What Is the Average Medical Billing Denial Rate in 2026?
The most-cited industry first-pass denial rate range across U.S. physician practices is 9 to 12 percent, sourced from MGMA DataDive practice-management surveys and HFMA Revenue Cycle Improvement guidance. HFMA's top-quartile physician-practice target is below 5 percent, and the HFMA clean-claim target is 95 to 98 percent on first submission. Specialty, payer mix, and operational discipline drive the variance — surgical specialties run higher on bundling denials (CARC 97), behavioral health on medical-necessity denials (CARC 50).
- Industry first-pass denial range: 9-12% (MGMA / HFMA published)
- HFMA top-quartile target: under 5%; clean-claim target: 95-98%
- HFMA: 65% of denied claims are never appealed industry-wide
- AMA 2024 Prior Auth Survey: 34% reported a serious adverse event tied to auth delays
Medical Billing Denial Benchmarks 2026
By MedPrecision Operations Team · Published
The industry-cited first-pass denial rate range across U.S. physician practices is 9 to 12 percent, drawn from MGMA DataDive practice-management surveys and HFMA Revenue Cycle Improvement guidance. That range is the most widely referenced denial benchmark in U.S. revenue-cycle reporting, and it sits as the headline figure on every published practice-management discussion of denial performance. HFMA additionally publishes best-practice targets — top-quartile physician practices maintain denial rates below 5 percent, and HFMA's clean-claim target is 95 to 98 percent on first submission. The remaining benchmarks the industry references most often — specialty-specific denial drivers, top CARC codes, prior-authorization adverse-event rates, and the appeal-versus-write-off split — sit scattered across MGMA, HFMA, AAPC, AHIMA, the AMA Prior Authorization Survey, the OIG Work Plan, KFF Medicare Advantage analyses, and CMS public data. This page aggregates those benchmarks into a single citable reference, organized by industry baseline, specialty, CARC code, payer behavior, prior authorization, and best-practice target. Every figure cites the source.
Industry Baseline: First-Pass Denial Rates Across U.S. Practices
First-pass denial rates of 9 to 12 percent are the most commonly cited industry figure for U.S. physician practices, drawn from MGMA DataDive annual practice-management surveys and HFMA Revenue Cycle Improvement published guidance. That range has remained the published baseline across the past several years of MGMA and HFMA reference material, and it is the figure most billing-services pages, EHR vendors, and practice-management consultants quote when describing typical denial performance. HFMA additionally publishes two best-practice benchmarks that sit at the operational target line for high-performing practices: - **Top-quartile denial rate**: below 5 percent on first submission. Practices in the top quartile of HFMA-benchmarked physician groups operate under this threshold consistently. - **Clean-claim target**: 95 to 98 percent first-pass acceptance. The HFMA clean-claim definition is a claim that adjudicates to a paid or appropriately adjusted state on first submission without rejection or denial. MGMA's published data on net collection rate aligns with the same operational tier: median net collection rate in MGMA-benchmarked physician practices runs near 93 percent, and HFMA's top-quartile net collection target sits at 96 percent or above. Days in accounts receivable (A/R) provides the third operational benchmark most frequently cited alongside denial rate. MGMA-benchmarked physician practices typically run a median around 40 days in A/R; HFMA's best-practice target is under 35 days. Higher denial rates correlate directly with higher A/R days because denied claims age in the worklist before resolution. The 9-to-12 percent first-pass denial range is the figure that holds up across MGMA and HFMA reference material, but specialty mix, payer mix, and operational discipline shift the actual rate substantially in either direction. Surgical specialties with heavy NCCI bundling exposure (orthopedics, dermatology, cardiology) tend to sit at the higher end of the range or above when modifier discipline is weak. Practices with high commercial payer concentration and effective pre-submission scrubbing tend to sit at the lower end. The next sections break down where the variance actually lives.
