Medical Billing Denial Statistics 2026

Authoritative industry data on medical claim denials — denial rates, financial impact, payer benchmarks, top denial codes, appeal outcomes, and trends through 2026. Sourced from Change Healthcare, Experian, Premier Inc., MGMA, KFF, AHA, and CAQH. Updated April 2026.

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$262BClaims Denied / Year

11.8%Initial Denial Rate (2024)

65%Of Denials Never Reworked

70%Overturn Rate When Appealed

About this dataset

Every statistic on this page is sourced from primary industry reports published by Change Healthcare, Experian Health, Premier Inc., the Medical Group Management Association (MGMA), Kaiser Family Foundation (KFF), the American Hospital Association (AHA), and the Council for Affordable Quality Healthcare (CAQH). Source links are at the bottom of the page. Numbers cited reflect 2022–2024 data — the most recent comprehensive industry data available as of April 2026.

Compiled by: Go Medical Billing's editorial team, including AAPC-certified billing and coding specialists. See our editorial methodology for how this page is researched, fact-checked, and updated. We welcome corrections — email sales@gomedicalbilling.com with sourced data.

The Denial Volume Problem

Out of roughly $3 trillion in medical claims submitted by U.S. hospitals each year, approximately 9% are denied on first submission — equating to $262 billion in initially denied claims annually per Change Healthcare's Revenue Cycle Denials Index. This figure is gross denial volume, not net loss; most claims are eventually paid through corrections and appeals. But a meaningful portion never recovers.

Per Crowe RCA Benchmarking data, hospitals lost over $48 billion in 2024 to denied claims and uncollected patient balances — the actual write-off, not the gross volume. The cost of fighting denials, separately, reached $25.7 billion in 2023 per Premier Inc., a 23% increase from $19.7 billion the prior year.

Annual U.S. denial financial impact

Claims initially denied

$262B

Hospitals' true loss

$48B

Adjudication admin cost

$25.7B

Provider rework labor

~$20B

Sources: Change Healthcare, Crowe RCA Benchmarking, Premier Inc., AHA. Bar widths show relative scale.

Denial Rate Trends 2020–2024

The industry-wide initial denial rate has climbed steadily from 10.2% in 2020 to 11.8% in 2024 per Experian State of Claims Report 2025. The increase is not uniform — commercial payers and Medicare Advantage plans drove most of the rise. Medicare fee-for-service rates remained relatively stable. The administrative cost per denied claim also climbed, from $43.84 in 2022 to $57.23 in 2023, compounding the leakage.

Initial denial rate by year

Year	All-payer denial rate	YoY change	Admin cost per denial
2020	10.2%	—	—
2021	10.5%	+0.3%	—
2022	10.8%	+0.3%	$43.84
2023	11.2%	+0.4%	$57.23
2024	11.8%	+0.6%	$60+

Sources: Experian State of Claims Report 2025; Premier Inc.; CAQH Index. 2020–2021 admin cost data not separately tracked; 2024 estimated from quarterly trend.

Denial Rates by Payer

Denial rate varies dramatically by payer. UnitedHealthcare leads commercial denials at roughly 15.6% in MGMA survey categories, with Cigna close behind. Medicare fee-for-service is the lowest-denial major payer in U.S. medicine, but Medicare Advantage plans operated by commercial carriers behave like commercial payers and match or exceed those rates. The gap between best and worst payer relationships at a given practice often exceeds 8 percentage points — meaning a payer-specific prevention strategy is the highest-leverage place to invest.

Initial denial rate by major payer (2024)

UnitedHealthcare

15.6%

Cigna

13.0%

Humana

12.5%

Aetna

11.2%

BCBS (avg)

10.8%

Medicare Advantage

10.5%

Medicare FFS

5.4%

Sources: MGMA payer survey categories; Experian State of Claims Report 2025; Health Affairs (Medicare Advantage). BCBS varies dramatically by state plan; figure shown is national average.

Top Denial Reasons by CARC Code

Five CARC categories account for approximately 75% of all denials. The pattern is consistent across payers and specialties — meaning a focused prevention strategy on the top five categories can move denial rates dramatically. Each category has a distinct prevention pattern: eligibility issues are caught with real-time verification, missing information with payer-specific scrubbing, missing authorization with prior-auth tracking, coding errors with NCCI edits and AAPC-certified coding, and timely filing with daily submission discipline.

CO-16

Missing or invalid information

20%

Missing NPI, taxonomy, modifier, NDC, or CLIA. Fixable with corrected claim, not appeal.

