Why Your Denial Rate Might Be Double the Industry Average (And You Don’t Even Know It)
Why Your Denial Rate Might Be Double the Industry Average (And You Don’t Even Know It) August 23, 2025 Healthcare Revenue Cycle Management (RCM),Uncategorized Most physicians assume their billing process is “good enough.” Claims are submitted, payments eventually come in, and the practice keeps running. But here’s the shocking truth: denial rate double the industry average — or even triple — the industry benchmark, without even realizing it. And those denials are quietly eating away at your revenue. What’s the Industry Benchmark? According to the Medical Group Management Association (MGMA), a healthy medical practice should have a denial rate between 5–7%. But when we audit practices, we often see denial rates in the 15–20% range. That means nearly 1 out of every 5 claims is being denied. Why High Denial Rates Go Unnoticed So why don’t doctors notice? Because denials don’t always appear as lost money right away. Instead, they show up as: Claims “pending” for weeks or months. Partial payments (underpayments) without explanation. Claims written off by staff to save time. Resubmissions that never get followed through. In short: denials hide in plain sight. Why Denial Rate Double the industry average Incorrect or Incomplete Patient Data (missing DOB, insurance info, etc.) Coding Errors (wrong modifiers, outdated codes). Eligibility Issues (patients not verified at check-in). Untimely Filing (missed payer deadlines). Weak Follow-Up Systems (denials left unworked). Each of these is fixable, but only if you know your denial numbers. A Real Case Example We recently audited a mid-sized practice that believed their denial rate was “around 7%.” Reality: It was 18%. In just 6 months, they had $300,000 in unpaid claims sitting in accounts receivable. After fixing their workflow, their revenue jumped by 22% without seeing a single extra patient. How to Take Control of Your Denials Here are 4 steps to bring your denial rate under control: Measure It: Run monthly denial reports — know your % exactly. Analyze Patterns: Identify top denial reasons and address them at the root. Appeal Aggressively: Don’t accept denials as lost revenue. Get Expert Support: Professional RCM partners like Revenue Care MD track, appeal, and recover denials so your practice gets every dollar earned. Frequently Asked Questions What is a “denial rate” in medical billing? The denial rate is the percentage of claims rejected or not paid by insurance companies out of the total submitted. What is the industry benchmark for denial rates? According to MGMA, a healthy denial rate should be between 5–7%. Anything higher signals revenue leakage. Why do many practices not realize their denial rate is too high? Because denials often hide as pending claims, partial payments, write-offs, or unworked resubmissions — making the problem less visible. What are the most common reasons for claim denials? Incorrect patient data, coding errors, eligibility issues, late claim submission, and weak follow-up systems. How much money can high denial rates cost a practice? If denials rise from 5% to 15% on $100,000 monthly billing, that’s $120,000 lost per year — or over half a million in 5 years. How can practices reduce their denial rate? By tracking denial reports monthly, fixing root causes, appealing aggressively, and partnering with RCM experts for proactive management. How does Revenue Care MD help with denials? They provide denial audits, track claims daily, appeal unfair denials, and recover hidden revenue so practices can maximize cash flow. Final Thoughts High denial rates are silent killers. You may not see the damage right away, but over time they bleed practices dry. At Revenue Care MD, we help practices cut denial rates in half and recover hidden revenue. Get a free denial audit today and see how much money your practice could be leaving on the table. Share This : Author Agnes Doyle Healthcare Revenue Cycle Expert at Revenue Care MD. Passionate about helping medical practices maximize revenue and reduce billing errors. Recent Posts The Revenue Trap: How Growing Patient Volume Can Actually Make You Lose Money 26 Aug 2025 Why Most Medical Practices Are Sitting on Uncollected Gold Without Realizing It 26 Aug 2025 The Untold Revenue Secret: Why Practices with the Same Patients Earn 40% More 26 Aug 2025 How Just 1 Billing Error Per Day Can Cost a Practice $50,000 Annually 26 Aug 2025 Have Any Question? Have any questions? We’re here to help you with the right answers. +1 (254) 268-1617 info@revenuecaremd.com
5 Revenue Cycle Mistakes That Cost Practices Millions Every Year