Specialty-Specific Denial Patterns
Specialty mix is one of the largest single drivers of denial-rate variance because each specialty has its own dominant denial pattern — different CARC codes, different payer behaviors, different documentation requirements. The patterns below are aggregated from MedPrecision specialty-page payerGotchas across ten high-volume specialties, with each entry naming the most-common denial driver, the payer that most often produces it, and the operational fix. | Specialty | Most-common denial driver | Payer pattern | Operational fix | |---|---|---|---| | **Cardiology** | NCCI bundling on diagnostic-to-PCI conversion (93458 + 92928 without modifier 59 or XU) | Medicare and commercial | Modifier XU on diagnostic component with operative-note documentation that cath was clinically necessary, not a roadmap for planned PCI | | **Orthopedic** | 90-day global-period E/M denials when modifier 24 is missing | Medicare audit pattern | Track global periods at every encounter; modifier 24 (unrelated E/M) or 58 (staged) where supported by documentation | | **Mental health** | 90837 audit threshold above ~30% of session mix | Aetna, Cigna | Explicit start/stop times in the note (not narrative duration); session-mix monitoring against payer thresholds | | **Physical therapy** | 97140 + 97530 same-DOS NCCI bundling without modifier 59 or XS | Medicare and commercial | Modifier 59 or XS on 97140 with documentation that manual therapy targeted a separate body region from therapeutic activities | | **Dermatology** | Modifier 25 audit pressure on same-day E/M plus procedure | UnitedHealthcare (Optum), Cigna | Documentation discipline: separate chief complaint, history, and MDM unrelated to the procedure | | **Urgent care** | POS 11 versus POS 20 fee-schedule mismatch (urgent care facility versus office) | Aetna, UnitedHealthcare, Cigna, BCBS | POS 20 mapping per contract; Medicare exception routes through POS 11 regardless | | **Family practice** | 99214 undercoding from MDM-versus-time ambiguity; missed G2211 add-on | Medicare and commercial | Document both MDM and time pathways; attach G2211 on every eligible longitudinal-care visit | | **Pediatrics** | Vaccine administration coded as 90471/90472 instead of 90460/90461 component-based | UnitedHealthcare, Medicaid MCOs | Document counseling for under-19 patients to support 90460 + 90461 component billing | | **Internal medicine** | 99214-to-99213 downshifting; missed G2211 add-on | Medicare and commercial | Document MDM elements explicitly; attach G2211 on every longitudinal-care visit | | **ABA therapy** | 97155 protocol modification billed concurrently with RBT 97153 direct treatment | Aetna, Optum Behavioral, BCBS | Time-stamped concurrent-session policy with discrete start/stop per rendering provider | The pattern across specialties is that no single CARC drives every denial type — instead, the specialty's procedure mix determines which CARC family dominates. Surgical and procedural specialties (cardiology, orthopedic, dermatology, urgent care) cluster on bundling (CARC 97) and modifier issues (CARC 4). Time-based and visit-based specialties (mental health, family practice, internal medicine, pediatrics) cluster on coding-pattern audits, modifier 25 issues, and undercoding. Therapy specialties (physical therapy, ABA) cluster on time-discipline rules and concurrent-billing edits. Source attribution: each row above corresponds to documented payer behavior or AAPC/MGMA-cited audit pattern referenced on the MedPrecision specialty pages for cardiology, orthopedic, mental-health, physical-therapy, dermatology, urgent-care, family-practice, pediatrics, internal-medicine, and ABA-therapy billing services.
