We find why claims are denied, correct or appeal them before the deadline, and fix the cause upstream, working inside the EHR you already use.
Quick answer
Denial management services find out why a payer denied a claim, correct or appeal it before the deadline, and fix the cause so it does not return. The work reads reason and remark codes, assigns a root cause and an owner, and moves prevention to the front end: eligibility, authorization and data-completeness checks.
Denial management services find out why a payer denied a claim, correct or appeal it before the deadline, and fix the cause so it stops coming back. The work has two halves: recovering denied claims and preventing the next ones.
This is medical billing denial management as a service, inside your existing EHR. For how-to detail, see our denial management guide, guide to building a denial program and article on optimizing denial management.
Find out why your claims are denied
Our free audit sorts a sample of your denials by reason, payer and root cause.
Many denials are administrative or authorization-related, and many can be caught at the front end. Published rates vary by payer type, so measure your own.
In Premier's survey published in February 2025, hospitals and health systems reported a denial rate of nearly 15% on 2023 claims. Fighting a denial cost an average of $57.23 per claim, and about 70% of denials were ultimately overturned and paid. Premier also reported that, on average, 10.4% of denied claims had been pre-approved through prior authorization, and that insurers cite minor clerical or data errors as the top reason to deny such claims. These are hospital figures, so read them as a signal, not a benchmark.
KFF's analysis of 2024 HealthCare.gov data, published in March 2026, found that insurers denied 19% of in-network claims, ranging from 3% to 36% by insurer, and fewer than 1% of denied claims were appealed. The reasons are below.
Administrative problems and missing authorizations, a third of the reasons, are what a clean front end catches. Marketplace plans are one payer type, and one claim can carry several reasons.
HFMA's MAP Keys (2023 edition) define the remittance denial rate (AR-5) as claims denied divided by claims remitted, counting actionable denials, initial and appeal. Denial write-offs (AR-6) are net dollars written off as denials divided by average monthly net patient service revenue. We name the formula in every report.
A remittance explains each adjustment with a group code, a claim adjustment reason code (CARC) and, often, a remittance advice remark code (RARC). Together they say what the payer did and why, but not what caused it.
| Code | What the code set says | What we check first |
|---|---|---|
| CARC 16 | Claim or service lacks information or has a billing error; a remark code accompanies it | The field the remark code names |
| CARC 4 | Procedure code is inconsistent with the modifier used | Modifier against code and note |
| CARC 45 | Charge exceeds the fee schedule, maximum allowable or contracted fee; used with group code CO or PR | Whether the adjustment matches your contract |
| CARC 97 | Benefit is included in the payment for another service already adjudicated | Bundling edit and modifier support |
| CARC 197 | Precertification, authorization, notification or pre-treatment is absent | Authorization on file, dates and codes |
| CARC 24 | Charges are covered under a capitation agreement or managed care plan | Whether this is the right payer |
| CARC 29 | The filing time limit has expired | Proof of timely filing |
| CARC 50 | Payer does not consider the service medically necessary | Documentation and payer policy |
Source: X12 claim adjustment reason codes (2026), paraphrased. Check the current list; entries carry start and last-modified dates.
Group codes show how the amount is classified: CO is contractual obligation, PR patient responsibility, OA other adjustment and PI payor initiated reduction, per X12. Confirm against your contract before billing a patient.
A RARC adds detail to an adjustment, and X12 describes most as supplemental to a CARC. The M, MA and N prefixes are loose groupings, so read each code's own text. Per X12, MA130 says a claim has incomplete or invalid information and cannot be processed, with no appeal rights, so the fix is a new claim. M51 flags a missing or invalid procedure code and N4 a missing prior carrier EOB.
We sort denials into six root causes, each starting at a different step. Naming the step is what makes prevention possible.
Each denial gets one root cause and one owner. Payer errors go to appeal. The rest go back to the team that can prevent them.
Prevention works at two points: before the visit, when eligibility and authorization are confirmed, and before submission, when the claim is checked for completeness.
