Key takeaways
- In Experian Health's 2026 State of Claims survey, 75% of providers said denials are increasing and 40% said at least one in ten claims is denied.
- "Services not covered" is now the most-cited denial reason (53%), followed by frequently changing payer policies (31%), coding errors and prior authorization problems (25% each).
- Most denials are preventable at the front end: eligibility and benefits, prior authorization and payer-specific coverage rules.
- Track denials by root cause using CARC/RARC codes, not just by payer, so you fix the process instead of re-working the same claims.
- Measure four numbers monthly: initial denial rate, clean claim rate, denial overturn rate and days in A/R.
Denials have been the biggest leak in most practices' revenue cycle for years, and 2026 has not been different. Experian Health's annual State of Claims survey, published on October 28, 2026, asked 204 billing and revenue cycle professionals about their claims. The picture is consistent with what we see in our own client work: payers are harder to get paid by, the rules change more often, and teams are stretched.
What the 2026 denial data shows
| Survey finding | 2026 result |
|---|---|
| Providers who say denials are increasing | 75% |
| Providers with a denial rate of 10% or more | 40% |
| Say reducing denials is a priority | 89% |
| Say payer reimbursement is more challenging | 79% |
| Say payer policy changes are more frequent | 78% |
| Say time to reimbursement is increasing | 64% |
| Say submitting clean claims is harder than a year ago | 65% |
The most telling number may be the 65% who say clean claims are harder to submit than a year ago. That is not a staffing problem alone. It reflects payer rules that change faster than most teams can track them.
The top denial reasons in 2026
Respondents were asked to pick their top three denial reasons. For the first time since the survey began in 2022, services not covered came out on top:
- Services not covered by the plan (53%). Often a benefits verification gap: the service is excluded, limited, or covered only with conditions the front desk never checked.
- Frequently changing payer policies (31%). Medical policy updates, new code edits and new documentation requirements that arrive in bulletins most practices never read.
- Coding inaccuracies (25%). Wrong code, missing or wrong modifier, diagnosis that does not support medical necessity, or outdated codes after an annual update.
- Difficulty obtaining prior authorization (25%). Missing, expired or mismatched authorizations, including an approved CPT that differs from what was actually performed.
Registration and intake errors have not gone away either. 43% of respondents said 5% to 15% or more of their denials come from inaccurate patient access data, an improvement from 52% the year before but still a large, fully preventable share.
A denial prevention playbook, from scheduling to payment
1. Verify eligibility and benefits for the service, not just the patient
A real-time eligibility check confirms the patient has active coverage. It does not confirm that the specific service is covered, how many visits remain, or whether a referral is needed. For high-dollar or frequently denied services, check service-level benefits and record what you found, who you spoke to and the reference number. Run checks again 48 to 72 hours before the visit for scheduled patients, because coverage changes more often than people expect. Our insurance eligibility verification team does exactly this for practices that do not have the staff time.
2. Build a prior authorization tracker
Keep one list of services that need authorization by payer, and update it whenever a payer bulletin changes it. For every authorization, track the approved CPT codes, units, date range and servicing location, then compare them with what was actually billed. A large share of authorization denials come from an approved code that does not match the performed code, or a visit that falls a few days outside the approved window.
3. Watch payer policy changes on a schedule
Assign someone to review medical policy and reimbursement bulletins from your top five payers every month. Write each relevant change into a short internal note: what changed, which codes it affects, the effective date and what staff need to do differently. This is the single best defense against the second most common denial reason.
4. Scrub claims against payer-specific rules
A generic claim scrubber catches format errors and NCCI edits. Your highest-value rules are the ones you write yourself from your own denial history: this payer wants modifier 59 instead of XU, that payer requires an NDC on this drug code, this plan needs the referring provider's NPI. Every time a new denial pattern appears, add a rule so it cannot happen again.
5. Keep coding current
Annual and quarterly code updates are a reliable source of January and October denials. The FY 2027 ICD-10-CM update, for example, turned several commonly used codes into non-billable headers. See our breakdown of FY 2027 ICD-10-CM changes. Periodic coding audits of a sample of each provider's claims catch habits before they become patterns. Our medical coding team runs these audits for clients.
Work denials by root cause, not by payer
Most practices sort their denial work queue by payer or by dollar amount. That is fine for getting money in this week, but it hides the reasons claims keep failing. Use the Claim Adjustment Reason Codes (CARCs) and Remittance Advice Remark Codes (RARCs) on each remittance to group denials into a small number of root-cause categories:
| Root-cause category | Typical owner | Fix |
|---|---|---|
| Eligibility and registration | Front desk / patient access | Insurance capture checklist; re-verify before visit |
| Authorization and referral | Prior auth coordinator | Authorization tracker; match approved vs. billed codes |
| Coverage and medical necessity | Billing and providers | Service-level benefit checks; diagnosis-to-procedure review |
| Coding and modifiers | Coders | Targeted audits and education; scrubber rules |
| Timely filing and duplicates | Billing team | Submission monitoring; clearinghouse rejection follow-up |
Review the category totals monthly with the people who own each process. When a category grows, you know which team needs help, and which fix to make, without waiting for the A/R to age.
Appeal the denials that are worth it, quickly
- Know every payer's deadline. Appeal windows vary by payer and plan type. Missing one turns a recoverable claim into a write-off.
- Correct and resubmit when the error was yours. A corrected claim is faster than an appeal for coding or demographic errors.
- Appeal with evidence when the payer is wrong. Include the relevant records, the payer's own policy language and a short, specific letter.
- Track overturn rates by payer and reason. If a payer reverses most of its medical necessity denials on appeal, raise the pattern with your provider representative.
Consistent, documented follow-up is where outsourced A/R follow-up and denial management teams pay for themselves: they work the claims that in-house teams never have time to reach.
The four numbers to track every month
- Initial denial rate: denied claims divided by claims submitted. Watch the trend and the breakdown by category.
- Clean claim rate: claims accepted and paid on first submission without edits or rework. Many practices aim for 95% or higher.
- Denial overturn rate: the share of appealed denials that are paid. A low rate can mean weak appeals or appealing the wrong claims.
- Days in A/R: how long, on average, it takes to collect. Rising days in A/R is often the first visible sign of a denial problem.
Where automation and AI fit
Interest in AI for claims is high but actual use is still limited. In the same survey, only 9% of respondents said their organization currently uses AI in claims (down from 14% in 2025), while 64% plan to invest. In our experience, the most reliable automation today is rules-based: eligibility checks before every visit, payer-specific claim edits, automated claim-status checks and denial categorization from remittance codes. Get those working first. They are cheaper, easier to audit, and they create the clean data any future AI tool will need.
If your denial rate has crept up and you are not sure where to start, a free billing audit from our team will show your denials by root cause and the three fixes with the biggest payoff.
Sources
- Experian Health: Healthcare claim denial statistics, State of Claims Report 2026
- Experian Health press release: Annual State of Claims survey finds denials remain elevated (Oct. 28, 2026)
This article is general information for healthcare practices, not legal or coding advice for a specific claim. Payer policies change often; confirm details with your MAC, payer contracts and the current CPT and ICD-10-CM code books.
RCM Expert Consultants Editorial Team
Written and reviewed by our certified coders, billing specialists and credentialing staff, who work US claims every day for practices across dozens of specialties.