Top CARC Denial Codes by Frequency
Approximately 20 CARC codes account for around 80 percent of denial volume in U.S. physician practices, a frequency pattern referenced consistently across MGMA, HFMA, and AAPC published guidance. Public, payer-level frequency percentages for each CARC are not generally released — payers do not publish CARC-level adjudication frequencies — so the table below identifies the codes that industry sources most consistently flag as high-frequency, with the official X12 short description and the operational category they sit in. | CARC | X12 official meaning | Category | Group code typically paired | |---|---|---|---| | **1** | Deductible amount | Patient responsibility | PR | | **2** | Coinsurance amount | Patient responsibility | PR | | **3** | Co-payment amount | Patient responsibility | PR | | **16** | Claim/service lacks information or has submission/billing error(s) | Submission/data | CO | | **18** | Exact duplicate claim/service | Submission/duplicate | CO | | **22** | This care may be covered by another payer per coordination of benefits | COB | CO or OA | | **27** | Expenses incurred after coverage terminated | Eligibility | CO | | **29** | The time limit for filing has expired | Timely filing | CO | | **45** | Charge exceeds fee schedule/maximum allowable or contracted rate | Contractual | CO | | **50** | Non-covered services because this is not deemed a 'medical necessity' by the payer | Medical necessity | CO | | **96** | Non-covered charge(s) | Coverage | CO | | **97** | Payment is included in the allowance for another service/procedure (bundled) | Bundling/NCCI | CO | | **109** | Claim/service not covered by this payer | Payer routing | CO | | **197** | Precertification / authorization / notification absent | Prior authorization | CO | | **204** | This service/equipment/drug is not covered under the patient's current benefit plan | Coverage | CO | | **236** | Procedure or procedure/modifier combination is not compatible per NCCI | NCCI explicit | CO | These codes are sourced from the X12 official Claim Adjustment Reason Code list maintained at x12.org. The X12 list contains hundreds of additional codes, but the codes above are the ones MGMA, HFMA, AAPC, and AHIMA published guidance most consistently identifies as the recurring physician-practice denial set. The operational implication: most denial-management programs categorize incoming denials into the categories on the right column above (eligibility, prior auth, medical necessity, bundling, modifier, timely filing, COB) at ERA ingestion, and route each category to the team that owns the prevention workflow. Operational categorization in this format is the standard pattern referenced on MedPrecision's CARC and RARC reference and on the denial-management-services FAQs. Frequency caveat: where industry sources reference percentage figures for individual CARC codes (for example, 'CARC 197 accounts for X percent of denials'), those percentages are typically practice-specific or specialty-specific operational data rather than a national, publicly released benchmark. The 20-codes-account-for-80-percent figure is the most-cited national-level distribution claim, and it is referenced consistently across MGMA, HFMA, and AAPC published material.
Payer-Specific Denial Behaviors
Payer behavior on specific denial categories is one of the most operationally consequential variances in U.S. medical billing because the same CARC can mean different things at different payers, and the appeal pathway differs accordingly. The patterns below are aggregated from documented payer behavior on MedPrecision specialty pages and reflect what the team encounters in operational practice. **UnitedHealthcare (UHC) and Optum.** - Modifier 25 audit pressure on same-day E/M plus procedure visits, particularly in dermatology where Optum runs automated edits flagging practices that attach modifier 25 on more than roughly 60 percent of procedure visits (source: dermatology specialty page payerGotchas). - Mohs surgery review on cases above four stages per tumor, requiring documentation review (source: dermatology specialty page). - Functional outcome measures required at intervals for continued physical therapy authorization, with continued-treatment denials when outcome data is missing (source: physical-therapy specialty page payerGotchas). - Bilateral procedure discount applied more aggressively than Medicare in some orthopedic cases (source: orthopedic specialty page payerGotchas). - Component-based vaccine billing (90460/90461) required for under-19 patients, with denials when the wrong series is used for the patient's age (source: pediatrics specialty page). **Aetna.** - 90837 audit threshold above roughly 30 percent of session mix for behavioral health, triggering records requests and recoupment risk (source: mental-health specialty page). - Stress test supervision-and-interpretation bundle when both billed under the same NPI on the same date, denying the supervision component (source: cardiology specialty page payerGotchas). - Add-on psychotherapy codes (+90833, +90836, +90838) not reimbursed for non-MD providers (LCSW, LPC, LMFT), limiting add-on billing to psychiatrists and psychologists (source: mental-health specialty page). - Fracture-care code bundling with same-day E/M, denying the fracture-management code when billed on the same day as the office visit (source: orthopedic specialty page). **Cigna.