50+ US Healthcare Denial Rates & Reimbursement Statistics for 2025

The US healthcare payment landscape has become noisier and more consequential: denials, improper payments, and reimbursement disputes are swallowing time and margin across providers and payers. Claims that once cleared automatically now often run through complex rules, automated checks, and frequent manual rework.

The result is growing administrative costs and delayed revenue for hospitals, physician practices, and patients alike.

This article collects more than 50 recent statistics about denial rates, improper payments, denial reasons, appeals, financial impact, and the role of technology for clinicians, revenue-cycle leaders, and policy teams, in the following categories:

1. National Denial Rates & Scale of the Problem

2. Payer Types, Improper Payments, and Government Programs

3. Top Reasons Claims Are Denied

4. Operational and Financial Cost of Denials

5. Appeals, Overturn Rates, and Patient Impact

6. Technology, Automation, and Emerging Trends

To begin, we will detail what healthcare denial rates and reimbursements are, and why they are so important for healthcare organizations.

What Are Healthcare Denial Rates and Reimbursement?

In the US healthcare system, every claim submitted to an insurer (whether a commercial health plan, Medicare Advantage plan, or Medicaid) goes through a review process before it is paid. A denial occurs when a payer rejects part or all of that claim. Denials can happen for multiple reasons, including prior authorization errors, coding mistakes, or a lack of medical necessity documentation.

Denial rates measure how often claims are rejected, either initially or after review. Recent federal data and reports from organizations like the Kaiser Family Foundation (KFF), CMS, and Experian Health show how widespread the problem has become.

Reimbursement refers to the amount providers ultimately receive for care delivered, after denials, appeals, and adjustments. While some claims are initially denied and later overturned, many are never resubmitted, leaving healthcare providers with lost revenue. This makes accurate claims submission and effective denial management central to financial performance.

Why Healthcare Denial Rates and Reimbursement are Important

High claim denial rates are not just a billing inconvenience. They represent a strategic and financial risk for healthcare organizations. Claims denied by health insurers create an administrative burden, requiring staff to rework claims, file appeals, and navigate complex payer rules. Industry findings suggest that reworking a denied claim can cost between $25 and $181, adding significant overhead to already strained revenue cycle teams.

For health systems, physician groups, and ambulatory practices, the impact is twofold. First, denied claims delay cash flow, forcing providers to wait weeks or months for reimbursement. Second, many denials are never overturned, leading to permanent revenue loss.

Patients also feel the impact. Insurance denials can delay care, increase the likelihood of unexpected bills, and create confusion about coverage. By staying current with new data, healthcare providers can ensure that they are proactively identifying denial patterns, implementing preventive strategies, and optimizing their revenue cycle processes. Here are the latest statistics.

Statistics of National Denial Rates & Scale of the Problem

Claim denials are no longer a rare exception; they are a persistent revenue-cycle headwind for many organizations. The growing frequency and financial impact of denials underscore why hospitals, health systems, and physician groups now treat denial management as a top strategic priority.

Below are national and broad-market measures that illustrate how common and costly denials have become:

• About 19% of in-network claims submitted through HealthCare.gov insurers were denied in 2023. (KFF)

• In 2023, Affordable Care Act (ACA) marketplace plans reported roughly 49 million denied in-network claims across plans. (KFF)

• Initial denial rates across Medicare Advantage averaged about 15.7%. (AHA)

• Commercial payers’ initial denial rates have been estimated at roughly 13.9%. (AHA)

• Providers report denial rates of 10% or higher; recent surveys show roughly 38–41% of providers now experience denial rates ≥10%. (Managed Healthcare Executive)

• An analysis of more than 441 million claim remits shows denials are trending up and putting billions at risk annually. (Optum)

• In 2024, initial denial rates increased to 11.81%. (Becker’s Payer)

• OS Healthcare reports initial claim denials hit 11.8% in 2024 (up from ~10.2% earlier). (OS Healthcare)

• According to Experian’s “State of Claims,” 38% of respondents say at least one in ten claims is denied. (Experian)

These statistics show that denial rates are not small, static, or trivial. They’re rising, widespread, and diverse across payer types.

