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.
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.
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
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:
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)
LinkedIn – Healthcare Claim Denial Trends and Their Impact (Lokesh Gupta)
Do not forget to subscribe to Revenue Cycle Matters for healthcare billing best practices and industry tips!