Where revenue leaks, payer by payer
Revenue cycle results come down to yield: what you bill, what you collect and what you keep. This article sets out where money is lost, which formats decide payer outcomes, where agents act in the cycle, and which decisions stay with coders, clinicians and your contracting lead. The figures below are industry averages from named sources. Your own remittance files set your baseline.
Denials are high, and more money moves after payment
Kodiak Solutions, drawing on data from more than 2,300 hospitals and 375,000 physicians, put the average initial denial rate at 11.6% in 2025, up from 11.4% in 2024 (Kodiak Solutions via Business Wire, 2026). In the first half of 2026 initial denials fell, but payer takebacks rose to 1.57% of accounts receivable (A/R), from 1.38% in the first half of 2025 (Kodiak Solutions, 2026). A falling denial rate can sit alongside money taken back months later, so we watch both.
Many denials are preventable, and many are winnable
Many denials start at registration. Change Healthcare's 2020 denials index found registration and eligibility to be the largest cause, at about 27% of denials, and judged 86% of denials potentially avoidable (HFMA, 2020). That data is now six years old.
Many others can be won on appeal, yet few are appealed. KFF found that Medicare Advantage insurers fully or partially denied 7.7% of nearly 53 million prior authorization requests in 2024. Only 11.5% of those denials were appealed, and 80.7% of the appeals were fully or partially overturned (KFF, 2026).
What a denial costs to work
Premier's survey of 280 hospitals put the average cost of contesting a denied claim at $57.23 in 2023, up from $43.84 in 2022, and found about 70% of contested claims were eventually paid (Premier, 2025). For physician practices, an older MGMA figure puts the cost at about $25 per reworked claim, and found that more than half of denied claims are never reworked (AAFP Family Practice Management, 2015). Treat that figure as dated.
Where agents act in the cycle
Agents work inside the systems you already run: your practice-management system and EHR, your clearinghouse, payer portals and your bank deposit file. Across the cycle they:
- Registration: read card images, normalize names and dates of birth, and flag a missing secondary plan.
- Eligibility: run the electronic check at scheduling and before each visit, read the service-level benefits, and route the claim to the right plan and payer ID.
- Prior authorization: detect when one is needed, assemble the packet from the chart, submit it, track it, and warn before authorized units or dates run out.
- Coding: suggest codes with a link to the supporting text in the note, and check them against the National Correct Coding Initiative edits (CMS, updated quarterly).
- Scrubbing and submission: apply payer-specific edits learned from your own remittance history, and work 277CA rejections every day, because a rejected claim never reached adjudication.
- Remittance posting: post each 835, match it to its bank deposit, and compare allowed amounts with your contract rates to find underpayments and takebacks.
- Appeals: rank denials by amount, likely outcome and cost to work, assemble a packet that cites the chart and the payer's own policy, draft the letter and track the deadline.
- Patient statements: produce plain-language statements and answer balance questions.
Each action is logged with the evidence it used.
The formats that decide outcomes
Claims move as X12 transactions: 837 claims, 277CA acknowledgements, 278 authorization requests, and 835 remittances that carry Claim Adjustment Reason Codes (X12, 2025 list). Three dates matter now:
- Beginning 1 January 2027, payers covered by CMS-0057-F, including Medicare Advantage plans, Medicaid and CHIP programs and plans, and plans on the federal exchanges, must run FHIR prior authorization APIs (CMS, 2024).
- Claims attachments now have a HIPAA standard, with compliance due 26 May 2028 (CMS, 2026).
- In December 2025, X12 recommended that every HIPAA-mandated transaction move to version 008060 (X12, 2025). We found no proposed federal rule as of October 2026.
Because of that last point, we treat the transaction version as configuration.
Keep a second route to every payer
During the 2024 Change Healthcare outage, 67% of hospitals responding to an AHA survey said switching clearinghouses was difficult or very difficult (American Hospital Association, 2024). We keep a secondary clearinghouse or a direct payer connection enrolled, and reconcile submitted, acknowledged and paid claims daily so a gap shows up quickly. The system page explains how connections are set up.
Where people stay
- A certified coder approves any code change that raises reimbursement.
- A clinician signs every medical-necessity appeal, and peer-to-peer calls stay with clinicians.
- Your contracting lead approves every payer dispute.
- Write-offs above a threshold you set need approval.
Appeals depend on documentation that supports the billed service, which is what our clinical audit checks each night. How people review agents' work is on the human review page, and patient-side coverage checks start at intake.
What we measure
We track initial denial rate by reason, final write-offs, appeal overturn rate, days in A/R and takebacks, using HFMA's MAP Key definitions so the figures compare with industry data (HFMA, current definitions). For physician practices, AAFP guidance puts days in A/R under 50 at a minimum, with 30 to 40 preferable (AAFP, current guidance).
We set no target until your own 837 and 835 files show where you start. How fees work is on our pricing page.