What Is a Good Claim Denial Rate?
The short answer: under 5% on first submission is strong, the industry average sits closer to 10% to 12%, and some payers deny far more. The longer answer, with the numbers that actually help you read your own performance, is below.
Initial denial rate to aim for. A widely used best-practice threshold.
Typical first-submission denial rate reported across the industry.
Share of in-network marketplace claims denied on average (KFF, 2023 HealthCare.gov data).
Every figure is sourced in the notes below. Treat the ranges as reference points, not promises.
A denial rate is the share of claims a payer refuses to pay, by count or by dollars, out of everything you submitted. If you want the formula and the related metrics, the denial management primer lays them out. This page is about the targets: what good looks like, where the average sits, and how to tell whether your own number is a problem.
One caution before the tables. A single denial rate hides more than it shows. A 9% rate that is all one payer and one fixable cause is a better position than a 6% rate spread across every payer with no pattern. Read the number, then read underneath it.
Benchmarks by metric
| Metric | Target | Industry reality |
|---|---|---|
| Initial denial rate | Under 5% | Roughly 10% to 12% on average |
| Clean claim rate | 95% or higher | Often 75% to 90% |
| First-pass resolution | 90% or higher | Varies widely by payer mix |
| Denial overturn rate (appeals) | 60% or higher | Achievable, but most denials go unappealed |
| Cost to rework a denial | As low as possible | About $25 (practice) to $118 (hospital) |
Sources: HFMA best-practice thresholds, Experian Health State of Claims surveys, KFF analysis of HealthCare.gov claims data (2023), and published estimates of denial rework cost. Treat these as reference ranges, not guarantees; methodology differs between sources.
Why your specialty changes the math
National averages blend specialties that have little in common. Rather than chase a fabricated per-specialty percentage, look at what drives denials in your work:
Higher denial pressure
Surgery, advanced imaging, and procedures with heavy prior-authorization and bundling rules. More moving parts at the front end means more chances to trip a payer edit.
Lower denial pressure
Routine office visits and established-patient evaluation and management, where coding is more predictable and authorization is rarely required. Fewer edges to catch on.
The useful comparison is not you against a national number. It is you against your own trend, segmented by payer and by denial reason.
Benchmarks tell you the gap. Closing it is the work.
If your rate sits above 5%, the path down runs through the front end (prevention) and the back end (recovery). Both get easier when the cost to work a single claim drops near zero, which is the whole point of an autonomous agent.
How to read your own denial rate
- 1Measure it two ways, by claim count and by dollars. The dollar rate tells you what is actually at stake.
- 2Segment by payer. One payer usually drives a disproportionate share, and that is where to start.
- 3Segment by CARC code. The top three causes are typically the majority of the volume.
- 4Watch the trend, not the snapshot. A rising rate is the alarm; a single month is noise.
- 5Separate avoidable from unavoidable. The avoidable share is your real opportunity.
Once you can see the gap, the eight-play plan to reduce denials is how you close it.
Benchmark Questions
What is a good claim denial rate?+
A common rule of thumb is to keep the initial denial rate under 5%. Industry averages run higher, roughly 10% to 12% on first submission, so a practice consistently under 5% is performing well. The trend over time and the mix of causes matter as much as the single number.
What is the average denial rate in healthcare?+
Estimates vary by source and segment. Experian Health's surveys show provider-reported denial rates climbing, with many above 10%. A KFF analysis of HealthCare.gov plans found insurers denied about 19% of in-network claims on average in 2023, with wide variation between insurers. The figure depends heavily on payer mix and how denials are counted.
What is a good clean claim rate?+
Aim for 95% or higher. The clean claim rate is the share of claims accepted on first submission with no edits or rejections. A high clean claim rate is the front-end counterpart to a low denial rate.
Why do so few denied claims get appealed?+
KFF found that consumers appealed less than 1% of denied in-network marketplace claims. On the provider side, the reason is economic: reworking a denial costs roughly $25 in staff time at a practice (MGMA) and up to about $118 at a hospital (Change Healthcare), so smaller denials are written off rather than appealed. Lowering the cost per claim is what makes appealing all of them viable.
Do denial rates vary by specialty?+
Yes. Specialties with heavy prior-authorization requirements, complex bundling, or high-cost services, like surgery, advanced imaging, and some behavioral health, tend to see more denials. Primary care and routine visits generally see fewer. Compare yourself to your own payer mix and history, not just a national average.
Know Your Number. Then Beat It.
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