June 26, 2017 -- Out of an estimated $3 trillion in medical claims submitted by hospitals in the U.S. last year, an estimated 9% of charges ($262 billion) were initially denied, according to an analysis by Change Healthcare.
As much as 3.3% of net patient revenue, an average of $4.9 million per hospital, was put at risk due to denials, the group found. About 63% was recoverable, but reworking each denial costs providers roughly $118 per claim, or as much as $8.6 billion in appeals-related administrative costs.
The data were culled from a sample of more than 3.3 billion hospital transactions valued at $1.8 trillion and are based on primary institutional in- and outpatient claims from 724 hospitals. Change Healthcare then extrapolated the total claimed charges and denied amounts for the nation's 5,683 hospitals from the sample data. An appeal success rate of 63% for hospital customers and average reimbursement rate of 29% were used to calculate the amount denied.
To see the full analysis, including a breakdown of denial trends by geographic region and causes, go to MyHealthyHospital.com.