Rising inpatient claim denials drained $1.2B in hospital revenue: Report

The final denial rate on inpatient claims increased 51% between 2021 and 2023, according to a May 21 report from Kodiak Solutions (formerly Crowe). 

Kodiak's revenue cycle analytics software monitors patient financial transactions from more than 1,850 hospitals and 250,000 physicians nationwide.

The final inpatient claim denial rate, as measured by the dollar value of claims denied as a percentage of the total dollar value of inpatient claims, was 1.71% in 2021 and rose to 2.58% in 2023, according to the report. 

Kodiak Senior Vice President Colleen Hall said the increase in denials "drained $1.2 billion in revenue that hospitals and health systems rely on to provide care to their communities.

"On top of that, more initial claims denials mean hospitals are spending more money and other resources to appeal these denials, adding to the financial impact of the revenue loss from final denials," Ms. Hall said in a May 21 Kodiak news release. 

Kodiak said the increase in initial denials on inpatient claims by payers for prior authorization and precertification errors mirrors the increase in the final inpatient denials rate. Initial denials for these errors rose from 1.73% of the value of inpatient claims in 2021 to 2.18% in 2023, a 26% increase. 

Prior authorization and precertification initial denials are also up for outpatient procedures, from 0.93% of claims value in 2021 to 1.08% in 2023, a 16% increase, according to the report. 

Read the full report here

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