Statistics of Payer Types, Improper Payments, and Government Programs

Different payer segments (Medicare FFS, Medicare Advantage, Medicaid, commercial/marketplace) show different denial and improper-payment dynamics. These variations matter because they shape provider workflows, reimbursement timelines, and compliance risks in unique ways.

Below are figures highlighting program-level improper payments and payer-specific denial patterns:

• Medicare Fee-for-Service had an estimated improper payment rate of 7.38%. (CMS)

• CMS estimated Medicare Part C (Medicare Advantage) improper payments at about 5.61%. (CMS)

• CMS reported Medicare Part D improper payments around 3.7–3.72%. (CMS)

• The government estimated Medicare + Medicaid improper payments exceeded $100 billion in FY2023. (GAO)

• Hospitals spent an estimated $19.7 billion trying to overturn denied claims. (AHA)

• Analyses of marketplace insurers showed HealthCare.gov plan denial rates near 19–20%. (KFF)

• In Medicare Advantage settings, one study found initial denials at 17%. (Health Affairs)

• Studies show that of denied Medicare Advantage claims, 57% were ultimately overturned on appeal. (Health Affairs)

• In private payer insurance, claims denials rose from 8% to 11% between 2021 and 2023. (Aspirion)

• According to MDClarity, a survey of 516 hospitals found private payer denial rates averaged 15%. (MDClarity)

These numbers show how risk and denial pressure vary across payer types and fronts.

Statistics of Top Reasons Claims Are Denied

Understanding the “why” is vital to fixing the problem. By analyzing the root causes, providers can target their interventions more effectively and reduce preventable revenue loss.

These stats break down cause categories for denials:

• In provider surveys, 68% said inaccurate or incomplete patient data at intake is a primary driver of denials. (Experian)

• Prior authorization problems (missing or incorrect authorizations) rank among the top causes. (Becker’s Hospital Review)

• Provider eligibility/coverage verification errors are often listed among the top-5 denial causes. (Becker’s Hospital Review)

• Coding inaccuracies and missing CPT/ICD codes remain the leading denial categories. (AMA)

• Up to 49% of claims in some analyses are affected by “routine” coding/documentation issues. (Altruis)

• Experian found prior authorization/data interoperability issues growing as denial drivers. (Experian)

• Lack of medical necessity documentation is a meaningful share of denials in Medicare / commercial reviews. (AHA)

• Administrative eligibility errors (wrong member ID, demographic mismatch) are frequently cited. (Experian)

• Denials related to medical necessity and requests for more information rose in 2024. (Becker’s Payer)

Here is a short-ranked list of the top three operational fix areas most frequently recommended by revenue-cycle leaders:

1. Clean intake and eligibility verification processes to eliminate preventable denials.

2. Automate and centralize prior authorization workflows.

3. Improve clinical documentation and coding review before claim submission. (Experian)

Addressing those three core drivers can prevent a large share of denials.

Statistics of Operational and Financial Cost of Denials

Denials are not just a percentage; they translate into real staff hours, rework cost, and lost yield. For many organizations, these costs quietly compound into millions of dollars in avoidable expenses each year.

The numbers below quantify operational impact and broader financial consequences:

• Administrative cost per denied claim increased from $43.84 in 2022 to $57.23 in 2023. (Premier, Inc.)

• The average cost to rework a denied claim ranges between $25 and $181. (AHIMA Journal)

• One analysis estimates providers spend $25.7 billion annually on claim adjudication. (Premier, Inc.)

• Many providers report that 35–60% of returned/denied claims are never resubmitted. (AHIMA Journal)

• Labor accounts for ~90% of claims processing expense, making denials a labor-cost multiplier. (Premier, Inc.)

