How to lower denial rates

Having healthy financials is crucial to ensure your practice has the right resources to keep things running smoothly. Part of that includes knowing your practice denial rate, or the percentage of claims denied by payers.

To calculate your denial rate, divide the total claims denied by the total claims submitted.

According to a recent Quest Diagnostics survey, 46% of physicians cited denials as their biggest pain point. These same participants shared their practice’s denial rates:

lower denial rates

The American Academy of Family Physicians (AAFP) says that 5-10% is the industry average, but less than 5% is more desirable. With approximately 75% of Quest Diagnostics respondents over that average, the AAFP estimate may be a little generous. Reducing denials is easily one of the best ways to improve your practice financials.

Why deny?

There are many reasons a claim is denied. Quest Diagnostics survey respondents said claims are most commonly denied for these reasons (multiple responses allowed):

reasons claims are denied

How to address the high rate of denials

A full revenue cycle management (RCM) solution offers the ability to track patient visits from registration and scheduling through final payment. These tasks are usually handled by a service for a percentage of collections or for a subscription fee. One advantage is that it automates numerous functions so that physicians and staff may focus on other work.

Some of the tasks RCM oversees can include:

  • Verifying patient information
  • Reaching out to an insurance company about a claim
  • Collecting patient payments
  • Reviewing claims from insurance companies

RCM can help prevent many of the problems physicians typically deal with in the revenue cycle, including denials. To learn more about how RCM can help your practice call 1.888.491.7900, or read our white paper, How to improve practice financials: A practical guide to revenue cycle management.


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