** - 99214 low-complexity audit (LCA) targeting practices billing 99214 on more than 35 percent of established-patient visits, with retrospective chart review (source: urgent-care specialty page). - Echocardiography downcoding from 93306 (complete) to 93308 (limited) when documentation does not explicitly list all required complete-echo elements (source: cardiology specialty page). - Family therapy 90847 limited to 20 sessions per year on many plans, with couples therapy not counted as a distinct benefit (source: mental-health specialty page). - Therapeutic exercise 97110 plus manual therapy 97140 capped at 4 combined units per session on many plans (source: physical-therapy specialty page). - Biopsy claims with more than six biopsies per visit held automatically pending records request (source: dermatology specialty page). **BCBS plans.** - Joint-replacement prior-authorization denials when conservative-treatment documentation (six months of physical therapy, injections, NSAIDs) is not included in the auth request (source: orthopedic specialty page). - Phototherapy diagnosis-pairing required: ICD-10 codes in the L40.x (psoriasis), L20.x (atopic dermatitis), or L80 (vitiligo) ranges with documentation of failed topical therapy (source: dermatology specialty page). - Group therapy 97150 not reimbursed in many states; bundled with individual treatment codes when billed on the same day (source: physical-therapy specialty page). **Medicare Fee-for-Service.** - 90-day global surgical period bundles all related follow-up care into the surgical fee; modifier 24 (unrelated E/M) or 58 (staged) required on every separately billable post-op encounter (source: orthopedic specialty page). - NCCI Procedure-to-Procedure edits applied automatically on cath lab procedures, denying separately billable diagnostic components without modifier 59 or X-modifiers (source: cardiology specialty page). - Telehealth POS 10 (patient at home) versus POS 02 (other location) drives reimbursement-rate differentials post-public-health-emergency, with behavioral health retaining non-facility rate at POS 10 through CY 2025 (source: mental-health specialty page; CMS public guidance). **Medicare Advantage.** - Denial rates published by KFF analysis of CMS data range from 5 percent to over 18 percent depending on the insurer, with significant variance across MA organizations (source: KFF Medicare Advantage analysis of CMS public data, referenced on the denial-management-services page). The implication: payer-specific appeal templates and payer-specific denial-prevention rules outperform generic denial-management approaches. The same CARC at two different payers may require completely different appeal documentation.
Prior Authorization Denial Trends
Prior authorization is the single denial category where AMA-published survey data provides the most rigorously sourced industry benchmark. The AMA's 2024 Prior Authorization Physician Survey, conducted annually since 2010, surveys roughly 1,000 practicing U.S. physicians on the operational and clinical impact of payer prior-authorization requirements. **Key AMA 2024 Prior Authorization Survey findings (referenced on MedPrecision cardiology, mental-health, and denial-management-services pages):** - 34 percent of physicians reported that prior authorization had led to a serious adverse event for a patient in their care. This figure is the most widely cited prior-authorization benchmark in U.S. health-policy and revenue-cycle reporting. It anchors the payer-side regulatory pressure (CMS Interoperability and Prior Authorization Final Rule, state legislation expanding electronic prior-auth requirements) and the provider-side operational urgency (peer-to-peer review staffing, specialty-pharmacy routing, retrospective-auth processes). **KFF analysis of Medicare Advantage prior authorization (published 2024).** KFF analyses of CMS public data on Medicare Advantage have documented that MA plans deny prior-authorization requests at variable rates across insurers, with denial rates ranging from approximately 5 percent to over 18 percent depending on the MA organization. CMS has proposed transparency rules requiring disclosure of denial and overturn rates as part of the Interoperability and Prior Authorization Final Rule framework. These figures are referenced on the denial-management-services page. **CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F, finalized 2024).** The rule requires impacted payers (Medicare Advantage, Medicaid, CHIP, ACA exchanges) to implement electronic prior-authorization processes via FHIR-based APIs, send decisions within 7 calendar days for standard requests and 72 hours for expedited requests, and publicly report aggregate metrics on prior-authorization performance starting in 2026. The compliance dates phase in across 2026 and 2027. This rule is the primary federal policy driver behind the prior-auth operational changes practices are seeing in 2026. **Operational implication.** The denial category where payer transparency and federal policy pressure are most active is prior authorization. CARC 197 (precertification / authorization absent) is the corresponding adjudication code, and authorization denials carry a compounding operational cost: AMA survey data places the average physician-practice prior-authorization workload at multiple hours per physician per week, and CMS regulatory pressure is now driving electronic-prior-auth adoption that may reduce that load over the 2026-2028 period.
