What a denied claim actually costs to work, and what it costs to ignore

"We have a lot of denials" is not a number

It does not survive a partners’ meeting, it does not justify a hire and it does not tell anybody which of the forty things on the list to do first. And the practices that most need a figure are precisely the ones with nobody free to work one out.

The two figures that do the work

Premier’s published analysis puts the administrative cost of adjudicating a denied claim at $57.23, and reports that the same claim frequently goes through roughly three rounds of review at 45 to 60 days each. That is the cost side: real money, usually spent by somebody whose actual job is something else.

Kodiak Solutions’ published figure is that about 90% of initially denied claims are eventually paid when they are worked, against an initial denial rate of 11.81% of claims. That is the other side: most of what is denied is not lost, it is waiting.

Both are somebody else’s measurement, not ours. We have never counted a denial at any practice and will not present a figure as though we had. What makes them useful is that you can multiply them against your own claim count in about a minute.

The arithmetic, on a small practice

Take a practice submitting 1,200 claims a month with a denial rate near the published 11.81% and an average claim value of $220. That is roughly 140 denials a month. At $57.23 each, working them costs about $8,000 a month — $96,000 a year in administrative labour. The billed value sitting in those denials is about $31,000 a month, of which the published recoverable share is roughly $28,000.

Neither number is an argument for hiring anybody in particular. They are an argument for knowing the size of the thing before deciding who should do it, which is a different and more useful question than whether denials feel high.

The half that disappears quietly

The cost of working denials is visible — it is somebody’s time and it shows up in payroll. The recoverable half is the one that vanishes without a trace: a claim that ages past the appeal window or the filing limit stops being recoverable and never appears on a report as a loss. It simply is not there any more.

That is why the over-90 bucket matters more than the denial rate. A practice with a high denial rate and a disciplined follow-up process loses very little. A practice with an average denial rate and nobody working the queue loses most of it.

Put your own numbers in

Three fields — claims a month, denial rate, average claim value — and the free calculator does the rest, with all three published rates cited on the page and linked to their sources.