• Denials of 10%+ substantially erode workflow efficiency and increase backlog. (AGS Health)

• RCM turnover rates range from 11% to 40%, stressing staffing capacity. (Thoughtful.ai)

• The U.S. healthcare system spends $60 billion on administrative tasks annually; claims submission costs jumped 83%. (Thoughtful.ai)

Denials, therefore, eroded margin both via lost yield and added administrative burden. A prevention program often pays for itself via reduced rework, fewer appeals, and shorter A/R days.

Statistics of Appeals, Overturn Rates, and Patient Impact

How often are denials appealed and overturned? The likelihood of success often depends on payer type, documentation quality, and organizational persistence.

The following figures show how appeal practices and outcomes shape financial and patient impact:

• When enrollees challenge coverage denials, ~17% reported insurers denied doctor-recommended care; over half did not contest the denial. (CommonWealth Fund)

• In 2023, fewer than 1% of denied ACA marketplace claims were appealed, and insurers upheld 56% of those appeals (KFF).

• Marketplace insurers reported millions of denied claims in 2023; few enrollees appeal, and many appeals are upheld. (KFF)

• In some payer environments, algorithmic denials are later reversed after human review. (Investopedia)

• Patient surveys show nearly 60% of adults who experienced a coverage denial had their care delayed as a result. (CommonWealth Fund)

• In Medicare Advantage, 57% of initial denials were overturned on appeal. (Health Affairs)

• One industry report notes that 60–80% of insurance denials were overturned in certain states. (Flobotics)

• According to Managed Healthcare Executive, ~41% of providers now face denial rates of at least 10%. (Managed Healthcare Executive)

Appeals are possible, but many patients and providers do not pursue them. A robust appeals program with a data-driven approach can be used to recover meaningful revenue.

Statistics of Technology, Automation, and Emerging Trends

Automation and AI are changing how denials are generated, contested, and prevented. Early adopters are already seeing measurable reductions in denial rates and faster reimbursement cycles.

Below are recent adoption, effect, and trend metrics illustrating tech’s role:

• About 17% of medical groups report that over 60% of their revenue cycle operations are automated. (MGMA)

• Many organizations now use denial prevention/automation tools to cut rework and intake errors. (Experian)

• One article reports payers now use AI to reject claims; from 2022 to 2024, denials triggered by requests-for-information (RFIs) increased by 9%. (Aspirion)

• New tools automatically generate appeal drafts for algorithmic denials to aid providers and patients. (The Guardian)

• Vendors analyzing hundreds of millions of remits show that proactive edits and rules engines catch denial triggers before submission. (Optum)

• Automation and analytics tools are credited with helping denials exceed 10–15% thresholds in some provider types. (AGS Health)

• Some AI/algorithmic insurer denial systems (e.g., nH Predict) are alleged to drive automatic denials of 50–75% of decisions. (Wikipedia/nH Predict)

• Surveys show 67% of providers believe AI could improve the claims process; only 14% currently use it. (Managed Healthcare Executive)

Technology can be both a cause and a cure for denials. Governance, human oversight, and layered automation are key to realizing net gains.

Use Aptarro Software to Turn Denials into a Managed Risk

Denials are widespread and expensive in both direct lost revenue and operational costs. The evidence in 2023–2025 shows denials cut across payer types, are often preventable, and are increasingly influenced by automation and data errors. Providers that measure denials by payer, reason, and claim value, then prioritize fixes at intake, prior authorization, and coding, typically see the biggest improvements.

A combined approach works best: prevention through data hygiene and eligibility checks, automation with rules engines and pre-submission edits, and a well-structured appeals process. Aptarro software supports these efforts with revenue-cycle automation and denial management tools that reduce errors, streamline appeals, and raise clean-claim rates.

Request a demo to see how Aptarro can help your organization cut denials and boost reimbursements.