Understanding healthcare declare denials: Causes and options

Key takeaways:

• The primary motive for medical declare denials stays unchanged in 2025, with lacking or inaccurate declare knowledge nonetheless topping the record — however worsening since 2024.
• AI-powered instruments like Patient Access Curator™ and AI Advantage™ may also help healthcare suppliers enhance declare denial charges and optimize the claims administration course of.
• 67% of providers imagine AI can enhance the claims course of, however solely 14% report utilizing AI to assist cut back denials.

Experian Health’s State of Claims 2025 survey reveals {that a} worrying development in healthcare declare denials continues — and is worsening. Greater than 40% of providers report that a minimum of one in ten claims are denied, an 11% uptick since 2022.

Denials at this scale are pushed by quite a few elements — lots of which haven’t modified since 2024. This industry-wide, ongoing, and unchecked claims denial spiral represents billions of {dollars} in misplaced or delayed reimbursements, leaving income cycle leaders feeling mounting monetary strain to grasp what’s behind the rising charges and deal with them earlier than it’s too late.

This text explores the highest causes for declare denials, and the way automation and AI may also help organizations overcome operational roadblocks to cut back denial charges, streamline efficiencies and enhance money movement.

Prime causes for healthcare declare denials

Experian Well being surveyed 250 healthcare revenue cycle leaders to seek out out what’s behind the rising declare denial charges. Whereas the highest drivers for denials stay the identical in 2025 as 2024, the chances have shifted barely, with some suppliers reporting that issues are getting worse, not higher.

The highest causes for healthcare declare denials embody lacking or inaccurate claims knowledge, authorizations, incomplete or incorrect affected person registration knowledge and code inaccuracy.

Lacking or inaccurate claims knowledge

In 2025, 50% of the State of Claims respondents report that lacking or inaccurate declare knowledge is the primary issue contributing to rising denial charges — up 4% from 2024. Clear claims submissions depend on getting the info proper the primary time. Nonetheless, 54% of respondents say that claims errors are on the rise. And practically 70% report that submitting clear claims is now more difficult than it was in 2024.

Inaccurate or incomplete affected person knowledge

Even the slightest mistake or mismatch in a affected person’s identify, deal with or insurance coverage particulars can lead to a denial, resulting in cost delays and additional work for the workers. In 2025, greater than 1 / 4 of respondents say that at least 10% of denials outcome from inaccurate or incomplete knowledge collected at affected person consumption. These errors typically happen throughout registration, when important affected person info is first collected and entered.

Prior authorizations

Prior authorization issues proceed to rank as a high operational problem that triggers declare denials. Though barely down from the earlier 12 months, 35% of survey respondents nonetheless establish authorizations as a major set off. Not solely is the prior authorization course of complicated, however it’s additionally pricey and time-consuming for a lot of organizations to navigate efficiently. In accordance with the 2024 AMA Prior Authorization Physician Survey, physicians and their workers spend 13 hours per week finishing prior authorizations – with practically 90% reporting burnout.

Implementing expertise to stop declare denials

Leveraging technology-driven solutions may also help organizations cut back declare denial charges, streamline operations and enhance money movement. Right here’s a more in-depth have a look at a number of methods suppliers can undertake to assist forestall declare denials and cut back pricey reworks.

Tighten up affected person entry processes

Gathering correct and full knowledge helps curb denials. Instruments like Experian Health’s Patient Access Curator (PAC) enable suppliers to make sure correct knowledge is used at each step of the affected person journey — with minimal handbook intervention. Powered by AI and machine studying, PAC consolidates eligibility checks, coordination of advantages, Medicare Beneficiary Identifier (MBI) verification, demographics, insurance coverage protection and monetary standing right into a single workflow.

With an built-in affected person entry answer in place, like Patient Access Curator, suppliers can rapidly acquire affected person info upfront and get rid of the necessity to rerun eligibility checks. The outcome? Employees have extra time for higher-value duties, handbook knowledge entry errors decline and declare submissions are cleaner.

Modernize claims administration

Legacy claims administration processes are sometimes tedious, disjointed and error-prone. Simply over 80% of providers say their group nonetheless depends on a number of options to gather info for claims submissions — lots of which nonetheless require human intervention.

Instruments comparable to Experian Health’s Claim Scrubber assist suppliers put together error-free claims for processing by reviewing every line of the declare earlier than it’s submitted. For denials, an answer like Denial Workflow Manager allows organizations to trace declare standing and appeals with a view to rapidly prioritize claims that require follow-up.

Suppliers trying to modernize your entire claims cycle have the choice to implement an answer that automates claims processing, like ClaimSource®, whereas present ClaimSource customers can leverage AI Advantage to optimize your entire claims administration course of and higher predict and stop denials.

Lean into automation and AI

Income cycle leaders perceive that AI has its advantages, with practically 70% of providers saying they imagine AI can enhance the claims course of. Nonetheless, only 14% of organizations currently use AI to cut back denials. This reveals that there could also be some hesitancy round adopting new technology-based options.

For suppliers searching for to cut back denial charges and stop future denials, leveraging expertise, like AI, might present a roadmap ahead. Of the 14% who stated their group is at the moment utilizing AI, 69% report that it has reduced claim denial rates and/or elevated the success of resubmissions.

Discover how Experian Well being is reshaping the way in which well being techniques handle Coordination of Advantages. Find out how automation and AI are eliminating handbook errors, lowering denials and unlocking thousands and thousands in recoverable income.

The way forward for claims administration

As healthcare organizations proceed to face slim working margins and more and more complicated payer necessities, the monetary strain of climbing declare denial charges is high of thoughts. Thankfully, AI-powered options and clever automation may also help suppliers deal with high claims administration challenges head-on. With AI-powered instruments in place, like Experian Well being’s Patient Access Curator and AI Advantage, healthcare organizations can reduce denial charges, whereas bolstering monetary stability and bettering affected person experiences.

Find out how Experian Well being’s AI-powered options, like Patient Access Curator and AI Advantage, can break the denial cycle in your group.