Claims denials on the rise, complicating revenue collection, survey finds

Denial rates have steadily increased, with providers seeing rejection rates as high as 10% to 15%.

October 1, 2024, Jeff Lagasse, Editor

Healthcare claims processing is rife with inefficiencies and financial strains marked by operational bottlenecks, rising denial rates and increasing administrative burdens faced by providers, according to the new State of Claims 2024 report from Experian, a data analytics and consumer credit reporting company.

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As healthcare organizations aim to transition towards value-based care models, claims management remains a critical area in which inefficiencies can lead to significant financial losses. The findings underscore the urgency of improving revenue cycle management strategies as the industry moves into 2025.

Among the key trends is the rising rate of claims denials across the healthcare sector. Denial rates have steadily increased, with providers seeing rejection rates as high as 10 to 15%. This not only complicates revenue collection, authors said, but also leads to administrative overhead as healthcare organizations spend more resources on appealing and resubmitting claims.

Experian attributes this increase to several factors, including tighter regulatory scrutiny, complex billing requirements and payer policies that are continuously evolving. Coding errors, incomplete patient information and authorization issues are among the top reasons for denied claims, according to the report.

WHAT’S THE IMPACT?

Outdated technology and inefficient workflows are major contributors to the ongoing claims processing challenges, authors said. Many healthcare organizations are still reliant on legacy systems that fail to integrate effectively with electronic health records and payer platforms. This lack of integration creates data silos and hampers the real-time processing of claims.

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