Denial management remains one of the most pressing challenges facing revenue cycle leaders. In our Mindsets 2025 Healthcare Executive Leadership Report, 76% of executives identified denials as a top concern, underscoring the financial strain they create. In addition, analysis from Clarivate reveals that initial denials affected 12% of hospital claims in 2023—meaning approximately one in every eight dollars billed was initially rejected by insurers.1 Medical necessity denials alone rose by 5% in 2024, particularly for emergency services and those delivered via telehealth.2
In an era of tightening margins and looming reimbursement cuts, healthcare providers can no longer afford an underperforming revenue cycle—it’s a direct threat to organizational sustainability.
One recent trend has been the expansion of documentation requests into lower-dollar claims. Historically reserved for high-value or complex services, these requests are now appearing across routine claims, driven largely by payor artificial intelligence (AI) tools. At the same time, downgraded evaluation and management (E&M) levels and other payor-initiated reductions have quietly eroded reimbursement. These shifts highlight the evolving nature of claims processing, which can leave even experienced revenue cycle teams struggling to adapt. The result for many providers is delayed cash flow, decreased yields on negotiated rates, and reduced operating margins.
Healthcare providers can take the following six steps to help proactively reduce denials and increase appeals success rates when denials occur.
Focus on Upstream Prevention
A common misconception is that denials are a back-end problem. However, many denials originate upstream, due to errors in scheduling, coverage verification, or prior authorization. Revenue cycle leaders should invest in training to help improve front-end accuracy and build resilience in the technology and processes in departments with high turnover, such as registration. By reinforcing processes with technology safeguards and quality assurance checks, organizations can better prevent errors before they result in denials, revenue leakage, and degraded margins.
Build Strong Analytics & Metrics
Turning data into actionable intelligence, such as with the Denials Management Monitoring tool from Forvis Mazars, is the backbone of an effective denial management program. Leaders should track two core metrics: the initial denial rate and denial write-offs. These can then be segmented by denial reason, payor, service type, or provider to reveal actionable insights. Rigorous monitoring can help identify issues such as payor-initiated downgrades of E&M levels as they occur to prevent them from snowballing. These adjustments often slip through unnoticed unless system dictionaries are carefully reviewed. Once identified, coding teams should appeal such downgrades. Providers should use CMS regulations and guidance to support their appeal efforts. The data captured in the appeal process can be useful in contract-related discussions with payor representatives.
Additional analytics, such as overturn rates by payor, days to resolution, and the number of appeals required, help organizations evaluate efficiency and prioritize resources. By understanding and focusing on the highest-value opportunities, leaders can determine which denials are most worth pursuing, helping allocate limited staff capacity to issues that are more likely to increase revenue yield and operating margin.
Proactively Engage Payors’ Provider Relations Representatives
Providers can leverage trended denials data from a strong analytics platform in conversations with health plans’ provider relations representatives. These conversations can help revenue cycle teams identify changes in health plan claims processing policies that they may have missed, identify and resolve issues with plans’ claims processing systems, or create clarity around documentation criteria. Active communication can also help hold plans accountable to negotiated contract terms and lay the groundwork for improved contracting language if necessary.
Collaborate & Communicate
Denial management is a team effort. It requires close collaboration with managed care contracting staff. Real-time denial data can inform contract negotiations, helping providers secure changes in contracts to address issues that could not be resolved during monthly meetings with provider relations representatives.
Revenue cycle and managed care contracting leaders should review contract language carefully and consider negotiating for longer notice periods on policy changes, e.g., 180 days instead of 90, and adding neutrality clauses to protect against adverse financial impacts. These contractual safeguards help reduce the risk of sudden payor policy shifts that can increase denials and revenue leakage.
Leverage Automation
Technology plays a critical role in helping prevent denials. Many electronic health record (EHR) systems allow providers to automatically submit required documentation at the time of claim submission or through payor portals. Where EHRs fall short, third-party vendors offer software that can automate these tasks at a lower cost and greater efficiency.
Create a Denials Prevention Culture
We advise leadership to take deliberate steps to embed denials prevention and reduction into organizational culture. Establishing a cross-functional denials steering committee helps align the right stakeholders and focus them on actionable solutions. Rather than trying to tackle every denial issue at once, leaders should prioritize one major problem at a time to build momentum and demonstrate success. By combining focus, collaboration, and accountability, leaders can drive meaningful reductions in denials and strengthen financial performance.
How Forvis Mazars Can Help
At Forvis Mazars, our revenue cycle improvement team helps healthcare organizations fulfill their role in achieving health for the communities and patients they serve. We have deep experience working with registration, revenue cycle, and managed care contracting teams using a data-driven, integrated approach that supports denial management and financial discipline. If you have questions or would like assistance, please reach out to our professionals today.
You can also hear more denial management insights in our recent episode of the “Achieving Health” podcast.