The AMA 2025 survey of 1,000 physicians reported about 40 prior authorizations per physician per week and about 13 hours of physician and staff time. Under CMS's interoperability and prior authorization rule, Medicare Advantage, Medicaid and CHIP plans must, from January 1, 2026, decide expedited requests within 72 hours and standard requests within seven calendar days, and give a specific reason for a denial. Drug authorizations and federal marketplace plans are excluded from the timeframes.
See our guides to prior authorization and insurance verification.
Data-completeness checks stop a claim missing required data before it leaves. In the RCM Finder portal, specialty-aware billing logic runs per claim, with 35 specialties grouped into shared archetypes. See our claim scrubbing guide and clean claims guide.
Estimate what denials cost you
Enter your monthly claims and collections in our revenue calculator.
Original Medicare has five appeal levels. The first, redetermination, must be requested within 120 days of receiving the initial determination. Later levels have their own windows.
Per the CMS MLN guide and the CMS appeals flowchart, a redetermination is requested in writing, on form CMS-20027 or any document with the required elements, and counts as filed when the contractor receives it. Medicare Advantage, Medicaid and commercial plans set their own appeal rules, so use the plan's rules and your contract.
Set an internal deadline well before the payer's. Some denials, such as MA130, have no appeal route; a corrected new claim is the fix. For filing limits, see our time limits guide.
We start with a free audit, then work denials in stages inside your existing EHR. You keep your system and your data.
We review a sample of recent denials, sorted by payer, reason code and root cause. You get a written summary of what is recoverable. Pricing is quoted after the audit.
We put a Business Associate Agreement in place before accessing patient data, then set role-based access.
Denials are pulled from remittances, tagged by payer, codes and dollars at risk, and ranked by days left.
Our team works inside your EHR and the portal. Claims move through named stages with an owner.
Each recurring cause gets an owner and an upstream change.
You get weekly KPI reporting on denials by payer and reason, with the formula named.
We build our billing pipeline around how claims actually move through a practice: registration, charge entry, submission, payment and follow-up.
The loop is the same in every specialty. The denials that fill it are not.
| Specialty group | Denials we watch for | What changes in the work |
|---|---|---|
| Pain management | Medical necessity and authorization on procedures; modifier 25 on a same-day visit. One jurisdiction's epidural steroid injection LCD (L39240, April 2026) ties repeat injections to documented improvement. | Check documentation before a repeat injection is billed |
| Dermatology | Modifier 25 on a visit with a minor procedure. The NCCI manual treats the decision to operate as part of the procedure. | Confirm the visit is separately identifiable |
| Orthopedics | Global-period and modifier edits. The NCCI manual points to modifier 57 for the decision for major surgery, and modifier 59 only if no other modifier fits. | Check the global period and the site before appeal |
| Cardiology | Medical necessity on diagnostic tests and authorization for imaging, both tied to the order and note. | Order, diagnosis and note must match |
| Behavioral health | Code-and-modifier mismatches (reason code 4) and authorization or visit-limit rules. | Modifier check before submission |
| Oncology | Drug and administration claims. CMS's prior authorization rule excludes drugs from its timeframes, so drug authorizations follow each payer's process. | Track drug authorizations per payer |
| Radiology | Authorization and ordering-provider data created outside the practice. | Order and authorization on file at scheduling |
Sources: CMS NCCI Policy Manual, Chapter 1 (2026); Noridian article for LCD L39240 (effective April 9, 2026); X12 reason codes; CMS-0057-F fact sheet. Other cells describe operating logic, not statistics.
LCDs differ by Medicare contractor, so we check yours in the Medicare Coverage Database. Start from our specialty RCM hub for your specialty.
Denials are usually created upstream, so we run denial management as one of four connected services.
Marketing decides which plans reach your schedule. Plans that deny often show up in denial reports first.
Many denials start at registration or authorization. Our assistants handle eligibility, prior authorizations and intake.
Claim scrubbing, denial management and A/R follow-up run by one accountable team.
