Key points:
- Medical claim denials typically range around 20%, translating to significant lost revenue and administrative strain.
- Denials often stem from five key issues, including incomplete documentation and the use of incorrect or outdated codes.
- While denied claims must be appealed quickly, prevention through tighter processes is far more efficient than repair.
- Utilizing well-trained medical scribes is crucial for ensuring accurate, detailed documentation that drastically reduces claim rejections.
Few things drain a medical practice’s time and resources faster than denied claims. You do everything right: see the patient, document the encounter, and submit the claim. And then weeks later, you get that frustrating notice: “Claim denied.” It’s more than just an administrative setback; it’s lost revenue, wasted time, and a hit to workflow efficiency. So, why do medical claims get denied, and what can be done to fix it?
How many medical claims are denied? The scope of the problem
First, let’s face the numbers. Depending on the source and specialty, the percentage of medical claims that are denied usually ranges around 20%. That might sound small, but in a busy practice or hospital system processing thousands of claims, it translates to massive amounts of unpaid work, representing billions of dollars in potential revenue sitting in limbo.
Why are medical claims denied?
Denials can stem from all kinds of issues, but they generally fall into 5 categories:
1. Incomplete or inaccurate documentation
Even the most skilled providers can miss details when things get busy. A single missing modifier, unclear diagnosis code, or incomplete note can derail a claim. Often, it’s not that the care wasn’t delivered properly, it’s that the record doesn’t clearly tell the story.
2. Coding errors
Using incorrect or outdated codes remains a leading cause of claim denials. ICD-10 and CPT codes change often, and even a small mistake can result in an immediate rejection.
3. Missed deadlines
Every payer has strict submission timelines. If a claim isn’t filed promptly – or if resubmissions lag – payment can slip away completely.
4. Patient eligibility or authorization issues
Sometimes the problem starts before the appointment even happens. Insurance coverage might have expired, or pre-authorization wasn’t obtained for certain procedures. These behind-the-scenes denials add up really fast.
5. Duplicate or inconsistent claims
When multiple claims are filed for the same service or when data doesn’t match between systems, insurers flag them. Even a simple typo (like a mismatched birthdate) can trigger a denial.
How to handle denied medical claims?
When denials happen (and they will), recovery depends on how quickly and effectively you respond. The first step in how to handle denied medical claims is understanding the reason behind the rejection. Review the explanation of benefits (EOB), identify the specific issue, and correct it immediately.
Appealing denied claims requires persistence. Keep a clear log of all communications, document changes, and resubmit within the payer’s deadline. Many practices now have dedicated denial management teams whose job is to chase down every unpaid dollar – but even they’ll tell you that prevention is far more efficient than repair.
Why medical scribes make a difference
This is where medical scribes come in. They play a crucial role in preventing denials, ensuring that every patient note includes all required details, diagnosis, treatment, and history, so the coding team doesn’t have to guess or fill in gaps later.
Scribes also help clinicians capture specificity in real time. Instead of a vague note like “follow-up visit,” a properly documented chart might read “follow-up for type 2 diabetes with peripheral neuropathy, stable on metformin.” That level of clarity supports precise coding and reduces the chance of rejections tied to “insufficient information.”
Think about how many hands a claim passes through before payment: provider, scribe, coder, biller, and payer. Every handoff is an opportunity for an error. By having a scribe who documents correctly from the start, you simply reduce the domino effect of inaccuracies.
The hidden cost of denials
Every denied claim costs time and money. Reworking a single claim can take hours of staff effort, depending on the complexity. Multiply that by dozens, sometimes hundreds, in a month, and the total amount adds up.
That’s why scribes aren’t just there for efficiency or provider support. They quietly protect a practice’s bottom line, preventing or stopping small errors before they snowball into big losses.
The takeaway
Denials aren’t going away, but they can be drastically reduced. Understanding why medical claims are denied, tightening documentation processes, and investing in well-trained medical scribes can shift the entire picture.
So the next time you’re wondering what percentage of medical claims are denied or how many medical claims are denied each year, remember that behind those statistics is an opportunity.
With accurate documentation and solid collaboration between providers and scribes, claims go out cleaner, leading to fewer denials and payments that come in sooner.
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