Why Your denial rate double the industry average

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.

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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Coding Errors (wrong modifiers, outdated codes).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.