Denial Rate Benchmark

Two calculations and one comparison, all of them visible.

What it calculates

Your initial denial rate is denied claims divided by claims submitted. The denominator matters more than anything else here: using accepted claims, or charges rather than claims, produces a lower number that is not comparable to any published figure.

Monthly value at risk is denied claims multiplied by average claim value, where average claim value means expected reimbursement rather than billed charges. The recovery input splits that into what you get back through rework and what is written off. The written off figure is the one worth taking into a vendor conversation, because it is the part nobody is currently capturing.

Where the 10 to 12 percent band comes from

The band on this page is anchored to the Change Healthcare 2020 Revenue Cycle Denials Index, which reported that claims denied on initial submission had reached 11.1 percent through the third quarter of 2020, up from about 9 percent in 2016, on an analysis of 102 million hospital transactions. The Healthcare Financial Management Association summarised the index in its news coverage of the national denials index. That figure is where most of the widely repeated benchmarks in this category originate, and it is now several years old, which is the first thing to know about it.

More recent published figures run higher, and they measure different things.

• Premier Inc., 2024. A survey of 516 hospitals across 36 states, fielded from 10 October to 31 December 2023 on 2022 claims, found that nearly 15 percent of claims submitted to private payers were initially denied. The same survey reported initial denial rates of 15.7 percent for Medicare Advantage and 8.4 percent for traditional Medicare, which is a reminder that payer mix moves this number more than performance does.
• KFF, published March 2026. Analysing what issuers themselves report, KFF found that HealthCare.gov insurers denied 19 percent of in network claims in 2024, similar to 2023, with rates across issuers ranging from 3 percent to 36 percent.

These do not contradict each other. They differ by who is counting, what population is counted and in which year: a clearinghouse view of hospital transactions, a hospital survey of private payer claims, and issuer regulatory reporting on individual marketplace plans are three different measurements. The range between 11 and 19 percent across them is the honest state of the published evidence, and the 3 to 36 percent spread inside the KFF data is a stronger argument than any of the headline numbers: a single national figure is orientation, not a target.

Treat the band on the scale as a reference line, and treat your own trend over time, measured the same way each period, as the more useful number.

A rate below the band is not automatically good news. The most common cause of a surprisingly low rate is a denominator that excludes claims which never made it to submission.

Where the defaults come from

The default denied claim count is set so the calculator opens at 11.1 percent, matching the anchor figure above rather than a number we liked the look of. The claim volume, average claim value and recovery share are placeholders chosen to make the tool usable on first load. Replace all three with your own figures before taking any output anywhere.

What it does not do

It does not break denials down by reason code, payer or department, which is where the actionable detail always is. A single organization wide rate is the summary figure, and the work of fixing it starts one level below. See the denial management use case for how that breakdown is normally built.

It also excludes the staff cost of rework itself, which is modelled separately in the prior authorization cost calculator, and it says nothing about whether a denial was justified. If you want an independent read on whether automation is the right response to your numbers, that is what the AI readiness audit is for.