What Best-Practice Denial Rates Look Like
Best-practice denial-rate targets are published most explicitly by HFMA. The two figures cited most consistently across HFMA Revenue Cycle Improvement guidance and MGMA practice-management benchmarking: - **HFMA top-quartile physician-practice first-pass denial rate**: below 5 percent. - **HFMA clean-claim target**: 95 to 98 percent first-pass acceptance. MGMA published practice-management benchmarks align with the same tier: top-decile MGMA-benchmarked practices operate at substantially lower denial rates than the median (the 9-to-12 percent industry range), and the operational disciplines that distinguish top-decile practices are well-documented across MGMA reference material. **Operational disciplines that drive top-quartile denial performance** (referenced across MedPrecision denial-management-services and CARC reference pages): 1. **Pre-submission claim scrubbing with current edit tables.** Quarterly NCCI Procedure-to-Procedure edit refresh, MUE limit refresh, and payer-specific edit-rule updates. Stale edit tables generate either false-positive scrubs or missed denials. 2. **Real-time eligibility verification before service.** 270/271 transactions confirming coverage, copay, deductible accumulation, and behavioral-health carve-out routing where applicable. Eligibility-related denials (CARC 27, 31) are the most preventable category. 3. **Pre-authorization tracking integrated with scheduling.** No service performed without confirmed authorization where payer policy requires it. CARC 197 is one of the most operationally preventable denial categories with disciplined workflow. 4. **CARC-categorized denial worklist with payer-specific routing.** Denials categorized by CARC code at ERA ingestion (eligibility, prior auth, medical necessity, bundling, modifier, timely filing) and routed to the team that owns the prevention workflow. 5. **Same-week feedback loop from denials to front-end teams.** Eligibility denials route back to front desk; authorization denials route to the auth team; bundling denials route to coding for documentation training. Without the prevention loop, the denial worklist runs forever without shrinking. 6. **Modifier discipline at the point of care, not at appeal time.** Documentation that supports modifier 59, X-modifiers, modifier 25, and modifier 24 is created at the encounter, not retrofitted at appeal time. This is the discipline that determines whether bundling denials (CARC 97) are appealable. 7. **Timely-filing aging report run daily.** Same-day charge entry SLA prevents CARC 29 denials. Most commercial payers allow 90 to 365 days for filing; missing the window forfeits the right to bill. The industry context: HFMA published guidance places the cost of an in-house claim denial appeal at roughly $25 to $118 per claim depending on complexity, with the higher figure cited in Advisory Board research referenced on the denial-management-services page. That cost makes prevention 5 to 10 times more cost-effective than appeal — a calculation that underpins every top-quartile denial-management program. The other industry baseline relevant here: HFMA published data indicates that approximately 65 percent of denied claims are never appealed industry-wide, despite typical first-level appeal overturn rates of 50 to 70 percent on appealable categories. Practices without disciplined denial-management workflow forfeit recoverable revenue at scale because the appeal infrastructure does not exist.
