Denials Prevention

Aligning Patient's Conditions, Medical Necessity and Reimbursement, Real-time

The Scale of the Problem

Across the country, between 10% and 20% of hospital claims are initially denied. Nearly 60% of those denials are never resubmitted, which means billions in reimbursement are lost permanently.

The American Hospital Association reported that hospitals spent $19.7 billion in 2022 on denial-related work, and that figure rose to $25.7 billion in 2023. On average, it costs about $57-$181 to rework each claim, and this does not include the revenue lost when claims remain unpaid.

Denials Are Preventable

Preventable Drivers of Claim Denials

86% and 90% of denials could be avoided with better admission workflows, real-time medical necessity reviews and better physician documentation.

Preventable Drivers of Claim Denials

Payor complexity adds another layer of difficulty. Each payor has unique timelines, authorization rules, and submission requirements.

Preventable Drivers of Claim Denials

Even small missteps with a single payor condition can trigger a denial and force hospitals into an appeals process that drains resources.

The Impact of Denials on Hospitals

Denials typically consume about 5% of net patient revenue, which amounts to roughly $5 million per year for an average mid-sized hospital. The rework is also expensive, with each denial costing about $57-$181 in staff time and resources. Smaller hospitals and Critical Access Hospitals feel this impact most acutely since they have thinner margins and fewer administrative staff to absorb the workload. For these facilities, sustained denial rates can create significant financial instability.

Revenue Risk

bServed's Denial Management Solution Starts with Prevention

Hospitals that reduce denials successfully tend to rely on several proven practices.

Securing concurrent authorizations in real-time prevents denials, protects reimbursement, and ensures every day of the stay is billable.
Real-time medical necessity reviews at admission and throughout a patient’s stay help prevent disputes before they occur.
Standardizing workflows and integrating payor notifications into the electronic medical record reduces errors that lead to denials.
Centralized denial teams with strong appeal result feedback loops have been shown to improve overturn rates.
Tracking and analyzing denial trends by payor and diagnosis gives hospitals leverage in negotiations and reveals systemic issues that can be corrected.

Programs like bServed’s apply these principles at scale. Hospitals using the model report 25% fewer denials and a 63% overturn rate on appealed claims, along with measurable improvements in admission approvals.

Proactive, Front-End Denial Prevention

Denials are costly, but they are also highly preventable.

Securing Authorizations in Real-Time.
Investing in aggressive front-end medical necessity review processes.
Embedding payor requirements into clinical workflows and databases.
Maintaining dedicated denial management teams.

In a healthcare environment where margins are increasingly thin, preventing denials is more than an operational improvement, it is essential for financial survival.