Claim Denial Rate
Percentage of insurance or payer claims denied on first submission
What is Claim Denial Rate?
Claim denial rate is the percentage of healthcare claims submitted to payers that are denied. It shows how well a provider's billing and documentation meet payer requirements.
Denied claims delay or reduce payment and cost time to rework, so lowering the rate improves cash flow.
How this KPI is measured
- Function
- Finance
- Sub-function
- Revenue Cycle
- Industry
- Healthcare
- Type
- Lagging
- Impact
- Financial control
- Unit
- %
- Measurement frequency
- Monthly
- Formula
- (Denied claims / Total claims submitted) × 100
How to calculate it
Divide denied claims by total claims submitted, and multiply by 100.
For example, if 600 of 10,000 claims were denied, the rate is 6%.
Track denial reasons, such as missing information, coding errors or eligibility, and how many are later overturned on appeal.
Where it is used
Improving revenue cycle
Get paid faster.
Finding billing errors
Fix recurring causes.
Managing payer relationships
Discuss trends with payers.
How to improve it
Tips and common mistakes
- Fix root causes rather than only reworking claims.
- Follow coding and privacy rules.
- Track first-pass acceptance.
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