Methodology and Sources
Every figure on this page is sourced to a public industry publication, a federal data source, or a documented payer-policy or operational pattern referenced on a MedPrecision specialty or service page. The sources used are listed below with the type of figure each contributes. **MGMA (Medical Group Management Association).** DataDive practice-management surveys. Cited for: industry first-pass denial rate range of 9 to 12 percent; median net collection rate near 93 percent; median days in A/R near 40; specialty-specific operational benchmarks. URL: mgma.com. **HFMA (Healthcare Financial Management Association).** Revenue Cycle Improvement guidance and published benchmarks. Cited for: 9-to-12 percent first-pass denial range; top-quartile denial target below 5 percent; clean-claim target of 95 to 98 percent; net collection top-quartile target of 96 percent or above; days-in-A/R best-practice target under 35; the published estimate that 65 percent of denied claims are never appealed industry-wide; cost-per-appeal range. URL: hfma.org. **AAPC (American Academy of Professional Coders).** AAPC published coding benchmarks and audit-pattern references. Cited for: specialty-specific audit findings (echo downcoding, modifier 25 audit pressure, fracture-care audit patterns); coder-credential references (CPC, CPB). URL: aapc.com. **AHIMA (American Health Information Management Association).** AHIMA published guidance on coding accuracy and HIM operations. Cited for: coder-credential references (CCS, RHIT); coding-accuracy benchmarks. URL: ahima.org. **X12.** Maintained by the Claim Adjustment Status Code Maintenance Committee under X12. Cited for: official CARC list; CARC short descriptions; quarterly update cycle. URL: x12.org. **Washington Publishing Company.** Maintained on behalf of CMS. Cited for: official RARC list; quarterly RARC updates. URL: washingtonpublishing.com/Codes/RemittanceAdviceRemarkCodes. **CMS (Centers for Medicare & Medicaid Services).** CMS public data, NCCI edit tables, Internet-Only Manual (IOM), and the Interoperability and Prior Authorization Final Rule (CMS-0057-F, finalized 2024). Cited for: NCCI Procedure-to-Procedure edit table; Modifier Indicator (0, 1, 9) framework; 90-day global surgical period rules under 42 CFR 414.40; telehealth POS rules; Medicare Advantage transparency framework. URL: cms.gov. **OIG (Office of Inspector General).** OIG Work Plan focus areas. Cited for: ongoing focus on modifier 59 misuse, evaluation-and-management upcoding, and Medicare Advantage payment integrity. URL: oig.hhs.gov. **AMA (American Medical Association).** AMA Prior Authorization Physician Survey, conducted annually since 2010. The 2024 survey is the source for the figure that 34 percent of physicians reported a serious adverse event tied to prior-authorization delays. URL: ama-assn.org. **KFF (Kaiser Family Foundation).** KFF analyses of CMS public data on Medicare Advantage. Cited for: MA prior-authorization denial rate range (5 percent to over 18 percent depending on insurer); MA transparency policy context. URL: kff.org. **Advisory Board.** Cited for: cost-per-appeal benchmark of approximately $118 per denied claim, referenced on the denial-management-services page. **MedPrecision specialty pages.** Aggregated payer-specific behavior and specialty-specific denial patterns for cardiology-billing-services, mental-health-billing-services, orthopedic-billing-services, physical-therapy-billing-services, dermatology-billing-services, urgent-care-billing-services, family-practice-billing-services, pediatrics-billing-services, internal-medicine-billing-services, and aba-therapy-billing-services. Each payer-behavior pattern referenced on this page corresponds to a documented payerGotcha or FAQ entry on the source specialty page. **Citation discipline.** Any figure on this page that does not have a public-source attribution is omitted. Where industry sources reference a range (for example, '50 to 70 percent appeal overturn rate on appealable categories'), the range is preserved rather than narrowed. Where payer-level frequency data is not publicly released (for example, exact percentage frequencies for individual CARC codes at the national level), the page describes the codes as 'most-cited' or 'industry-frequent' without inventing percentages. The page is intended as a citation-ready reference; every quantitative claim is sourced or omitted.
