{"id":886,"date":"2025-11-27T10:06:23","date_gmt":"2025-11-27T10:06:23","guid":{"rendered":"https:\/\/atlanticrcm.com\/blog\/?p=886"},"modified":"2025-11-27T10:11:14","modified_gmt":"2025-11-27T10:11:14","slug":"why-87-of-claim-denials-are-preventable","status":"publish","type":"post","link":"https:\/\/atlanticrcm.com\/blog\/why-87-of-claim-denials-are-preventable\/","title":{"rendered":"87% of Claim Denials Are Preventable – Here\u2019s What Healthcare Teams Need to Know"},"content":{"rendered":"

Why 87% of claim denials are preventable: A behind-the-scenes look at RCM<\/strong><\/h3>\n

Imagine Dr Patel, a busy physician at a mid-sized independent practice. She treats dozens of patients every day, and her clinical team delivers top-notch care.<\/p>\n

But, in the back office, her billing staff are drowning in denied claims<\/a>. Every week, dozens of claims come back from payers with rejections. Some denials are appealed, but many never make it through.<\/p>\n

The cash flow is sluggish, staff morale is low, and Dr Patel is left wondering: How did it get this bad?<\/p>\n

This is the hidden reality for many hospitals, physician groups, and freestanding ERs<\/a>. Denied claims are not just a nuisance \u2014 they are a serious threat to financial stability.<\/p>\n

The good news? A staggering portion of them are avoidable. In fact, up to 87% (or more) of denials stem from operational and administrative preventable errors.<\/p>\n

The Scale of the Problem<\/strong><\/p>\n

While \u201c87% preventable\u201d may sound high, data from across the industry shows just how large the denial-risk iceberg really is:<\/p>\n

According to HealthCatalyst, nearly 90% of claim denials are avoidable, especially when AI-driven tools and predictive analytics are employed.<\/p>\n

In a similar vein, Change Healthcare\u2019s Denials Index found that a very high portion of denials originate from front-end errors like registration and eligibility – areas entirely under providers\u2019 control.<\/p>\n

According to Simbo AI\u2019s analysis, while many denials are preventable (estimates are around 85%), a substantial share goes unworked simply because practices don\u2019t have denial-prevention programs strong enough.<\/p>\n

MGMA, in their guide for medical practices, found that 86% of denials are potentially avoidable, but nearly half of those avoidable denials may never be recovered.<\/p>\n

Put simply: a huge volume of denials doesn\u2019t have to be \u201cjust the cost of doing business\u201d \u2014 many are preventable with better systems, workflows, and technology.<\/p>\n

Why So Many Denials Happen in the First Place<\/strong><\/p>\n

To understand how 87% of denials could theoretically be avoided, you have to look behind the curtain and examine common breakdowns in the revenue cycle:<\/p>\n

    \n
  1. Front-end registration and eligibility issues<\/strong><\/li>\n<\/ol>\n

    A large number of denials stem from incorrect or missing patient data, outdated insurance information, or coverage ineligibility.<\/p>\n

      \n
    1. Coding and documentation errors<\/strong><\/li>\n<\/ol>\n

      Mistakes in diagnostic or procedural codes are another big driver. Even small coding mismatches can trigger rejections.<\/p>\n

        \n
      1. Manual workflows and human error<\/strong><\/li>\n<\/ol>\n

        Without automation, claims pass through many hands \u2014 front desk, billing, coding, denial teams. Each manual touchpoint introduces risk.<\/p>\n

          \n
        1. Poor denial prevention infrastructure<\/strong><\/li>\n<\/ol>\n

          Many organizations lack dedicated teams or prevention programs. According to a survey, very few providers have focused front-end denial-prevention staff, despite most denials being rooted in the front end.<\/p>\n

            \n
          1. Under-resourced or undertrained teams<\/strong><\/li>\n<\/ol>\n

            As MGMA notes, many practices struggle with staffing, training, and retention. Without skilled teams to catch errors early, denials proliferate.<\/p>\n

            Why \u201c87% Preventable\u201d Is Not Just a Number \u2014 It\u2019s a Call to Action<\/strong><\/p>\n