Appeal strategy

CO-45

Charge exceeds allowed amount

28%

Mostly contractual write-offs. Investigate when amount is unexpectedly large (stale fee schedule).

Appeal strategy

CO-97

Bundled into another procedure

15%

NCCI bundling edit. Often fixable with modifier 25, 59, or X-modifiers (when MI=1).

Appeal strategy

CO-50

Not medically necessary

12%

Most-appealed CARC. Overturnable with clinical documentation citing LCD or medical policy.

Appeal strategy

CO-29

Timely filing limit exceeded

10%

Permanent denial. Rarely overturnable — fix is daily submission and 14-day status checks.

Appeal strategy

CO-15

Authorization not obtained

Prior auth missing or expired. Retroactive auth possible only in narrow emergency circumstances.

Appeal strategy

CO-109

Claim not covered by this payer

Wrong payer routing or non-covered service. Verify eligibility and benefits first.

Appeal strategy

CO-151

Frequency or units exceeded

Service exceeded payer frequency limit (PT visits, imaging, etc.). MUE rules apply.

Appeal strategy

Sources: Change Healthcare denial code distribution; CARC frequency data from major clearinghouse aggregations (Availity, Trizetto). Percentages are approximate industry averages and vary by specialty and payer mix.

The 70/35 Gap: The Single Most Important Statistic

70% of denials are overturned when appealed.
But only 35% are ever appealed at all.

Sources: Premier Inc. (overturn rate); MGMA/AHA/industry aggregates (appeal rate).

This gap is the entire denial economics story. Per Premier Inc.'s 2024 study, 70% of claim denials are ultimately overturned and the claim paid — meaning the underlying coverage and coding decisions were largely wrong. But per multiple industry surveys, only about 35% of denials are ever appealed by the provider. The other 65% are written off as bad debt, not because the claim was unrecoverable but because the labor cost ($25-118 per appeal per CAQH and MGMA) exceeded the claim value or the practice's bandwidth.

Multiplied across the U.S. industry, this represents tens of billions in legitimate provider revenue written off annually. For an individual mid-size practice billing $1.5 million per year at an industry-average 11.8% denial rate, the gap amounts to $50,000-$120,000 per year in recoverable revenue that goes uncollected because the practice cannot afford the labor to fight.

35%

Of denials are appealed

70%

Of appeals win

65%

Of denials never resubmitted

Denial Rates by Specialty

Denial rate varies dramatically by specialty. Behavioral health and surgical specialties run 4-6 percentage points above primary care averages, primarily because of authorization complexity, coding nuance, and payer policy density. The variance is meaningful — a specialty-specific billing strategy outperforms a generalist approach by 2-5 collection-rate points across the same payer mix.

Average initial denial rate by specialty

Behavioral health

16%

Anesthesia

14%

Orthopedics

13%

Cardiology

12.5%

Urgent care

12%

Pain management

11.5%

Internal medicine

10%

Family practice

OB/GYN

Dermatology

Sources: MGMA specialty benchmarking; AAPC specialty audit data; clearinghouse-aggregated denial rates. Figures are industry averages; individual practices vary based on payer mix and coding accuracy.

What It Costs to Rework a Denied Claim

The CAQH Index baseline is approximately $25 to rework a single denied claim — administrative salary cost only, for a straightforward correction. Complex appeals requiring clinical documentation, multiple submissions, peer-to-peer review, and follow-up routinely run $100 or more. The wide range explains the 65% non-resubmission rate: a $40 claim is not worth $50 of biller labor to fight.

$25

Baseline rework cost

Simple correction (CO-16 with corrected claim resubmission). Source: CAQH Index.

$57

Average admin cost (2023)

Per Premier Inc. — up from $43.84 in 2022, a 31% YoY increase.

$118

Complex appeal upper bound

Per MGMA — denials requiring clinical documentation, multiple submissions, peer review.

Patient Appeal Behavior (KFF Data)

On the patient side, the appeal gap is even wider. Per Kaiser Family Foundation analysis of 2024 ACA marketplace plans, fewer than 1% of in-network denied claims are appealed by patients. Of more than 48 million in-network denied claims in 2021, marketplace enrollees appealed only 90,599 — an appeal rate of less than two-tenths of one percent. When patients do appeal, success rates are mixed: insurers upheld their original decision in 66% of cases.

"Of more than 48 million in-network denied claims in 2021, marketplace enrollees appealed only 90,599 — an appeal rate of less than two-tenths of one percent. When patients do fight back, studies suggest up to 80% of appeals can be successful."

Kaiser Family Foundation, Claims Denials and Appeals in ACA Marketplace 2024

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Medical Billing Denial Statistics: FAQ

Common questions about industry denial data, sourced from primary research.

