Your billing team isn’t imagining it. If your denial rate feels worse than it did two years ago, it probably is. Recent industry surveys show rising denial pressure since 2022, and MGMA’s most recent Stat poll found denials and appeals are now the single most-cited revenue cycle leak among practice leaders, ahead of front-end errors, billing delays, and coding mistakes. You feel it before you see it in a report: the same payer rejecting the same claim type every month, an appeals folder nobody’s touched in three weeks, a finance meeting where the honest answer to “why is collections down” is a shrug. That’s not a seasonal blip. It’s the result of a handful of specific shifts on the payer side and a few specific gaps on the provider side, and both are fixable once you know exactly where to look.
This post walks through what the data actually says about the increase, the five root causes showing up most consistently across industry surveys, and the concrete steps practices and health systems are using to bring their denial rate back down, whether that work happens in-house or through an outsourced RCM partner.
Quick Answer
Denials in medical billing have risen mainly because payers have tightened prior authorization requirements, expanded automated claims review, and added more claim-specific edits, while many provider-side teams are working denials manually with fewer staff hours than current volume requires. MGMA’s January 2026 Stat poll found denials and appeals are the top reported revenue cycle leak, cited by 48% of practice leaders, well ahead of front-end issues (23%), billing and collections (14%), and coding (13%).
The trend shows up in every recent survey that’s looked for it. A March 2024 MGMA Stat poll of 235 medical group leaders found 60% reported an increase in claim denials from the prior year, while only 11% saw a decrease. By MGMA’s January 2026 poll of 288 practice leaders, denials and appeals had become the single biggest reported revenue cycle leak, at 48%, ahead of front-end issues, billing and collections, and coding.
Hospital-level data tells a similar story. Kodiak Solutions’ own analysis of more than 2,300 hospitals found the median final denial rate rose from 2.5% in 2024 to 2.7% in 2025, and the median bad debt rate climbed from 1.1% to 1.3% over the same period, pushing net revenue leakage tied to denials and bad debt up roughly 25% year over year. Kodiak’s data points to a specific driver behind most of that increase: clinical denials, the category covering missing precertifications, prior authorizations, and medical necessity disputes, accounted for nearly all of the growth in denial rates.
On the practice side, Experian Health’s 2025 State of Claims survey of 250 billing and finance professionals found 41% now report denial rates of 10% or higher, up from 38% in 2024 and 30% when the survey began tracking the metric in 2022.
None of this means every practice is seeing an identical increase. It does mean the direction is consistent enough, across hospitals, health systems, and independent practices, that “our denials went up this year” is closer to the norm right now than the exception.
A NOTE ON THESE FIGURES
One clarification before moving on: the MGMA, Experian, and Kodiak figures above aren’t measuring the same thing, so they shouldn’t be read as three versions of one number. MGMA’s numbers reflect practice leaders’ own perception of where revenue is leaking. Experian’s 41% figure is the share of survey respondents who said at least 10% of their claims get denied. Kodiak’s 2.7% is an actual median final denial rate pulled from hospital claims data. All three point the same direction, but they’re not directly comparable to each other.
| Source | Finding | Year | What It Measures |
|---|---|---|---|
|
MGMA Stat (Jan 2026) |
Denials/appeals cited as the top revenue cycle leak (48%) |
2026 |
Practice leaders’ perception of where revenue leaks |
|
MGMA Stat (Mar 2024) |
60% reported an increase in claim denials year over year |
2024 |
Practice leaders’ perception of denial trend |
|
Experian Health |
41% of respondents reported denial rates of 10% or higher |
2025 |
Survey respondents self-reporting a denial-rate threshold |
|
Kodiak Solutions |
Median final denial rate rose from 2.5% to 2.7% |
2025 |
Actual hospital claims data (median final denial rate) |
|
AMA |
~39 prior authorization requests per physician/week, ~13 hours weekly |
2024 |
Physician-reported prior authorization workload |
Strip away the noise and the causes cluster into five categories, and they show up consistently across almost every industry survey on the topic. The most common claim denial reasons in that research include inaccurate or missing claims data, authorization issues, patient registration errors, coding problems, and medical necessity disputes.
Prior authorization and other clinical denial issues are among the biggest sources of payer-driven friction right now. Kodiak Solutions’ hospital data found that clinical denials, the category covering missing precertifications, prior authorizations, and medical necessity disputes, accounted for nearly all of the industry-wide growth in denial rates. On the practice side, the American Medical Association’s 2024 physician survey found practices complete an average of 39 prior authorization requests per physician every week, consuming roughly 13 hours of physician and staff time in the process. MGMA’s own denial-leak breakdown specifically calls out utilization management friction, both the pre-service authorization fight and post-service records requests, as one of the largest drivers of denials and appeals. Ask any front desk or billing staffer what eats the most of their week, and prior auth comes up before anything else. A missing or expired authorization is one of the easiest denials to prevent and one of the most common to see anyway, because tracking authorization status across dozens of payers by hand simply doesn’t scale.
