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Denials Management is Costing Some Revenue Cycles Millions

Analysis  |  By Amanda Norris  
   September 28, 2023

A new report underscores the significant financial burden that denials pose for organizations.

Revenue cycle leaders need to address denials management and embrace tech solutions, and they should have done so a long time ago as the financial implications of denials is huge.

According to a recent study, with more than 40% of surveyed providers losing over half a million dollars annually due to claim denials, and 18% losing more than a million dollars, the financial impact is substantial, the 2023 Plutus Health Revenue Cycle Management Challenges Index says.

For these reasons and more, 43 percent of respondents to the survey said denials management is among their top priorities this year.

Denials management wasn’t alone however, as healthcare organizations said other revenue cycle priorities this year include specific payer challenges, staffing, patient eligibility and benefits verification, prior authorization, claim submission, and patient collections.

The key insight here is that revenue cycle leaders must recognize the urgency of integrating and streamlining technology to bolster their processes. By doing so, revenue cycle leaders can enhance efficiency in filing claims, reduce errors, accelerate cash flow, gain access to valuable business analytics, and ultimately provide better patient care.

Here are a few other key takeaways from the report:

Claim denials are a costing organizations big time.

The report highlights that claim denials are still a top financial burden for healthcare providers. As mentioned, more than 40% of respondents reported annual revenue losses exceeding half a million dollars due to denied insurance claims, with 18% losing over a million dollars annually.

Embracing technology is a must, but it’s not always happening.

While technology has demonstrated its effectiveness in improving revenue cycle management processes, the survey indicates that many healthcare providers remain hesitant to adopt AI and RPA. The report emphasizes the urgent need for the organizations to embrace these technologies and says that those who have integrated AI and RPA report benefits such as improved efficiency, reduced errors, faster cash flow, and better access to business analytics, highlighting the tangible advantages of adopting these solutions.

Payers and staffing are still ranking high on the revenue cycle leader’s list of challenges.

Coming in closely behind denials management, 44% of respondents cited “specific payer challenges” as a top concern, and 41% said managing staffing needs is still a major issue. This suggests that healthcare providers should not only invest in technology but also address workforce shortages and consider a combination of internal and external support to optimize their payer relations.

Amanda Norris is the Director of Content for HealthLeaders.


Denials managment is a top priority for revenue cycle leaders.

Some providers even say denials are costing them millions. 

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