Approximately $262 billion in claims are initially denied each year per Change Healthcare's Revenue Cycle Denials Index. Of that, hospitals alone lose over $48 billion to denials and uncollected bills per Crowe RCA Benchmarking data. The administrative cost of fighting denials reached $25.7 billion in 2023 per Premier Inc., a 23% increase year over year.

The industry-wide initial denial rate hit 11.8% in 2024, the most recent year for which complete data is available, per the Experian State of Claims Report 2025. This is up from 10.2% just a few years earlier. Commercial payers run 10-16% depending on payer (UnitedHealthcare and Cigna lead). Medicare fee-for-service runs 4-6%. Medicare Advantage plans match or exceed commercial denial rates.

Roughly 35% of denied claims are appealed by providers per industry surveys, leaving 65% never resubmitted. On the patient side, the gap is even wider: per KFF data on 2024 ACA marketplace plans, fewer than 1% of in-network denied claims are appealed by patients. Of provider appeals that are filed, Premier Inc. data shows 70% are ultimately overturned.

$25 to $118 per denial in biller labor, depending on complexity, per CAQH Index and MGMA data. The CAQH baseline is approximately $25 per straightforward correction. Complex appeals requiring clinical documentation, multiple submissions, and follow-up routinely run $100+. The wide range explains why most practices triage denials by claim value — and why 65% of denials are never reworked at all.

Among major commercial payers, UnitedHealthcare consistently leads in initial denial rate, posting 15.6% in several MGMA survey categories. Cigna runs roughly 13%. Aetna and BCBS plans run 10-12% with state-by-state variation. Medicare fee-for-service is the lowest-denial major payer at 4-6%. Medicare Advantage plans operated by Humana, UHC, and Aetna apply commercial-style denial logic and match commercial rates.

Five categories account for roughly 75% of all denials: eligibility issues (CARC CO-4, PR-1, PR-2 — about 25%), missing or incorrect information (CO-16 — 20%), authorization not obtained (CO-15 — 15%), coding errors including CO-97 bundling (15%), and timely filing violations (CO-29 — 10%). The remaining 25% spans contract disputes, duplicate claims, non-covered services, and patient-eligibility edge cases.

Resubmissions on fixable denials (CO-16) typically pay within 30-60 days of the corrected claim. Appeals on overturnable denials (CO-50, CO-97) take 60-180 days through internal payer review. Claims escalated to external review under the ACA can take 6-12 months. Roughly 50% of overturned denials require multiple rounds of review per AHA data, compounding the timeline and cost.

Yes. The industry-wide denial rate increased from 10.2% to 11.8% between 2020 and 2024 per Experian. Commercial and Medicare Advantage plans saw 1.5% and 4.8% spikes respectively from 2023 to 2024. Administrative cost per denied claim increased from $43.84 in 2022 to $57.23 in 2023. Rising denial rates plus rising rework costs compound to a worsening leakage profile across the industry.

Five interventions move the needle: real-time eligibility verification 48-72 hours before service (kills 25% of denials), payer-specific clean-claim scrubbing rules at submission (kills CO-16 denials), running NCCI edits before submission (kills CO-97 bundling), AAPC-certified coders trained on annual ICD-10/CPT updates, and a denial-management workflow that appeals every overturnable denial within 48 hours of receipt. Top-quartile practices using all five maintain denial rates below 4%.

Cite or embed this data

Journalists, bloggers, and healthcare analysts are welcome to cite this page. Suggested attribution:

Source: Go Medical Billing, “Medical Billing Denial Statistics 2026,” updated April 2026. https://gomedicalbilling.com/medical-billing-denial-statistics-2026

For media inquiries, original chart files, or specific specialty/payer data cuts not shown here, email sales@gomedicalbilling.com.

Sources

Primary research and aggregated industry reports cited on this page.

Change Healthcare. Change Healthcare 2022 Revenue Cycle Denials Index
Experian Health. Experian State of Claims Report 2025
TechTarget / Crowe RCA Benchmarking. Hospitals lost over $48B from claims denials, uncollected bills
Premier Inc.. Claims Adjudication Costs Providers $25.7 Billion
American Hospital Association. Payer Denial Tactics: $20 Billion Problem
Kaiser Family Foundation. Claims Denials and Appeals in ACA Marketplace 2024
Medical Group Management Association. MGMA Stat: 6 keys to addressing denials
Council for Affordable Quality Healthcare. CAQH Index Annual Report

Last updated April 2026. We update this page when new primary industry data is published. See our editorial methodology for review and update cadence.

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