How to reduce
claim denials.
Initial denial rates hit 11.8% in 2024, and up to 65% of denied claims are never resubmitted. This guide covers where denials come from, how to prevent them before submission, and how athenahealth practices keep first-pass claims clean.
- 11.8%
- average initial denial rate (2024)
- up to 65%
- of denials never resubmitted
- $25 to $181
- to rework one claim
Most denials are preventable.
Around 60% of denials trace to front-end and coding errors your team controls. Fix the top five causes and you remove the majority of preventable denials before a claim is ever submitted.
- 01
Eligibility and coverage
About 25% of denials. Wrong plan, inactive coverage, or a demographic mismatch on the date of service.
- 02
Missing or incorrect information
About 20%. Bad demographics, an invalid NPI, wrong place-of-service, or a missing taxonomy code.
- 03
Authorization not obtained
About 15%. No prior auth, an expired auth, or one tied to the wrong code.
- 04
Coding errors
About 15%. Wrong CPT, a missing modifier, unbundling, or a diagnosis that does not support the service. Outpatient coding denials rose 26% from 2024 to 2025.
- 05
Timely filing
About 10%. The claim missed the payer deadline, where recovery is nearly impossible.
Reactive, outsourced, or prevented at the source.
Practices weigh three paths: work denials after they land, outsource the cleanup, or prevent the front-end and coding denials before submission. Here is how they compare.
| Approach | How it works | Best for | Trade-off |
|---|---|---|---|
| Reactive denial management | Staff rework and appeal denials after the payer rejects them. | Teams with low denial volume and spare capacity. | Up to 65% never get reworked, so denied revenue is permanently lost. |
| Outsourced denial management | An external team handles appeals and resubmissions off-platform. | Groups buried in backlog who need capacity fast. | Cost scales with denial volume and fixes symptoms, not root cause. |
| Prevent at the source (EHR-native) | Verify eligibility, capture charges, and code accurately inside the EHR so first-pass claims go out clean. | Practices that want fewer denials, not faster appeals. | Documentation and integration depth gate how much you can prevent. |
Reactive is the default, and the most expensive
Every reworked claim costs $25 to $181, and most denials are never touched. The backlog only grows.
Outsourcing buys capacity, not prevention
You move the backlog off your desk, but the same root causes keep generating denials month after month.
Prevention is where the rate drops
Clean eligibility, complete charges, and accurate coding stop denials before they happen. Top-quartile practices hold denial rates below 5%.
A six-step denial-prevention workflow.
The practices with the lowest denial rates do not just react. They run the same checks on every claim before it goes out.
- Step 01
Verify eligibility early
Check plan, network status, and coverage 48 to 72 hours before the visit, not at check-in.
- Step 02
Confirm prior authorization
Keep a payer-specific list of auth requirements by CPT and confirm the auth matches the code billed.
- Step 03
Capture charges completely
Reconcile every billable service against the clinical note before the encounter leaves the provider queue.
- Step 04
Code to specificity
Assign ICD-10 and CPT to the highest specificity the documentation supports, with correct modifiers and no unbundling.
- Step 05
Scrub before submission
Run each claim against payer-specific and CCI edits to catch errors the clearinghouse will reject.
- Step 06
File fast and track
Submit within 24 to 48 hours, then track every claim and feed denial patterns back into prevention.
Vague documentation, like missing laterality or acute versus chronic, blocks accurate coding. Working denials in the order received instead of by dollar value and deadline leaves high-value claims to expire. And skipping root-cause analysis means the same CARC code keeps coming back.
How to vet a denial-prevention tool.
The gap between tools that prevent denials and tools that just track them comes down to integration depth and where they act in the workflow.
- Real EHR and payer integrationIt should read from and write into your EHR. On athenahealth, that means a verified Marketplace integration, not manual export.
- Acts before submissionPrevention beats appeals. The tool should catch eligibility, documentation, and coding gaps before the claim goes out.
- Specialty-tuned codingGeneric models miss specificity. Specialty-tuned coding holds up against payer documentation standards.
- Payer-specific editsIt should flag likely denials using NCCI edits, LCD and NCD coverage, and modifier logic.
- Full encounter coverageEvery encounter reviewed, not a sample, so no preventable denial slips through.
- Accountable accuracy and audit trailAsk for a measurable accuracy number and a complete, HIPAA-grade log of every code and change.
Clean claims that finish inside athenahealth.
Coding errors are one of the largest preventable denial categories, and they are rising. CarePilot reads the visit, codes it to 98% accuracy, and writes ICD-10 and CPT codes back into discrete fields inside athenaOne, so first-pass claims go out clean without rekeying. It is part of the work CarePilot completes from a single visit, alongside documentation, order entry, and the inbox.
- 98%
- coding accuracy
- 78
- minutes back per day
- 1 to 2
- business days to go live
Claim denial questions.
What is a good claim denial rate?
HFMA considers below 5% best-in-class, and top-quartile practices stay under that. The 2024 industry average initial denial rate was 11.8%, and anything at or above 10% signals that front-end, coding, or documentation processes need attention.
What causes most claim denials?
Most denials are preventable front-end and coding errors: eligibility and coverage issues (about 25%), missing or incorrect information (about 20%), authorization gaps (about 15%), and coding errors (about 15%). Timely filing accounts for roughly another 10%.
How do you prevent claim denials before submission?
Verify eligibility 48 to 72 hours ahead, confirm prior authorizations, capture charges completely, code to the highest specificity the note supports, scrub claims against payer edits, and file within 48 hours. Prevention costs far less than reworking a denial at $25 to $181 each.
Can AI reduce claim denials?
Yes. AI prevents the coding-driven share of denials by reading the documentation and assigning accurate ICD-10 and CPT codes before submission. CarePilot codes to 98% accuracy and writes back into athenaOne, so first-pass claims are cleaner.
Does denial prevention work with athenahealth?
Yes, when the tool has a real integration rather than a manual export. CarePilot reads from and writes ICD-10 and CPT codes back into athenaOne's discrete fields, keeping clean claims flowing without leaving the platform.
Clean claims, first pass.
Accurate ICD-10 and CPT, written back into athenaOne. Fewer coding denials. Book a 30-minute demo.