- Roughly 15–18% of Medicare Advantage and 13–15% of commercial claims are denied on first submission, lengthening payment timelines and pulling staff into appeals.
- Hospitals alone spend an estimated $19.7 billion a year appealing denied claims — making denials a structural revenue problem, not a one-off.
- Payers apply pressure through five recurring tactics: automated denials, administrative delay, contract ambiguity and underpayment, payment timing, and information asymmetry.
- The counter-move is structure and visibility — denial prevention, expected-vs-actual reconciliation, and a single view of claims, denials, payments and contracts.
- Premier Vision Group cut insurance A/R by ~50% and lifted average monthly collections 17% within a year of partnering with Knack RCM.
You can’t control payers — but you can control how you respond. You can’t outpace payers — but you can outsmart them.
Here’s how leading practices are turning payer challenges into revenue cycle opportunities.
The environment providers are working in
Claim denials are built into how payers manage cost and risk. Recent analyses show that roughly 15–18% of Medicare Advantage claims and 13–15% of commercial claims are denied on first submission. For providers, that means longer payment timelines and more staff time diverted to follow-up and appeals.
The financial impact goes far beyond a payment delay. Hospitals alone spend an estimated $19.7 billion a year on appeals of denied claims. For physician groups and hospital-owned practices, this means unpredictable revenue even when patient volume remains stable.
This is a payer environment driven by automated reviews, frequent rule changes, and limited transparency. Many healthcare teams lack the staff or technology to keep pace with these systems — and payers know it.
How payers apply pressure — and how providers respond
1. Automated denials
What’s happening: Payers rely on automated reviews and evolving medical policies to flag claims that don’t match expected patterns. Denials occur even when services were appropriate, because the documentation or timing doesn’t match a payer’s internal logic.
The challenge: Denials come back faster than teams have the capacity to work them.
How providers respond: Focus on denial prevention. Identify required documentation and submission timeframes, and implement them at the start of the workflow.
2. Administrative delay through authorization and review
What’s happening: Authorization requirements are complex by design, and missing a single step puts you right back at square one. Even approved services face additional scrutiny during billing, so using the correct code every time matters.
The challenge: Teams spend time retracing approvals and resubmitting documentation while coders work without clear guidance on which clinical details will support payment.
How providers respond: Tie eligibility, authorization, and documentation together so claims enter the system with the information needed to support both approval and payment.
3. Contract ambiguity and deliberate underpayment
What’s happening: Payers apply complex contract language and fee-schedule changes — including “lesser of” logic — that reduce reimbursement without triggering a formal denial.
The challenge: Teams focus on denials while underpayments go unnoticed and accumulate.
How providers respond: Regularly compare expected reimbursement to actual payment to support payer reconciliation.
4. Payment timing as leverage
What’s happening: Routine, intentional payment delays occur even when claims are approved.
The challenge: Delayed payments make cash flow less predictable, even when claims are ultimately paid.
How providers respond: Organize follow-up around payment timing. Visibility into when a claim should have moved lets staff distinguish routine processing from payer-driven delay.
5. Information asymmetry
What’s happening: Payers interpret claims using their own benchmarks and data models. Providers work from internal perspectives that don’t match.
The challenge: Teams aren’t speaking the same language as payers. Without understanding payer patterns, their behavior feels unpredictable and impossible to manage.
How providers respond: Bring claims, denials, payments, and contract details into a single view or dashboard. This makes payer trends visible and their criteria easier to interpret — and easier to manage.
Real-world proof: how one eye care provider cut A/R by 50% and grew revenue 17%
Premier Vision Group, an Ohio-based eye care network, faced rising accounts receivable and inconsistent reimbursement across multiple practices. PVG partnered with Knack RCM to bring structure and consistency to its revenue cycle. From the start, coding, follow-up, and analytics were integrated into a single, connected process. Payer activity became easier to track, and with contract performance visible across locations, recurring issues were addressed at their source.
Within one year, insurance A/R fell to 62% of average monthly revenue, and average monthly collections increased by 17%. Billing became more predictable, and the organization regained confidence in how its revenue cycle supported patient care.
With Knack as our partner, we not only obtained our goal to significantly lower insurance accounts receivable — we exceeded it.Mike Brujic, OD, FAAO, Partner, Premier Vision Group
Final takeaway
You can’t avoid all payer tactics or predict every rule change. What you do control is how prepared your revenue cycle is to handle them. Practices that bring structure to their workflows and maintain visibility across claims and payments spend less time reacting and more time correcting the issues that affect performance. Knack RCM helps practices build the structure that makes this possible.
Sources
- Kaiser Family Foundation. Medicare Advantage prior authorization and appeals. 2023.
- American Medical Association. 2023 AMA prior authorization physician survey. 2023.
- American Hospital Association. Payer denial tactics: how to confront a $20 billion problem. 2023.
- Becker’s Hospital Review. Health IT inefficiencies are costing hospitals billions. 2023.
- MGMA. Strategic improvements in revenue cycle management to reduce claim denials. 2023.
Frequently asked questions
How often do payers deny claims on first submission?
Roughly 15–18% of Medicare Advantage claims and 13–15% of commercial claims are denied on first submission, which lengthens payment timelines and pushes more staff time into follow-up and appeals.
What does the denials problem cost providers?
Hospitals alone spend an estimated $19.7 billion a year appealing denied claims — the industry often frames it as a roughly $20 billion problem — and the cost compounds for physician groups and hospital-owned practices through unpredictable revenue.
What are the five tactics payers use to pressure providers?
Automated denials, administrative delay through authorization and review, contract ambiguity and deliberate underpayment, payment timing used as leverage, and information asymmetry.
How can providers reclaim revenue from payers?
Shift from reacting to denials toward prevention, tie eligibility, authorization and documentation together, reconcile expected against actual reimbursement, organize follow-up around payment timing, and consolidate claims, denials, payments and contracts into a single dashboard for payer-level visibility.
What results did Premier Vision Group achieve with Knack RCM?
Within one year, insurance A/R fell to 62% of average monthly revenue (about a 50% reduction) and average monthly collections rose 17%, with more predictable billing across the Ohio-based eye care network.