Why Half Your Denials Go Unrecovered (and How to Fix It)

Most healthcare organizations lose revenue every day—and don’t even know it.

The culprit? Unrecovered denials.

Studies show that up to 65% of denied claims are never reworked, meaning millions of dollars in potential reimbursement are written off or forgotten.

In this blog, we’ll break down why denials go unresolved, what that’s costing your organization, and how to fix it with proactive denial management, medical billing optimization, and smarter revenue cycle workflows.

The Denial Rework Problem

When a claim is denied, it doesn’t mean it’s lost—but for many organizations, that’s exactly what happens. Denials are rarely tracked systematically, assigned for follow-up, or appealed on time.

Why Denials Go Unrecovered:

• No centralized denial tracking process

• Lack of staff capacity for rework

• Unclear ownership between billing and coding teams

• Denial fatigue or prioritization of newer claims

• Inadequate analytics to identify root causes

If your denial rate is 10% or higher—and over half of those are going unworked—you're leaving significant revenue behind.

The Financial Cost of Unworked Denials

Unrecovered denials create both immediate losses and long-term revenue cycle inefficiencies:

• Lost healthcare reimbursement on billable services

• Higher aging accounts receivable

• Lower net collection rates

• Increased administrative costs per dollar collected

• Inaccurate forecasting and budgeting

Worse, when denied claims aren't reviewed, the same errors get repeated—wasting staff time and prolonging payment delays.

5 Steps to Fix the Denial Recovery Gap

Improving your denial management doesn’t require a full system overhaul—it starts with visibility, accountability, and process.

1. Track Every Denial

Use your billing platform or a denial management system to log:

• Payer

• Denial reason

• Claim amount

• Date denied

• Status (reworked, appealed, paid, or written off)

This baseline is essential for any recovery strategy.

2. Categorize by Denial Type

Not all denials are created equal. Split denials into buckets:

• Authorization required

• Eligibility issue

• Coding error

• Modifier mismatch

• Timely filing

This helps isolate patterns and assign resolution paths.

3. Assign Ownership and Timelines

Every denial should have an owner and a deadline.
Set internal SLAs (e.g., 3 days for review, 7 days to resubmit).
This reduces denial backlog and ensures high-value claims don’t fall through the cracks.

4. Focus on High-Impact Rework

Not all denials should be appealed—but high-dollar or high-likelihood claims should be prioritized.
Use filters to find and fix the most recoverable revenue first.

5. Use Data to Prevent Repeat Errors

Denial data should flow back to your medical billing optimization process.
Retrain staff, update payer rules, and adjust coding protocols to reduce repeat denials.

Bonus: Monitor Denial KPIs

To know if your efforts are working, track:

• Denial rate

• Rework success rate

• Days to denial resolution

• Top 5 denial reasons

• AR over 90 days linked to denials

These revenue cycle KPIs will help you measure progress and allocate staff effectively.

Final Thoughts: Denials Are Recoverable—If You Act

Half of all denials go unrecovered not because they can’t be fixed—but because they aren’t followed up.

With better tracking, assigned ownership, and a focused rework process, your team can convert lost claims into recovered revenue—and use those insights to build a cleaner claim pipeline moving forward.

Want help reviewing your denial patterns or setting up a recovery workflow?