There is no one insurer or health plan that has the highest overall claim denial rate across every situation. The denial rate differs significantly according to plan type, location, service category and how claims are billed.
Still, data from the ACA Marketplace reports and healthcare billing analyses indicates that some of the top insurers with higher-than-average claim denial rates are Oscar Health, Molina Healthcare, United Healthcare, and Ambetter. For practices struggling with these payers, professional insurance verification services are essential to catch eligibility issues before they lead to a denial.
In some instances, denial rates can be anywhere between 20% and 30% depending on the insurance product. It is more accurate to think of claim denial behavior as being determined by systems, policies, and administrative processes.
Why Insurance Companies Deny Claims
There are some patterns to the reasons for denials; they are not random. Most of the time denials happen because of administrative and procedural issues rather than medical necessity.
Most common reasons include:
- Prior Authorization Issues: Some services require prior approval; therefore, not having the appropriate authorization will trigger a denial. Many practices outsource prior authorization services to ensure this step is never missed.
- Coding Errors: Denials are common when an ICD-10 or a CPT code is incorrect. Precise medical coding services are the first line of defense against these technical rejections.
- Eligibility Problems: If the member does not have active coverage on the date of service, the claim will be denied.
How High Claim Denial Rates Affect Healthcare Providers
When hospitals, clinics, and urgent care centers experience high denial rates, they face many operational and financial difficulties. To combat this, a robust denial management service is required to appeal rejected claims and recover lost revenue.
Major impacts include:
- Revenue Delays: This causes disruptions in cash flow and a slower revenue cycle management process.
- Increased Administrative Workload: Billing personnel must work on correcting mistakes and submitting new claims.
- Reduced Growth Capacity: Resources are taken away from growth and allocated toward managing denied claims.
What Healthcare Providers Should Focus On Instead
Healthcare providers should concentrate on reducing their exposure to denial rather than worrying about which insurer denies the most. Implementing a full-suite medical billing service can automate these best practices:
- Verify Insurance Eligibility prior to every appointment.
- Complete Prior Authorizations before service is rendered.
- Perform Claim Scrubbing prior to submission to catch errors early.
- Monitor Denial Trends by payer to identify systemic issues.
Final Thoughts
A well-designed billing process can decrease claim denials across all payers and improve the financial situation of the provider. For specialized practices, such as pediatric billing or internal medicine billing, having a partner who understands specialty-specific denial patterns is the most effective way to ensure consistent reimbursement.