5 Revenue Cycle Mistakes That Cost Practices Millions Every Year August 23, 2025 Healthcare Revenue Cycle Management (RCM),Uncategorized Running a successful medical practice isn’t just about treating patients — it’s also about making sure you actually get paid for the work you do. Yet, studies show that most practices lose hundreds of thousands of dollars every year due to avoidable revenue cycle mistakes. The shocking truth? These mistakes are so common that many physicians don’t even realize they’re happening. Here are the top 5 revenue cycle mistakes silently draining your practice’s income: 1. Ignoring Denials and Write-Offs Most practices treat denials as the “cost of doing business.” But every unappealed denial is lost money that could have been collected. Industry benchmark: Denial rate should be < 5%. Reality: Many practices sit at 15–20%, and don’t track it. That’s like working 1 out of every 5 days for free. 2. Inaccurate or Incomplete Coding Even small coding errors can cost thousands: Downcoding = lower reimbursement. Upcoding = compliance risk and penalties. Missed codes = services performed but never billed. Without regular coding audits, practices unknowingly leave huge gaps in revenue. 3. Weak Patient Collections Did you know that over 50% of patient balances go uncollected nationwide? No clear payment policies. Lack of digital payment options. Patients not reminded properly. This doesn’t just hurt revenue — it also damages the patient–provider relationship. 4. Lack of Financial Visibility Many physicians only look at the total collections, but not the details behind them. What’s your denial rate? Average days in A/R? Percentage of underpayments? Without transparency, revenue leaks go unnoticed, and the practice keeps bleeding money silently. 5. Relying on Outdated Systems & Overworked Staff Manual billing, limited reporting, and overburdened staff create errors. Insurance companies take advantage of those errors with: Technical denials Delayed payments Missed follow-ups The result: slow cash flow and millions lost over time. What These Mistakes Really Cost For a practice billing $200,000/month, just a 10% revenue leak means: $20,000 lost every month $240,000 lost every year In 5 years = Over $1 Million Gone And that’s just from a few “small mistakes.” How to Fix It The good news? These problems are avoidable. Track and appeal every denial. Audit coding regularly. Offer simple patient payment solutions. Use detailed reporting dashboards. Partner with experts who live and breathe revenue cycle management. Frequently Asked Questions What is the revenue cycle in healthcare? The revenue cycle refers to the financial process that healthcare providers use to track patient care, billing, claims submission, payment collection, and revenue reporting. Why are claim denials such a big problem for practices? Because each denial represents delayed or lost revenue. Without follow-up and appeals, practices may lose 10–20% of income unnecessarily. How often should medical practices audit their coding? At least quarterly. Regular coding audits help catch undercoding, overcoding, and missed services that directly affect revenue. What’s the biggest reason patient balances go uncollected? Most practices lack structured payment policies or digital payment options, making it harder for patients to pay on time. How can I measure if my practice is financially healthy? Track key metrics like denial rate (<5%), days in A/R (<40 days), and net collection rate (>95%). These reveal hidden revenue leaks. Do outdated billing systems really cost practices money? Yes. Manual or outdated systems increase human errors, delay claim submission, and make it easier for insurance companies to deny or underpay claims. How can a revenue cycle management company like Revenue Care MD help? They provide expert denial management, coding audits, advanced reporting, and patient collection strategies to ensure practices don’t lose revenue unnecessarily. Final Thoughts Mistakes in the revenue cycle don’t just hurt your bottom line — they put your entire practice at risk. At Revenue Care MD, we help practices eliminate these costly errors, recover lost revenue, and maximize profitability. Schedule your free revenue audit today and find out how much money your practice might be leaving on the table. Share This : Author Agnes Doyle Healthcare Revenue Cycle Expert at Revenue Care MD. Passionate about helping medical practices maximize revenue and reduce billing errors. Recent Posts The Revenue Trap: How Growing Patient Volume Can Actually Make You Lose Money 26 Aug 2025 Why Most Medical Practices Are Sitting on Uncollected Gold Without Realizing It 26 Aug 2025 The Untold Revenue Secret: Why Practices with the Same Patients Earn 40% More 26 Aug 2025 How Just 1 Billing Error Per Day Can Cost a Practice $50,000 Annually 26 Aug 2025 Have Any Question? Have any questions? We’re here to help you with the right answers. +1 (254) 268-1617 info@revenuecaremd.com