Common Questions
Common questions about medical billing denial benchmarks 2026: industry data, specialty breakdowns, top denial codes.
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Get a Free Billing Audit arrow_forwardWhat is the average medical billing denial rate in the United States?
The most commonly cited industry first-pass denial rate range across U.S. physician practices is 9 to 12 percent, sourced from MGMA DataDive practice-management surveys and HFMA Revenue Cycle Improvement published guidance. That range has remained the published baseline across recent years of MGMA and HFMA reference material. HFMA's top-quartile target for high-performing physician practices is below 5 percent on first submission, and the HFMA clean-claim benchmark — the proportion of claims that adjudicate to a paid or appropriately adjusted state on first submission without rejection or denial — is 95 to 98 percent. Specialty mix, payer mix, and operational discipline drive the variance within this range. Surgical specialties with heavy NCCI bundling exposure tend to sit at the higher end when modifier discipline is weak; practices with disciplined pre-submission scrubbing and real-time eligibility verification sit at the lower end.
What is the most common reason for claim denials?
The denial categories most consistently flagged across MGMA, HFMA, and AAPC published guidance as the highest-frequency drivers in U.S. physician practices are eligibility (CARC 27 expenses incurred after coverage terminated, CARC 31 patient cannot be identified as the insured), prior authorization (CARC 197 precertification or authorization absent), medical necessity (CARC 50 non-covered services not deemed medically necessary by the payer), bundling under NCCI Procedure-to-Procedure edits (CARC 97 payment included in the allowance for another service or procedure, and CARC 236 procedure or modifier combination not compatible per NCCI), and timely filing (CARC 29 time limit for filing has expired). Approximately 20 CARC codes account for around 80 percent of denial volume in physician practices, a frequency pattern referenced consistently across industry sources. The exact mix varies by specialty and payer.
Which CARC codes appear most often on medical billing denials?
The CARC codes most consistently identified across X12 reference material, MGMA, HFMA, and AAPC as the recurring physician-practice denial set are CARC 1 (deductible), 2 (coinsurance), 3 (copayment), 16 (claim or service lacks information), 18 (exact duplicate), 22 (covered by another payer per coordination of benefits), 27 (expenses after coverage terminated), 29 (timely filing expired), 45 (charge exceeds fee schedule), 50 (not medically necessary), 96 (non-covered charge), 97 (bundled into another service), 109 (not covered by this payer), 197 (precertification absent), 204 (not covered under current benefit plan), and 236 (procedure or modifier combination not compatible per NCCI). The X12 official CARC list is maintained at x12.org and updated quarterly. Public, payer-level frequency percentages for individual CARC codes are generally not released — payers do not publish CARC-level adjudication frequencies — so the codes above are the ones industry sources most consistently flag as high-frequency rather than figures with published national percentages.
How does denial rate vary by specialty?
Specialty mix is one of the largest single drivers of denial-rate variance because each specialty has its own dominant denial pattern. Surgical and procedural specialties cluster on bundling denials under NCCI Procedure-to-Procedure edits (CARC 97) and modifier issues (CARC 4) — cardiology sees this on diagnostic-to-PCI conversions (93458 with 92928), orthopedics on shoulder arthroscopy (29806 inside 29827), and dermatology on biopsy and destruction code pairings. Time-based and visit-based specialties cluster on coding-pattern audits and modifier 25 issues — mental health on the 90837 audit threshold, family practice and internal medicine on 99214-versus-99213 leveling, urgent care on Cigna's 99214 low-complexity audit. Therapy specialties cluster on time-discipline rules — physical therapy on the 8-Minute Rule and the 97140-plus-97530 NCCI pair, ABA on concurrent 97155-and-97153 billing audits. Each specialty's payer-specific patterns are documented on the corresponding MedPrecision specialty page.
