75% of health systems face rising claim denial rates

Claim denial rates are getting worse, with health IT company Experian Health reporting that 75% of healthcare revenue cycle leaders are seeing them climb.

For 40% of leaders, claim denial rates exceeded 10% of claims, the company said in its 2026 State of Claims Survey, which included responses from 204 healthcare revenue cycle experts.

These findings come as hospitals and health systems anticipate a revenue shortfall resulting from a growing uninsured rate. Changes in Medicaid eligibility, plus the lapse of premium subsidies on the Affordable Care Act Marketplace, could increase the uninsured population.

This means organizations need to ensure the claims they do produce don't get denied.

But according to 79% of the survey respondents, securing reimbursement is getting harder. For example, 68% of respondents said their denial rates are higher now than a year ago, and that's due in part to complexities around the medical coding and billing process.

More than three-quarters of respondents (78%) said payer policies are changing more frequently, up from 67% in Experian's first State of Claims survey in 2022. Another 65% said submitting clean claims has gotten more difficult in the past 12 months, and 64% said reimbursement timelines are getting longer.

All said, the leading drivers of denials include services not being covered by insurance, missing coverage information, coding errors, evolving payer policies and prior authorization issues.

Most revenue cycle leaders are laser-focused on reducing claim denials, with 89% saying it's a priority in their organization. But according to Mindy Fortson, Experian Health's chief operating officer, healthcare organizations need to move swiftly to assess the technologies that can help achieve better claim denial rates.

"Providers recognize that denials are a growing threat, but their response isn't keeping pace with the problem," Fortson said in a press release. "Concerns about cost, return on investment and the rapid evolution of AI may explain some of the hesitation. But waiting has a cost, too."

Healthcare organizations are increasingly acknowledging the role AI can play in supporting billing and coding, including AI that streamlines front-end data collection, eligibility verification, coordination of benefits and insurance discovery.

A sizeable 83% of revenue cycle leaders said they'd replace their current technologies if a new model could promise better ROI. Meanwhile, 64% said they definitely or probably will invest in AI for claims and denial management.

Just under half (48%) said they'll upgrade or replace claims technology this year, while 40% said they'll automate or expand portal claim reviews and 37% said they will digitize registration and automated payer-policy tracking.

"Every denial means more staff time spent reworking claims, longer reimbursement cycles and revenue that may never be recovered," Fortson explained. "Accurate data and the right technology can help identify problems upstream, reduce manual intervention and give revenue cycle teams a better opportunity to prevent avoidable denials before claims are submitted."

Sara Heath is an executive editor at Xtelligent Healthcare Media, where she covers patient engagement, healthcare policy and health IT.