A patient’s coverage changes mid-year more often than most front desks catch in real time. Experian Health’s 2025 survey found missing or inaccurate claims data is now the single most-cited driver of denials, reported by half of respondents, with incomplete authorizations and inaccurate patient registration information close behind. MGMA’s data tells the same story from a different angle, tying a meaningful share of current denials directly to eligibility and coordination-of-benefits problems, the kind of gap that starts at check-in and doesn’t surface until the claim comes back weeks later. It’s the same failure point our eligibility verification process is built around: skip the real-time check, and you’ve effectively pre-approved a denial before the visit even happens.
Medical necessity denials and bundling or global-package edits remain two of the most frequently cited denial categories in MGMA’s latest data, and Experian’s 2025 survey lists code inaccuracy among its top denial drivers too. Both point to the same underlying issue: documentation that doesn’t clearly support the code billed, or a code that conflicts with a payer’s bundling rules. New coding guidelines that take effect every January are a reliable trigger as well. Practices that don’t update their coding accuracy checks before the calendar flips tend to see a denial spike in Q1 that has nothing to do with patient volume and everything to do with a rule that changed on
January 1.
Increasingly automated claims review and payer-specific claim edits can flag more claims before or during adjudication. We’ve covered how far payer-side AI has gone in claims review and the legal scrutiny some of that automation is now facing, but the practical effect for billing teams is simpler: claims that would have cleared five years ago now get flagged for a missing modifier, a mismatched NPI, or an edit that didn’t exist last renewal cycle. For many provider-side teams, the volume of claims getting flagged appears to be outpacing how quickly pre-submission checks have been updated to catch up.
None of the above would sting nearly as much with a fully staffed billing team working every denial the day it lands. MGMA’s revenue cycle data has flagged staffing as a compounding factor for two years running: RCM role vacancies are hard to fill, wage pressure on the staff who remain keeps climbing, and without additional automation, practices may need meaningfully more gross revenue just to hold margins flat. It’s the quiet burnout that never makes it onto a dashboard: the same two people trying to work today’s denials, last month’s appeals, and this week’s eligibility checks all at once, with nothing actually getting their full attention. The longer a denial sits unworked, the greater the risk that filing deadlines, documentation gaps, or payer requirements will make recovery more difficult.
The fixes map directly to the causes above, and none of them require rebuilding your entire revenue cycle management process from scratch.
Every fix above works. The harder question for a lot of practices is whether their current team has the hours to run all five consistently, month after month, on top of everything else already on their plate: credentialing, patient calls, the claims that are due today regardless of what’s aging in the denial queue. A denial backlog that’s been aging for 90 days or more is a different problem than a fresh one, and by the time it’s old enough to be written off, recovering it takes a dedicated process, not a spare hour between other tasks.
This is where our denial management process at Scintillate RCM Healthcare typically comes in, not as a replacement for the fixes above, but as the team executing them consistently: real-time eligibility and authorization checks before submission, denial tracking broken out by payer, and an appeals workflow that actually gets worked instead of stacking up.
Here’s the uncomfortable version: every denial sitting in that untouched appeals folder isn’t lost revenue. It’s revenue you’ve already billed for but haven’t collected, stuck behind a prior auth gap, a stale eligibility check, or a modifier nobody caught before submission. Denials in medical billing aren’t climbing because payers got smarter. They’re climbing because the gap between payer speed and provider bandwidth keeps widening, and most practices are still trying to close it one claim at a time.
That gap is exactly where Scintillate RCM Healthcare works. Our denial management team catches eligibility and authorization issues before they become denials, tracks every rejection back to its actual root cause by payer, and works the appeals that are worth working, so the folder doesn’t sit untouched for three more weeks. Request a free denial audit and find out how much recoverable revenue may still be sitting in your denial queue.
A denial is a claim a payer refuses to pay, in full or in part, because of a documentation, eligibility, authorization, or coding issue, or because the payer disputes medical necessity. Denials are often categorized as hard or soft based on their likelihood of recovery and the action required: soft denials may be corrected and resubmitted, while hard denials are generally more difficult to recover and may require an appeal or ultimately be written off.
Multiple industry surveys point to the same drivers: tighter prior authorization requirements, more aggressive payer-side automated claims review, eligibility and coordination-of-benefits gaps, coding and documentation mismatches, and staffing shortages on the provider side that slow down front-end checks and appeals work.
It’s a real, measured increase, not just anecdotal. MGMA’s polling found 60% of practice leaders reported higher denials year over year, and Kodiak Solutions’ hospital data shows median final denial rates climbing from 2.5% to 2.7% in a single year. These figures aren’t directly comparable to each other, one is a perception survey and the other is actual claims data, but they point the same direction. For the current benchmark number itself, see our breakdown of revenue cycle KPIs and denial rate benchmarks.
Denial management is the ongoing process of identifying why claims are denied, correcting the root cause, and either appealing recoverable denials or writing off ones that genuinely aren’t payable. Done well, it includes root-cause tracking by payer, not just resubmitting claims one at a time as they come in.
Outsourcing doesn’t remove the underlying causes of denials, but it can add the dedicated bandwidth many in-house teams lack to run eligibility checks, denial tracking, and appeals consistently. Whether it’s worth it usually comes down to whether your current team can sustain that work at your current denial volume without other tasks slipping.
Free RCM Health Check. Receive a custom benchmark report comparing your performance against industry standards in 2 days.
Scintillate Healthcare LLC, Georgetown, Texas.
Cash Accelerated Care Elevated
