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Denied claims are quietly draining hospital revenues, and the financial impact is staggering. Every year, U.S. hospitals collectively lose over $262 billion due to claim denials, yet 90% of these denials are preventable.
In an era of rising labor costs, shrinking reimbursements, and operational pressures, no hospital can afford to leave money on the table. The question is: how can CFOs plug these revenue leaks and recover lost income?
🔴 The Reality of Claim Denials
~10% of hospital claims are denied initially, requiring costly rework.
65% of denied claims are never resubmitted, leading to massive revenue losses.
The average cost to rework a denied claim? $25 per claim—and for high-volume hospitals, this adds up fast.
The Biggest Causes of Denied Claims
1️⃣ Incorrect or Missing Patient Data – A simple typo or missing insurance detail can lead to automatic rejection.
2️⃣ Lack of Medical Necessity – Insurers scrutinize documentation and may deny claims lacking sufficient justification.
3️⃣ Authorization Issues – Failure to obtain prior authorization results in an immediate rejection.
4️⃣ Late Submissions – Tight deadlines mean even valid claims can be denied if submitted too late.
5️⃣ Coding Errors – Upcoding, downcoding, or mismatched diagnosis codes trigger denials and delays.
How Hospitals Can Fix Revenue Leakage
💡 1. Strengthen Front-End Processes
Automate patient intake and verification to catch errors before claims are submitted.
Implement real-time eligibility checks to reduce errors tied to insurance coverage.
💡 2. Optimize Revenue Cycle Management
Deploy AI-driven denial management systems to track and predict claim issues.
Use data analytics to identify patterns in claim rejections and address recurring problems.
💡 3. Improve Coding Accuracy & Documentation
Provide ongoing coder education on evolving payer requirements.
Implement computer-assisted coding (CAC) tools to reduce human errors.
💡 4. Prioritize Denial Prevention & Appeals
Identify high-dollar claims at risk of denial and proactively address potential issues.
Develop a streamlined appeal process with a dedicated team focused on recovering lost revenue.
📢 DCCS Financial Advisory Services Can Help
Hospitals are leaving millions of dollars on the table due to claim denials—but this revenue can be recovered with the right strategy.
At DCCS Financial Advisory Services, we help hospitals reduce denials, improve claim success rates, and optimize revenue cycle efficiency to drive stronger financial outcomes.
David Capone, DCCS Financial Advisory Services
🔹 Are claim denials impacting your bottom line? Let’s talk about how DCCS can help you stop revenue leaks and maximize reimbursements.
To learn more: CONTACT DCCS
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