Claim Denials: The Top Causes and How to Stop Them
Claim denials are one of the biggest leaks in a practice's revenue. Insurers selling ACA plans on HealthCare.gov denied about 19% of in-network claims in 2024, and some denied more than a third (KFF, 2026). Across more than 2,100 hospitals and 300,000 physicians, Kodiak Solutions found the initial denial rate reached about 11.8% of claims in 2024 (Kodiak Solutions).
The good news: many denials are preventable, and many that do happen can be overturned if someone actually works them.
Initial denials vs final denials
An initial denial is the first "no" from the payer. A final denial is what is left after corrections and appeals. Final denials are far less common: Kodiak put the median final denial rate at about 2.5% in 2024 and 2.7% in 2025 (Fierce Healthcare). Much of that gap is money that comes back only because someone corrected or appealed the claim.
The most common reasons claims get denied
Every denial comes with a Claim Adjustment Reason Code (CARC) that tells you why. The ones practices see most often:
Eligibility and coverage problems. The patient's plan changed, coverage lapsed or the service is not covered.
Missing or incorrect information (CO-16). A missing modifier, wrong patient detail or incomplete claim.
Duplicate claims (OA-18). The same service billed twice.
Missing prior authorization (CO-197). The service needed approval that was never obtained or had expired.
Medical necessity (CO-50). The documentation does not support the service billed.
Bundling and modifier errors (CO-97). A service the payer considers part of another service.
Timely filing. The claim was submitted after the payer's deadline.
How to prevent denials
Verify eligibility before every visit, not just the first one. Plans change.
Track authorizations and their expiration dates and visit limits.
Scrub claims before they go out for missing information and coding errors.
Keep documentation tight so it supports exactly what was billed.
Know each payer's filing deadline and submit well inside it.
Watch your denial trends. If the same reason keeps showing up, fix it at the source.
How to work the denials you already have
Sort by reason and dollar amount. Fix the patterns, and go after the biggest dollars first.
Correct and resubmit simple errors quickly.
Appeal when the claim was right. Include the documentation that proves it.
Track every appeal deadline. A missed appeal window usually means the money is gone.
Do not close denials without working them. Denials that get closed out instead of appealed are a common reason practices leave their billing company (PGM Billing).
What is changing in 2026
Starting in 2026, the CMS Interoperability and Prior Authorization rule requires Medicare Advantage plans, Medicaid, CHIP and ACA plans sold on the federal marketplace to give a specific reason when they deny a prior authorization request. Medicare Advantage, Medicaid and CHIP also have to decide most requests within 72 hours for urgent requests and seven calendar days for standard ones (CMS). Clearer reasons make it easier to fix and resubmit.
How Korps handles denials
Korps works your denials: we sort them by cause, fix what can be fixed, appeal what should be paid, and report the patterns back to you so they can be fixed at the source.
Frequently asked questions
What is a normal claim denial rate?
It varies widely by payer and specialty. A denial rate above about 5% is a common warning sign that something in the process needs attention.
Can a denied claim be resubmitted?
Yes. Many denials can be corrected and resubmitted, or appealed, as long as you are within the payer's deadline.
What does CO-16 mean?
The claim is missing information or has a billing error. Fix the missing detail and resubmit.
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