Denial Rates Are Climbing: What Healthcare Revenue Cycle Leaders Should Be Watching in 2025

Claim denials are no longer just an operational hiccup—they’re becoming a serious financial liability for healthcare organizations. So far in 2025, we’re seeing denial rates continue to rise, fueled by more rigorous payer guidelines, expanding automation in claims processing, and a changing regulatory landscape. For revenue cycle leaders, the message is clear: staying informed and proactive is essential to protect revenue and maintain a healthy bottom line.

What’s Driving Denial Activity in 2025?

Denials are trending upward, but several underlying shifts are making them more complex to manage:

• Denial Rates on the Rise
  Initial claim denials hit 11.8% in 2024—up from 10.2% just a few years earlier.

• Commercial and Medicare Advantage Plans Are a Big Factor
  Denials from commercial plans rose by 1.5%, while Medicare Advantage plans saw a 4.8% spike from 2023 to 2024.

• AI Is Now a Key Player
  Payers are leveraging artificial intelligence to automate claim reviews, but the speed and scale come at a cost. There are increasing reports of inaccurate denials—like one instance where over 300,000 claims were allegedly denied in under two months.

Denial Trends Every RCM Leader Should Monitor

1. Tougher Prior Authorization Rules

Payers continue to tighten their requirements for prior authorizations, especially for expensive treatments, diagnostic imaging, and elective procedures.

What you can do:

• Deploy automation tools to streamline PA requests

• Ensure staff are trained on the latest payer protocols

2. More Denials Based on Medical Necessity

Claims are facing increased scrutiny, with AI being used to flag cases that may not meet the payer’s definition of medical necessity.

What you can do:

• Prioritize strong documentation that clearly supports clinical decisions

• Use analytics to spot patterns and prevent repeat denials

3. Social Determinants of Health (SDOH) Now Matter

More payers are factoring in SDOH data—like access to food, transportation, or safe housing—when reviewing claims.

What you can do:

• Integrate SDOH screening into your intake workflows

• Partner with community organizations to support holistic care

4. Out-of-Network (OON) Services Face Extra Scrutiny

The No Surprises Act is tightening rules around out-of-network billing, and many providers are seeing increased denials for emergency or specialist services that lack pre-approval.

What you can do:

• Review and expand in-network contracts where possible

• Educate patients about network limitations and cost expectations

The Cost of Denials Is Bigger Than You Think

Denials don’t just delay revenue—they eat into it:

• Rework Expenses: Each denied claim costs providers between $25 and $181 to correct and resubmit

• Revenue Leakage: Unresolved denials can lead to substantial write-offs, particularly in hospital settings

• Staff Time: Managing denials consumes valuable time and resources that could be better spent on patient-focused operations

Smarter Technology = Smarter Denial Management

The good news? Technology is making it easier to take control:

• AI & Predictive Analytics: Spot denial trends before they happen and take preemptive action

• Workflow Automation: Automate tasks like eligibility checks and claim scrubbing to reduce human error

• Real-Time Monitoring: Keep tabs on denial rates and root causes with up-to-the-minute analytics

How OS inc. Helps Healthcare Organizations Take Control of Denials

At OS inc., we believe denial management isn’t just about recovery—it’s about prevention. Here’s how we help:

• Proactive Denial Prevention
  We identify issues before claims are submitted—whether it's a missing authorization, a coding error, or a payer-specific requirement that’s likely to trigger a rejection.
  
  
• Dedicated Denial Resolution Experts
  Our team manages denials end-to-end—from root cause analysis to appeal submission—lightening the load for your internal staff.
  
  
• Continuous Improvement Through Root-Cause Insight
  We don’t just fix denials—we learn from them. OS inc. turns denial data into actionable intelligence that improves your upstream processes.
  
  
• Payer Knowledge & Industry Awareness
  We stay ahead of evolving payer rules and leverage our experience with national payers to ensure faster, more effective resolution.

With OS inc., you don’t just chase denials—you get ahead of them.

Denials aren’t going away—but your approach can evolve. The organizations that will thrive in 2025 are the ones that treat denial management as a strategic imperative, not just a clean-up task. By investing in smarter systems, better training, and experienced partners like OS inc., you’ll not only reduce rework—you’ll strengthen your entire revenue cycle.

Need a partner that can help you navigate today’s denial challenges?
Contact OS inc. to learn how we can support your team with denial prevention and recovery solutions tailored to your organization’s needs.

References

• HealthLeaders Media – 3 Revenue Cycle Trends to Watch in 2025

• LinkedIn – Denial Trends 2025: What Healthcare Providers Must Know (Abdul Hameed)

• The Guardian – Health Insurers Used AI to Deny Care

• LinkedIn – Healthcare Claim Denial Trends and Their Impact (Lokesh Gupta)

• Benji Health – Trends to Watch in Healthcare RCM in 2025

• Adonis – Top Revenue Cycle Management Trends for 2025