            When you frame denial prevention this way, it\u2019s not just about chasing down denials after the fact; it\u2019s about building your operations to avoid denials altogether. And that\u2019s where revenue cycle management (RCM)<\/a> automation comes in \u2014 especially the kind of advanced, intelligent system that Atlantic RCM provides.<\/p>\n

            Here\u2019s how Atlantic RCM helps healthcare organizations turn the denial problem on its head:<\/strong><\/p>\n

              \n
            1. Predictive Denial Analytics<\/strong><\/li>\n<\/ol>\n

              By using data and machine-learning-driven insights, Atlantic RCM\u2019s system can highlight claims that are most likely to be denied before they\u2019re submitted \u2014 empowering teams to correct issues proactively.<\/p>\n

                \n
              1. Automated Front-End Validation<\/strong><\/li>\n<\/ol>\n

                From patient registration to insurance eligibility<\/a>, the software cross-verifies data in real time. This reduces the risk of registration-related denials and ensures that patient demographics and coverage are accurate.<\/p>\n

                  \n
                1. Intelligent Coding Support<\/strong><\/li>\n<\/ol>\n

                  Errors in coding are a top cause of denials. Atlantic RCM\u2019s automation helps streamline coding, flag mismatches, and ensure medical necessity documentation is aligned with payer requirements.<\/p>\n

                    \n
                  1. Denial Prevention Workflows<\/strong><\/li>\n<\/ol>\n

                    Rather than reacting, the system builds structured workflows: denial prevention steps, escalation paths, and root-cause tracking. When a submission has risk factors, the software can guide interventions before a denial hits.<\/p>\n

                      \n
                    1. Continuous Feedback and Audit Loop<\/strong><\/li>\n<\/ol>\n

                      Atlantic RCM doesn\u2019t just process claims \u2014 it learns. By tracking patterns, appeal outcomes, and payer behavior, the system helps refine your processes, preventing the same error types from recurring.<\/p>\n

                        \n
                      1. Resource Optimization<\/strong><\/li>\n<\/ol>\n

                        By freeing staff from repetitive, error-prone tasks, your team can focus on higher-value work: complex appeals, strategic prevention, and patient-facing operations.<\/p>\n

                        Real-World Impact: What This Could Mean for Your Practice<\/p>\n

                        Cash Flow Improvement: Reducing avoidable denials could slash the time and money spent on rework, helping practices realize revenue faster.<\/p>\n

                        Operational Efficiency: With fewer denials to address, your billing and coding teams become more efficient.<\/p>\n

                        Reduced Revenue Leakage: Preventing denials upstream means less write-off risk downstream.<\/p>\n

                        Improved Staff Morale: When denial management shifts from reactive firefighting to proactive prevention, your staff can work more strategically.<\/p>\n

                        Stronger Payer Relationships: Cleaner, more accurate claims lead to fewer disputes, better transparency, and smoother collaboration.<\/p>\n

                        Conclusion<\/strong><\/p>\n

                        The truth is, most claim denials aren\u2019t inevitable \u2014 many of them are born from avoidable administrative or coding missteps. While \u201c87% preventable\u201d might sound like a lofty target, with the right orchestration of technology, process, and people, it becomes a real, achievable goal.<\/p>\n

                        Atlantic RCM<\/a> stands at the forefront of that transformation: powered by AI, rooted in deep RCM expertise, and built to stop denials before they even start.<\/p>\n

                        If you’re ready to reclaim lost revenue, streamline your workflows, and finally turn denial prevention into a strength rather than a burden, partner with Atlantic RCM to make that vision a reality.<\/p>\n

                        FAQ\u2019s for Denial Management<\/strong><\/p>\n

                          \n
                        1. 1. \u201cCan you explain why my hospital keeps getting preventable claim denials and what steps we can take to reduce them?\u201d<\/strong><\/li>\n<\/ol>\n

                          Answer:<\/strong><\/p>\n

                          Most preventable denials in hospitals come from upstream issues such as inaccurate patient data, outdated insurance information, incorrect coding, missing documentation, and not following payer-specific requirements. These errors typically originate in scheduling, registration, eligibility verification, and charge capture.<\/p>\n

                          To reduce them, hospitals need to implement a denial prevention workflow rather than a denial reaction workflow. This includes:<\/p>\n