Denial rate
The denial rate is the share of claims a payer refuses to pay on adjudication — a core measure of revenue-cycle friction, best read by trend and by reason.
Updated
The denial rate is the percentage of claims that payers deny — refuse to pay, in whole or in part — after adjudication. It measures how often submitted claims fail to convert to payment on the terms billed.
Denials are returned with standardized reason codes (CARC and RARC) that point to a cause — eligibility, authorization, coding, medical necessity, or timely filing. The mix of reasons is usually more actionable than the headline percentage.
How it’s calculated
Claims denied ÷ Claims submitted (or adjudicated) × 100
Denominator and value conventions vary (submitted vs. adjudicated; claim count vs. charge value). Pick one and apply it consistently so the trend is comparable.
How to read it
A lower denial rate generally means less rework and faster, more complete collection. Healthy ranges vary widely by specialty and payer, so read the rate as a trend and drill into denial reasons rather than comparing to a fixed benchmark — treat any published average as directional, not absolute.
What moves it
- Front-end accuracy (eligibility, authorization, registration)
- Coding accuracy and documentation that supports medical necessity
- Payer-rule and timely-filing compliance
- Prevention loops that fix root causes, not just resubmit claims
Commonly confused with
- Rejection: A rejection fails a pre-adjudication edit and never entered the payer’s system; a denial is the payer’s decision after adjudication.
- Underpayment: An underpayment is paid below the contracted rate — not a refusal to pay — and is tracked separately.