Does Your Denial Strategy Have a Reflex Problem?

By Noah Breslow, CEO, Revecore 

I recently had the pleasure of joining Kelly Wisness on The Hospital Finance Podcast to talk about the growing denials crisis. Partway through, I used a metaphor I keep coming back to. 

When a doctor taps your knee with a reflex hammer, you expect an immediate kick. If your leg only moved two months later, you'd assume something was seriously wrong. 

Many health systems respond to new trends in denials with that kind of delay. A new pattern can go unnoticed for weeks, with even more time passing before anyone traces it to the root cause. By then, more losses than necessary have already been written off, and the payer may have already moved on to deny a new set of claims. 

The Cost Keeps Climbing 

A recent McKinsey survey of healthcare leaders found that organizations write off an average of 2.63% of net patient service revenue to clinical denials alone. Add underpayments, appeal costs, and timely filing losses, and I'd estimate another one to two points of revenue exposure on top of the McKinsey figure. 

 Challenging those denials also comes at a significant cost. The American Hospital Association estimates hospitals spent nearly $18 billion in 2025 overturning denials and $43 billion overall trying to collect payments insurers already owed. 

Payers Built Their Reflexes First 

Payers have had a multi-year head start with AI and automation. A U.S. Senate investigation found that one major Medicare Advantage insurer's denial rate for post-acute care rose from 8.7% to 22.7% between 2019 and 2022, a period that coincided with its use of an algorithmic tool to manage claims. 

While payers have been deploying AI at scale for several years, providers are just starting to catch up. As many of our clients have put it, it can feel like an arms race. Most provider organizations are still better positioned to fight denials claim by claim than to do the systemic analysis to prevent denials before they occur in the first place. Fighting individual denials will recover revenue, but it does little to change the issues causing them in the first place. The result is a growing imbalance between how denials are generated and how providers are equipped to respond. 

 The Gap Between Priority and Process 

Hospital leaders know this is a problem. In the same McKinsey survey, 47% cited improving clinical denials as a top priority, yet only 36% had standardized processes to address them. That means roughly 64% of organizations lack the infrastructure to prevent denials systematically. 

McKinsey also found that organizations with dedicated denial prevention processes reported a 47% appeal success rate, compared with 37% for those relying on ad hoc resources. Those ten points of improvement were driven largely by how the work is organized. 

I see this in our own client base. Some of our most sophisticated clients track overturn rates down to the individual analyst, by payer and by procedure type. They route cases to the people who win them most often and treat the gaps as training priorities. One revenue cycle leader I know holds stand-ups devoted to denial trends every single day. That’s the level of diligence it takes to get ahead of denials instead of constantly reacting to them. 

Shortening the Reflex 

So where should leaders start? A few steps make the biggest difference: 

• Realistically assess your infrastructure and process. Take stock of your dedicated teams, workflow systems, and tracking mechanisms, and identify what's missing. 

• Make denials a frontline leadership topic. Give denial trends the same regular attention as other core performance metrics, with clear ownership for identifying patterns, addressing root causes, and following through on what needs to change. 

• Measure your detection-to-fix time. Track the days between spotting a trend and making the upstream change in intake, documentation, or coding. Then work to shrink that number. 

• Pair AI with clinical judgment. AI is excellent at pattern recognition across payers and service lines at scale. The subtler denials, like those tied to bundling or medical necessity, still need nurses, coders, and attorneys who understand why the denial happened and how to argue against it. 

That last point shapes how we approach denials at Revecore. Our AI helps prioritize denials and pull the strongest clinical evidence from medical records that can run hundreds, or even thousands, of pages. Licensed nurses, certified coders, and attorneys then apply their judgment and build the appeal. What we learn from each case feeds back upstream through root-cause analytics and education, which is how our clients see a 10 to 25% sustained reduction in repeat denials. 

Denials will always be a moving target. Payers have an economic interest in denying some share of claims, and the denials that cost you this year may look different next year. The health systems that come out ahead will be the ones that react fastest and keep fixing problems at the source.