Report: Front-end revenue cycle processes leading cause of denials

According to a report published by Change Healthcare, 23.9 percent of claim denials are due to errors during front-end revenue cycle processes such as registration and eligibility.

Change Healthcare examined 724 hospitals’ primary inpatient and outpatient claims processed from 2016. When analyzing the causes of denials, the report found that 14.6 percent of denials were due to invalid claim data (back-end process) and 12.4 percent of denials were due to authorization/precertification (mid-cycle process).

The results also showed that denial rates are highest in the Pacific region at 10.89 percent, and lowest in the Northern Plains region at 6.64 percent.

On average, hospitals are spending $8.6 billion in administrative costs nationally, the report said. This breaks down to an average appeals cost of $118 per claim. Of these claims, 63 percent are recoverable on appeal, the report stated.