Watch Out for Claim Denials Pulling Your Practice Down

Watch Out for Claim Denials Pulling Your Practice Down

Running a profitable healthcare practice is a challenging task. Wage inflation, rising overhead costs, lagging patient volume, and COVID-19 pandemic-associated uncertainty continue to put enormous pressure on healthcare practices’ bottom lines. Timely and accurate insurance reimbursement is the only source that can assist practice owners in surviving in such challenging times. Claim denials received from government and commercial insurance carriers halt the process of steady insurance collections. In this article, we will see how healthcare practices are severely affected by claim denials, the major reasons for claim denials, and how claim denials are pulling your practice down.

Deep Impact of Claim Denials

To understand the deep impact of claim denials, we referred to transparency data by the Centers for Medicare and Medicaid Services (CMS) on claims denials and appeals for non-group qualified health plans (QHPs) offered on This data was reported by insurers for the 2020 plan year, posted in a public use file in 2021, and updated in 2022. Some of the key findings of this data related to claim denials are as follows:

  • Denial rates are on the rise, increasing more than 20 percent over the past five years, with average claims denial rates reaching 10 percent or more.
  • An average increase in denials of 17 percent in 2021 alone.
  • Adding to the hit on the bottom line is the cost to rework or appeal denials, which averages $25 per claim for healthcare practices and a whopping $181 per claim for hospitals.

The horrifying fact is, the data suggest that consumers rarely appeal denied claims and when they do, insurers usually uphold their original decision. In 2020, consumers appealed just over one-tenth of 1 percent of denied in-network claims. Of the more than 42 million denied in-network claims in 2020, marketplace enrollees appealed fewer than 61,000, an appealing rate of about one-tenth of one percent. Though practices are losing their money in claim denials, they can have a systematic approach toward denial management analysis to recover denied insurance reimbursements.

Legion Healthcare Solutions can help.

Legion Healthcare Solutions is a leading medical billing company providing complete billing and coding services. Our team of revenue cycle experts helps to identify major denial reasons for any healthcare practice and will offer various preventive services. On the provider’s behalf, we take to follow up on every submitted claim and update the payer’s response as denied, or paid. We also highlight claims where the payer has underpaid the practice. Irrespective of the medical specialty of practice, key claim denial reasons are, out-of-network billing; billed for excluded service; lack of preauthorization or referral; and medical necessity.

Claim denials are part of the medical billing process and are hard to eliminate but systematic efforts keep them under check. While working with various practices, to minimize their claim denials, we adopt industry best practices. Some of them are listed below:


  • Documenting denials: As mentioned earlier, we take to follow up on every single submitted claim and document various claim denials. We document claim denials by payer, dollar amount, denial reason, and other applicable data.
  • Identify trends: After documenting denials, we are able to identify trends in the claim denial process with primary claim denial reasons.
  • Denial resolution: Once we identified the primary denial reasons, our denial management team starts working on the resolution process. In this process, our denial experts connect with payers and providers to find accurate denial resolutions.
  • Appeal: With an estimated denial resolution our team will appeal the claim with corrected/ added information and stay in touch with payers. Claims paid successfully are marked as paid while further discussion happens for unpaid claims.
  • Following deadlines: Failing to follow deadlines established by insurance company policies can affect claim filing. So every single process in denial management is time bound to ensure we are not missing the timely filling limit.
  • Healthcare practices might be losing a lot of money due to claim denials. Surviving and maintaining day-to-day activities may not be possible as these claim denials pull your practice down. It’s always advisable to take billing assistance from medical billing company as you are busy with patient care and day-to-day practice management activities. To know more about our denial management services or overall medical billing services, contact us at 727-475-1834 or email us at

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