Claims denials continue to hurt hospital revenue: Report

An increasing rate in claims denials is once again having the most significant effect on hospital and health system revenue cycles, according to an Oct. 24 report from Kaufman Hall. 

For its "2023 State of Healthcare Performance Improvement" report, Kaufman Hall surveyed 106 hospital and health system leaders across the U.S. Most respondents were in executive leadership (62%) or finance (12%) roles. 

Seventy-three percent of respondents said they have seen an increased rate of claims denials. Claims denials were also the top revenue cycle issue in the 2022 survey. 

Kaufman Hall experts expect it will be a slow climb for hospitals to return to the 3% to 4% operating margins that help ensure long-term sustainability, according to an Oct. 24 news release from the organization. And while staffing and capacity issues have clear implications for revenue, the increased rate of claims denials has had the most significant effect on revenue during the past year. 

Those surveyed said they are tracking denial rates by payer and are using that data in contract negotiations, according to the report. Respondents said denials management is an issue across payers, but problems seem particularly acute in markets that have a higher penetration of Medicare Advantage plans.  

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