Why Are Our Claims Being Denied—and
Which Denials Are Preventable?

Claim denials are among the most persistent and costly challenges in healthcare revenue cycle management. The American Hospital Association has reported that denials increased significantly in recent years, and the cost to rework or appeal a denied claim far exceeds the cost of getting the original submission right. For a middle-market healthcare organization — whether a physician practice, ambulatory surgery center, or specialty hospital — even a modest improvement in denial rates can translate into meaningful revenue recovery.

The issue is not whether denials occur; every billing operation experiences them. The question is whether leadership knows which denials are preventable, what is causing them, how much they cost, and what systematic changes would reduce them. This analysis walks through the diagnostic process that Blackspire Advisors uses to help healthcare organizations answer those questions.

What Questions Should Leadership Ask About Denials?

Before an organization can reduce denials, leadership must understand what it is looking at. The following questions form the diagnostic foundation of any meaningful denial review.

What Is Our Actual Denial Rate?

Many organizations track denial rates inconsistently. Some count only initial denials. Others include partial denials or underpayments. Some exclude denials that are later overturned on appeal. A clear definition — consistently applied — is the starting point. Most denial reviews begin by establishing a single, reliable numerator and denominator and comparing the organization's rate to relevant benchmarks for its specialty, payer mix, and size.

Should We Measure by Claim Count or Dollar Value?

Both. A high denial count concentrated among low-dollar visits may indicate a registration or eligibility problem. A low denial count concentrated among high-dollar surgical or inpatient claims may represent a larger financial exposure. Leadership should review denial rate by both claim volume and total dollars at risk, segmented by payer, service line, and denial reason.

Are Front-End Registration Errors Driving Denials?

Registration and eligibility errors are among the most common — and most preventable — denial causes. Incorrect demographics, missing or expired insurance information, coordination-of-benefits issues, and failure to verify eligibility before the visit all create denials that could have been avoided at intake. A review of denial reason codes mapped back to registration workflows often reveals patterns that can be corrected with modest process adjustments.

Are Coding, Authorization, or Timely-Filing Issues Responsible?

Different denial categories require different interventions. Coding-related denials may point to coder training, documentation gaps, or provider documentation habits. Authorization denials may indicate that payer requirements changed without the practice updating its workflow. Timely-filing denials often reflect back-end process breakdowns — claims held too long, missing information not flagged early, or appeal deadlines missed. A well-structured denial analysis separates these categories so that leadership can direct resources to the highest-impact areas.

How Should Denial Reasons Be Categorized?

Most organizations receive denial reason codes from payers, but those codes alone rarely tell the full operational story. A more useful approach categorizes denials by root cause and where in the revenue cycle the breakdown occurred.

Which Denials Should Be Corrected First?

Not all denial reduction efforts produce equal returns. A prioritization framework helps leadership direct limited resources toward the most impactful opportunities.

How Should Leadership Track Whether Appeals Are Successful?

An effective denial management program measures not just denial volume but appeal outcomes. Key metrics include appeal win rate by denial category, average days to resolve appealed claims, and net recovery after appeal costs. Organizations that track these metrics can distinguish between denials worth appealing and those where the cost of appeal exceeds the expected recovery.

Appeal tracking should also inform prevention. When a particular denial reason is consistently overturned on appeal, the organization may be able to adjust its initial submission process to avoid the denial altogether — reducing both rework cost and revenue delay.

What Leadership Should Review

A meaningful denial review requires leadership to examine several categories of information. The following checklist organizes the areas that typically produce the most actionable findings.

Records and Data Needed for the Review

To conduct a meaningful denial analysis, the following records are typically requested. Not all are required at the outset; the review often begins with summary-level data before drilling into claim-level detail.

Do not send protected health information through unsecured channels. Blackspire will discuss secure document transfer before any detailed review begins.

Warning Signs the Issue May Be Material

When This Review May Be Relevant

A structured denial review may be particularly relevant when a healthcare organization is experiencing declining net collections, preparing for a transaction or valuation process, onboarding new providers or service lines, responding to payer contract changes, or simply lacking visibility into the root causes of its denial patterns. The review can also serve as a diagnostic step before investing in new billing technology or outsourcing revenue cycle functions.

When This May Not Be the Priority

If the organization's denial rate is already low and stable, if the practice is experiencing a more urgent operational crisis such as a system conversion, or if the volume of denials is so small that the cost of a structured review would exceed any reasonable recovery expectation, leadership may choose to defer this analysis. A denial review is most productive when there is meaningful financial exposure and organizational willingness to act on the findings.

Can Blackspire Help With This?

Yes. Denial analysis falls squarely within Blackspire's healthcare revenue cycle management service area. Blackspire can conduct an independent review of denial patterns, categorize root causes, quantify the financial exposure, and recommend a prioritized remediation path. Depending on the findings, Blackspire may coordinate with qualified coding, billing, or revenue-cycle specialists to implement the identified improvements. Whether the opportunity warrants further work depends on denial volume, dollar exposure, and the organization's readiness to address the contributing workflow issues.

What Blackspire Reviews

How the Blackspire Review Works

What Blackspire Needs From You

To begin a denial analysis, Blackspire typically requests summary-level denial data, AR aging reports, and a description of current registration, coding, and billing workflows. Information may initially be reviewed in aggregate form before examining individual claim detail. The revenue cycle leader, practice administrator, or CFO is typically the primary point of contact. Do not send protected health information through an unsecured general inquiry form; Blackspire will establish a secure path for any detailed records.

What Happens After You Request a Review

What Blackspire Does Not Do

Frequently Asked Questions

Related Blackspire Resources