Key points
- Of in-network denial reasons reported by HealthCare.gov insurers for 2024, 25% were administrative and only 5% were medical necessity (KFF).
- Consumers appealed fewer than 1% of roughly 85 million denied in-network claims, and insurers upheld 66% of the appeals they received.
- Clinical denials need their own queue, their own documentation, and their own deadline calendar — a corrected claim will not fix one.
Denial management is the practice of finding out why payers refuse claims, recovering the ones worth appealing, and removing the causes that generate the rest. The evidence points at the front end. Of in-network denial reasons reported by HealthCare.gov insurers for 2024, 25% were administrative and only 5% were based on medical necessity.
Appeals barely happen. Consumers appealed fewer than 1% of the roughly 85 million in-network claims denied that year, and insurers upheld 66% of the appeals they received.
The fundamental approach
Classify each denial by cause, route it to the function that owns that cause, and change that function's workflow so the same denial stops arriving. Rework alone treats symptoms. A practice that reworks 400 eligibility denials a quarter without touching check-in will rework 400 more next quarter.
Denial management also has to price the work. Some categories are cheap to correct and refile. Others need clinical documentation, a physician's time, and a deadline calendar.
| Denial category | Where it gets fixed | Who owns it |
|---|---|---|
| Administrative: duplicates, missing data, untimely filing | Registration accuracy and claim edits | Front office, billing |
| Member not covered, eligibility lapsed | Verification at scheduling and again at check-in | Front office |
| No prior authorization or referral | Authorization secured before the service | Clinical operations |
| Excluded service or benefit limit reached | Benefits check, patient financial counseling | Front office |
| Medical necessity | Documentation, coding specificity, clinical appeal | Provider, coding, appeals |
Why clinical denials need their own workflow
Clinical denials are based on medical necessity, level of care, or coverage criteria rather than a data error. Across HealthCare.gov plans, medical necessity accounted for 5% of reported in-network denial reasons in 2024, but individual plans ran far higher — at one Molina Healthcare plan in Mississippi, medical necessity drove 38% of denial reasons.
A corrected claim will not fix one of these. Clinical denials need the note, the order, the record of failed conservative therapy, sometimes a peer-to-peer, and always the appeal window tracked. Practices that drop them into the same queue as duplicate-claim rejections lose them to timely filing.
What changes in 2026 and 2027
Payer transparency is the trend most likely to change daily work. CMS-0057-F requires impacted payers to implement certain provisions by January 1, 2026, with the application programming interface requirements due primarily by January 1, 2027. Qualified health plan issuers also have to post prior authorization metrics publicly.
Denials become payer-specific problems once that data is out. Rank your payers by authorization denial rate, then staff against the worst two instead of spreading effort evenly.
Sources
Frequently asked questions
- What is the difference between a rejection and a denial?
- A rejection never enters adjudication — the clearinghouse or payer returns it for a format or data error, and staff can correct and resubmit without an appeal. A denial has been adjudicated and refused, so it requires either a corrected claim or a formal appeal inside the payer's window.
- How often are appealed denials overturned?
- Among HealthCare.gov plans in 2024, consumers appealed fewer than 1% of denied in-network claims and insurers upheld 66% of the internal appeals they received, so roughly a third were reversed. Provider-side appeal outcomes are not reported federally, so measure your own overturn rate by payer.
- Should every denial be appealed?
- No. Appeal the denials with clinical or contractual merit, correct and refile the data errors, and write off the categories where the cost of the work exceeds the expected recovery — then fix the process that produced them.
- How long should a practice keep working a denied claim?
- Until the payer's appeal window closes or the denial category proves unrecoverable, whichever comes first. Deadlines vary by payer and by appeal level, which is why clinical denials need a tracked calendar rather than a shared work queue.
- What denial rate should a practice expect?
- Compare your own rate against published industry bands rather than a single number, and read it next to first-pass resolution. Our benchmark tool shows where your denial rate and A/R aging sit against those bands.