It’s no surprise that denials are on the rise. You see it in your margins and feel it in your staff’s morale. Data from the Medical Group Management Association (MGMA) showed that medical groups saw a 60% increase in denials in 2024—and that was before payers were relying heavily on AI.
Historically, organizations have “treated” denials retroactively, putting their spend into appeals. But the sheer volume of denials no longer makes that an effective strategy. The key now? Shifting dollars into upstream denials prevention.
Downstream Work (and Rework) Is Costly
Appeals and re-submissions are labor-intensive and expensive. According to the Healthcare Financial Management Association (HFMA), the average cost to rework a denied claim is between $25 (MGMA) and $118 (Change Healthcare).
And payers follow-ups can take forever. Additional MGMA data shows that there’s an overall increase in accounts receivable over 120 days for many medical groups, sharply reducing collection probability.
Upstream Work Is Where Prevention Begins
Shifting your spend upstream can feel a little daunting, but the numbers play out. A 2024 Advisory Board report found that early intervention and workflow redesign can recover up to $10 million per $1 billion in patient revenue (HFMA).
But what’s the best way to execute? Let’s take a deeper look at these three touchpoints: patient intake and eligibility, pre-claim coding analysis, and pre-billing review.
Patient Intake & Eligibility
When it comes to patient intake, a single typo or missed input can trigger an immediate denial. But the patient intake process can be monotonous manual work, prone to human error.
The solution? Automation. Look for Patient Intake tech customized to your organization. It should be as user-friendly for the patient as it is for your staff. And that same staff still needs to stay a part of the equation, assessing the output, and acting as a “last pass.”
Automation can also play a critical role in eligibility. Real-time verification reduces risk of uncovered services and gives patients proactive transparency about out-of-pocket costs. And with up to 30% of denials linked to eligibility issues (MGMA), ongoing verification can act as a further fail-safe throughout the billing cycle.
Idea: Run automated eligibility checks against the next day’s schedule every evening to identify coverage issues before the patient arrives.
Pre-Claim Coding Analysis
Modern tools are once again key to unlocking confidence in your pre-claim coding. Look to AI to scrub claims for errors in the areas that most commonly trigger denials—CPT, HCPS, modifiers, and diagnosis codes. Coding analysis should also verify that medical policy requirements have been met, going a step beyond authorization confirmation.
Your people remain a critical part of the process, but as a final strategic intervention. Have them perform a pre-bill coding audit to ensure submissions are correct and complete.
Idea: Identify your 10 most frequently denied codes and require an additional review before submission.
Pre-Billing Review
Now it’s time to review the claim as a whole. This is the final moment to catch any errors—and check that the clinical documentation supports the codes that are being billed.
To do this most effectively, it’s best to once again leverage a mix of modern tech and your people. Use automation to flag claims that need review and to prioritize high-dollar cases. Pair this with well-trained auditing staff to ensure correct coding and DRG validation.
In the past, pre-bill reviews might have significantly raised the unbilled rate, but tech now makes this process not only more effective, but efficient—with medical centers reporting millions in revenue lift just from adding pre-bill reviews alone.
Idea: Rotate auditing staff across payers to build deeper understanding of payer-specific requirements and denial trends.
Upstream Tech & ROI: What to Look For
Technology isn’t a low-cost investment, especially if it’s good. So how do you evaluate which upstream tools will give you the highest return? Look for these essential qualities:
Integration – tech should seamlessly flow with your EHR and PMS
Intelligence – solutions should tell you why errors happened and how to fix them
Transparency – front-end denial rates should be included in a dashboard so you can track the tech’s ROI
The Result: Improved Margins & Patient Experience
This upstream denials prevention approach gives you more cash flow security and higher margins—margins you can reinvest back into your organization—while also improving the patient experience, making costs more transparent and visits much more seamless.
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