The national initial denial rate hit 11.81 percent in 2024, and 41 percent of providers now report a denial rate of 10 percent or higher. If your practice sits above roughly 12 percent, you are no longer in line with the average, you are in the group actively losing money to it. As many as 60 percent of denied claims are never worked a second time, so every point above the benchmark is revenue that does not come back on its own.
Most practices learn their denial rate the hard way, when a partner asks why collections feel soft or when a biller mentions offhand that a payer has been “difficult lately.” Few practices actually benchmark the number against anything. Without a comparison point, 8 percent feels fine and 14 percent feels like bad luck with one payer, when the data says otherwise on both counts.
This is a self check, not a sales pitch. What follows is sourced to Kodiak Solutions revenue cycle data, Experian Health’s State of Claims survey, Health Affairs, and the American Health Information Management Association, so you can place your own denial rate on the curve before deciding whether it is a problem worth fixing.
What counts as a normal denial rate in 2026
The initial denial rate across more than 2,100 hospitals and 300,000 physicians tracked by Kodiak Solutions reached 11.81 percent in 2024, up 2.4 percent from the year before. That is the third consecutive year the number has climbed, according to Experian Health’s most recent State of Claims survey of 250 billing and finance leaders. Medicare Advantage runs hotter still. A Health Affairs analysis found that Medicare Advantage plans deny 17 percent of initial claims, well above the commercial and traditional Medicare average.
None of this is evenly distributed. Experian’s survey found 41 percent of providers now see a denial rate of 10 percent or higher, meaning four in ten practices are already living above the number most benchmarks treat as the ceiling. If your practice runs a Medicare Advantage heavy panel, the 2026 baseline to measure against is closer to 15 to 17 percent than the flatter 11.81 percent industry average.
Where your practice actually sits
| Your initial denial rate | Where that puts you | What it usually means |
|---|---|---|
| Under 5 percent | Well below the 2024 national average of 11.81 percent | Clean intake and a payer rule library that is actually being used |
| 5 to 10 percent | Below average, inside the range most benchmarks call acceptable | Room to tighten, but not an emergency |
| 10 to 12 percent | At or just above the current national average | You are now part of the 41 percent Experian flags as elevated risk |
| Above 12 percent, or above 15 on a Medicare Advantage heavy panel | Above both the general benchmark and the Medicare Advantage specific one | Active revenue leakage, not a payer having a bad quarter |
Most practices have never actually pulled this number from their own claims data. If you have not, that is the first step, before any of the arithmetic below means anything for your practice specifically.
What a denial rate above the benchmark actually costs
Two separate costs stack on top of each other, and most practices only see the first one. The American Health Information Management Association puts the cost to rework a single denied claim at roughly 25 dollars in practice staff time, climbing to 181 dollars in a hospital setting. That cost applies whether or not the claim is ever successfully paid, it is the price of touching the claim a second time.
The second cost is bigger and mostly invisible until someone measures it. AHIMA’s research puts the share of denied claims that are never resubmitted at as many as 60 percent. Combine that with the 2024 national denial rate and the arithmetic is straightforward: 11.81 percent of claims denied, up to 60 percent of those never worked again, equals close to 7 percent of billed charges walking out the door permanently, before a single appeal letter goes out.
| Annual collections | Illustrative permanent loss at a 7 percent worst case write off rate |
|---|---|
| 500,000 dollars | About 35,000 dollars |
| 1,000,000 dollars | About 71,000 dollars |
| 2,000,000 dollars | About 142,000 dollars |
That table is the ceiling, not a guarantee, and a practice already resubmitting aggressively will land well under it. It exists to show the shape of the problem. A denial rate that looks like a minor annoyance on a monthly report is, at scale, a second revenue cycle running quietly in the background, one that nobody is managing.
Why most of this is preventable, not appealable
Experian’s survey asked billing leaders what actually drives their denials, and 26 percent said inaccurate or incomplete data collected at patient intake accounts for at least one in ten of their denials on its own. Prior authorization gaps and coding or documentation mismatches account for most of the rest. Almost none of it originates with the payer deciding to be difficult. It originates upstream, before the claim is ever submitted, in front desk data entry, in a missed authorization, or in a code that does not match the documentation behind it.
That distinction matters because it changes where the fix belongs. Appealing a denied claim after the fact recovers some of that specific dollar amount if the appeal succeeds. It does nothing about the next hundred claims built the same way. Catching the same error before submission is the only version of this that compounds.
Get your Revenue Defense Score. Six questions, sixty seconds, and a benchmarked read on where your denial rate actually sits against the numbers above, specific to your specialty rather than the blended national average.
How WeBill Health defends against denials before they happen
WeBill Health maintains internal payer rule libraries organized by specialty and by carrier, built and updated by people who work claims in your specialty every day. Every claim receives human pre submission review against those libraries before it goes out. There is no black box and no algorithm we ask you to take on faith. When a payer changes a policy, a person updates the library and a person applies it to your claims.
That review is what Denial Defense 2.0 is built around, root cause work aimed at the intake error or the authorization gap before it becomes a claim, not a faster way to appeal after the fact. A practice running the WeBill Health 98 percent clean claim standard is not appealing its way to that number. It never generates most of the denials in the first place.
Frequently asked questions
What is a good denial rate for a medical practice in 2026?
Under 5 percent is well below the 2024 national average of 11.81 percent tracked by Kodiak Solutions. Between 5 and 10 percent is generally considered acceptable. Above 10 percent puts a practice in the 41 percent of providers Experian’s survey flags as elevated risk.
Why is the national denial rate rising every year?
Experian Health’s State of Claims survey found 2024 was the third consecutive year of increasing denials, driven largely by intake data errors, prior authorization gaps, and payers tightening documentation requirements, not by any single new rule.
Why is my Medicare Advantage denial rate so much higher than my commercial rate?
A Health Affairs analysis found Medicare Advantage plans deny 17 percent of initial claims, several points above commercial or traditional Medicare. A practice with a Medicare Advantage heavy panel should benchmark against 15 to 17 percent, not the blended 11.81 percent national figure.
What happens to a denied claim that never gets resubmitted?
It becomes a permanent loss. The American Health Information Management Association estimates as many as 60 percent of denied claims are never worked a second time, which is why prevention matters more than appeal speed.
Does appealing more denials fix a high denial rate?
It recovers individual dollars but does not lower the rate itself. Most denials trace back to intake data, prior authorization, or coding errors that repeat on the next claim unless the root cause is fixed before submission, not after.
How do I find out my practice’s actual denial rate?
Pull initial denials as a percentage of total claims submitted over a trailing 90 days from your clearinghouse or practice management system, then compare it against the benchmarks above. A Revenue Defense Score gives a faster, specialty benchmarked version of the same check.
Get a specific number for your practice
The benchmarks above are national. Your denial rate, your specialty mix, and your payer mix are not.
Request your Revenue Health Audit. We pull your actual initial denial rate from your existing claims data, benchmark it against your specialty and payer mix, and show you exactly where it is coming from before we quote a fix.
Prefer to talk it through? Book a 30 minute call with a US based billing manager who works your specialty.
Sources
- Claims denial rates up, prior auth denials down in 2024: Report, Becker’s Payer Issues, citing Kodiak Solutions revenue cycle data
- Claim Denial Rates Increase for Third Consecutive Year, Survey Shows, Managed Healthcare Executive, citing Experian Health’s State of Claims survey
- Medicare Advantage Denies 17 Percent of Initial Claims, Health Affairs
- Claims Denials: A Step by Step Approach to Resolution, Journal of AHIMA
- Denial Defense 2.0, WeBill Health