The portal shows each claim's stage and owner, for practices and billing companies.
Choose the model that can work every denial before its appeal deadline. In-house gives control, outsourced adds capacity, and a hybrid splits the work.
| Factor | In-house | Outsourced | Hybrid |
|---|---|---|---|
| Who works denials | Your billers, between other tasks | A dedicated team | Split by denial type |
| Appeal deadline coverage | Gaps when staff are out | Vendor covers absences | Partner covers its share |
| Root-cause feedback | Direct, if someone owns it | Needs a standing review with your office | Shared review |
| Cost structure | Salaries, benefits, software | Contract fee (ours quoted after a free audit) | A mix of both |
| Usually suits | Larger groups with stable billing staff | Practices with rising denials and thin staff | Practices keeping front-desk fixes in-house |
Decision guide based on common operating models; no sourced statistics.
Ask: does one person own each denial until resolved? See also how front desk staff affect the revenue cycle.
Not sure which model fits?
Talk it through with our team. If in-house makes more sense for your practice, we will say so.
Any company that works your denials is a HIPAA business associate and must sign a Business Associate Agreement. Beyond that, ask how it tracks appeal deadlines.
HHS guidance lists billing and claims processing as business associate functions and says a business associate is directly liable for certain HIPAA provisions. The Security Rule's technical safeguards (45 CFR 164.312) include access control, audit controls and transmission security.
Our setup: role-based access, audit logging, encrypted HTTPS connections, and a Business Associate Agreement before we access patient data. For your side, use our HIPAA compliance checklist.
We would rather tell you now than after you sign. Here is where we fit and where we do not.
A good fit if you are
Probably not a fit if you are
What we would do first if we were running your practice's revenue cycle tomorrow.
In KFF's 2024 data, administrative reasons and missing authorization or referral were about a third of reasons. We check registration and eligibility first.
We record the reason code and the step where the error began, then review the top reasons weekly.
We rank denials by value and nearest deadline, so recoverable money is worked before it expires.
Set a date well before the payer's window, so a missing record can still be found.
The reason code gives a category. The remark code often names what to fix.
A denial that happens twice should change a front-desk step, a pre-submission check or an authorization rule.
They are the work of finding out why a payer denied a claim, correcting or appealing it before the deadline, and fixing the cause so it does not recur. That includes capturing denials from remittances, sorting them by reason code and root cause, resubmitting or appealing, and feeding fixes back to registration, authorization and coding. The aim is fewer repeat denials, not only more appeals, so each fix is tracked to the team that owns it.
Reason code 16 means the claim or service lacks information or has a billing error, and a remark code accompanies it. Read the remark code to find the missing or wrong field, correct it and resubmit. Some are unprocessable and cannot be appealed. MA130, for one, calls for a new corrected claim. We read the remark code first, because it usually names what to fix.
For a first-level appeal, a redetermination, request it within 120 days of receiving the initial determination. Later levels run 180 days, then 60 days each. Medicare Advantage, Medicaid and commercial plans set their own deadlines, so check the plan rules and your contract, and set an internal deadline sooner than the payer's.
Many can be prevented. Administrative reasons and missing authorizations are among the most common, and both start at the front end. Confirm eligibility and authorization before the visit, and check each claim for completeness before it is sent. Some denials still come from payer errors or medical necessity disputes, and those need an appeal with the record attached.
Yes. We pull recent denials, sort them by appeal deadline and dollar value, and work the recoverable ones first. Some older denials will be past their appeal or filing deadlines and cannot be recovered. We tell you which ones early, so nobody spends time on them and recoverable denials are worked first.
Pricing depends on claim volume, specialty, payer mix and how many denials are waiting. We quote after a free practice audit, so the price reflects your real workload. Whoever you choose, ask what is included, such as appeals, old denials, root-cause reviews, reporting and who owns the fixes that come out of them.
Tell us about your practice. A member of our operations team replies within one business day.
Pricing is quoted after the audit, based on your volume and the services you choose. Prefer to talk? Call +1 (302) 556-2288.
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