What is a good first-pass denial rate target for medical practices?
HFMA's published top-quartile target for physician-practice first-pass denial rate is below 5 percent. Practices in the top quartile of HFMA-benchmarked groups operate consistently under this threshold. The corresponding clean-claim benchmark — the proportion of claims that adjudicate to a paid or appropriately adjusted state on first submission without rejection or denial — is 95 to 98 percent per HFMA published guidance. Reaching the under-5-percent tier typically requires several operational disciplines simultaneously: pre-submission claim scrubbing with quarterly-refreshed NCCI and MUE edit tables, real-time eligibility verification before service, pre-authorization tracking integrated with scheduling, CARC-categorized denial worklist routing, modifier discipline created at the point of care rather than at appeal time, daily timely-filing aging review, and a same-week feedback loop from denials back to front-end and coding teams. The discipline gap rather than any single tactic is what separates the median 9-to-12 percent industry range from the top-quartile under-5-percent tier.
How much revenue do practices lose to claim denials annually?
HFMA published guidance places the cost of an in-house claim denial appeal at roughly $25 to $118 per claim depending on complexity, with the higher figure cited in Advisory Board research. That cost combined with the HFMA published finding that approximately 65 percent of denied claims are never appealed industry-wide — despite typical first-level appeal overturn rates of 50 to 70 percent on appealable categories — means practices without disciplined denial-management workflow forfeit recoverable revenue at scale. The exact dollar figure per practice depends on volume, payer mix, specialty, and the average billed-charge per denied claim. National-level dollar totals for unrecovered denial revenue are not publicly released as a single benchmark, but the per-practice impact is consistently described in industry reference material as a meaningful percentage of net revenue — practices with denial rates in the 9-to-12 percent industry range routinely cite denial-driven revenue loss as one of the top three operational concerns flagged on MGMA practice surveys.
What percentage of denied claims are appealed?
HFMA published data indicates that approximately 65 percent of denied claims are never appealed industry-wide, meaning roughly 35 percent of denied claims do enter the appeal process. The figure is referenced consistently across HFMA Revenue Cycle Improvement guidance and is cited on the MedPrecision denial-management-services page. The reasons most commonly cited for claims going unappealed are the cost of appeal (HFMA-cited range of approximately $25 to $118 per claim depending on complexity), staff-resource constraints, missed payer appeal-filing windows (commercial payers typically allow 60 to 90 days from the denial date to file a first-level appeal; Medicare Part B allows 120 days for Redetermination under 42 CFR 405.942), and lack of CARC-categorized denial worklist infrastructure. The implication is that appeal infrastructure itself — not appeal probability — is the bottleneck for most practices, because the typical appeal overturn rate on appealable categories is 50 to 70 percent when documentation supports the appeal.
What is the appeal overturn rate on denied medical claims?
The industry-average first-level appeal overturn rate referenced in HFMA Revenue Cycle Improvement guidance is 40 to 50 percent across all denial categories combined, while best-practice denial-management programs achieve overturn rates in the 65 to 75 percent range. Overturn rates vary substantially by denial category. Bundling denials under CARC 97 typically overturn at 50 to 70 percent on first-level appeal when the NCCI Modifier Indicator is 1 and operative or progress-note documentation supports the modifier (modifier 59 or one of the X-modifiers XE, XS, XP, or XU). Medical-necessity denials under CARC 50 overturn in the 55 to 65 percent range when supported by peer-reviewed clinical literature and payer-specific medical-policy citations. Prior-authorization denials under CARC 197 overturn at 70 to 80 percent when retrospective authorization can be obtained. The differential between industry-average and best-practice overturn rates is driven by payer-specific appeal templates, complete clinical documentation packages, and systematic escalation through reconsideration, formal appeal, and external independent review when warranted.
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