excellent benchmarks and best practices.

Pro tip: Create a “denial dashboard” that highlights the top 5 recurring issues. Then assign ownership for fixing those problems at the root.

5. Build a Proactive Payer Communication Strategy

Sometimes denials aren’t about your practice but about payer requirements changing without notice. Industry leaders point out that establishing relationships with payer reps can speed up issue resolution and provide early warnings about policy changes.

Pro tip: Assign a dedicated staff member to monitor payer bulletins and maintain direct contacts with insurance representatives.

Final Thoughts

Reducing denial rates is not a one-time project but a continuous process. Competitors in the revenue cycle space often focus on either technology or staff training alone—but the most effective approach is a combination of both. By verifying eligibility upfront, improving documentation, keeping coding sharp, analyzing denial data, and staying in sync with payers, your practice can shift from reactive appeals to proactive revenue protection.

To go even deeper, explore how to improve your practice’s performance with revenue cycle KPIs, strengthen accounts receivable management, and review our comprehensive revenue cycle services to minimize denials and maximize cash flow.

FAQs: Denial Management in Medical Billing

What is a good denial rate for medical practices?+

A healthy denial rate is usually below 5%. Anything above 10% suggests serious revenue cycle inefficiencies that need to be addressed immediately.

What are the most common reasons for claim denials?+

Eligibility errors, incomplete or inaccurate documentation, coding mistakes, missing authorizations, and late submissions are the top causes of denials.

How can technology help reduce claim denials?+

Automation tools such as eligibility verification, claim scrubbing, and denial analytics reduce manual errors and help flag potential issues before submission.

Should small practices invest in denial management solutions?+

Yes. Even small practices lose substantial revenue from denials. Staff training, coding refreshers, and RCM services can make a measurable difference.

How quickly should denied claims be appealed?+

Best practice is to address denials within 48 hours. Prompt appeals improve overturn rates and keep cash flow steady.

What role does staff training play in lowering denial rates?+

Front-desk, billing, and coding staff are the first line of defense. Ongoing training in payer rules, coding updates, and documentation standards helps reduce preventable errors.

---

Request for Information

Is your practice struggling with high denial rates or cash flow delays? Our team at MBW RCM specializes in helping medical practices streamline their revenue cycle and recover lost revenue. Request more Information today by filling the form below: