According to Becker's Hospital CFO, health organizations lose at least 1% of annual net revenue to claim denials. Some estimates place that amount as high as 4-5%. For a 300-bed facility, even that 1% loss can add up to $2-3 million each year.
The appeal process requires considerable time and resources. Industry experts report that one in five claims requires resubmission. Demographic and technical errors are the primary culprits behind claim denials, accounting for 61% of denials and 42% of write-offs. More than half of denials can be attributed to commercial payers, who have more complex data requirements than government insurers, resulting in additional time to locate errors and resubmit claims. Since it typically costs about $25 to rework one denial, all too often hospitals merely write them off. Fortunately, health organizations can adopt policies and practices that considerably enhance claims recovery by connecting data without requiring additional resources and complicated IT solutions that can disrupt workflow.