Why Denials Still Happen in High-Performing Teams

Hi and happy Tuesday,

Last fall, a mid-sized Ohio medical practice noticed something odd: a routine procedure had triggered dozens of denials in just under a month. When they traced the problem back, the culprit was small, just one missing modifier, worth $58.

But that small miss had spiraled. 

74 claims denied.

Over 60 hours spent reworking charts, resubmitting, and responding to payer requests.

No one had done anything wrong. The team was competent. The billing partner hadn’t raised a flag. The system was working, until it wasn’t.

It’s a story we’ve now heard in many forms, and it’s not a failure of effort; it’s a failure of fit.

A ‘stable’ RCM isn’t always a healthy RCM

National averages don’t tell the full story.

New data from HFMA and Guidehouse shows:

• 41% of healthcare leaders report denial rates over 3.1%
  

• Nearly half collect less than 93% of what they bill
  

• 90% cite workforce shortages as a persistent constraint
  

Most responses center on adding people or outsourcing tasks. However, the deeper issue isn’t staffing. It’s the growing mismatch between payer complexity and the tools teams are expected to manage it with.

The outcome? Avoidable friction. Lost time. And money quietly left on the table.

What high-performing teams are doing differently

According to a survey of 134 healthcare CFOs, automation and AI are now the top RCM investment priorities for 2025. 

Rather than overhauling entire systems, many practices are embedding tools that:

• Flag common errors in real time, 

• Surface payer-specific inconsistencies before submission, and 

• Work within existing tools, not around them 

Automation and AI don’t eliminate the need for staff; they make it easier for staff to concentrate on what actually requires human attention.

In essence, no overhaul and no long onboarding. A process enhancement where it mattered most, before claims are sent out.

What is the potential for change?

One multi-site dental group made a small but significant change: adding automated pre-submission checks to their workflow. No system change. No third-party vendor management. Just one extra lens before the claim went out. 

The takeaway is simple: small, upstream changes can have a compounding impact.

Why this matters

The bigger lesson here wasn’t the $58 error.

It was that even high-functioning teams can’t keep pace when the process relies on manually catching every nuance.

Clean claims aren’t just about billing accuracy. They reflect how well a system protects its staff from being overwhelmed by complexity.

When one small miss turns into dozens of denials, it’s worth asking:

Is your workflow designed to identify problems early, or is it merely intended to clean them up later?

Next week, I’ll reveal the 4 RCM truths a healthcare COO shared that most vendors won’t say out loud.

See you next Tuesday,
Dino Gane-Palmer