Reworking a denied claim costs about $25 at a practice and about $181 at a hospital, and 38% to 66% of denied claims are never resubmitted, depending on the payer. For a multi-specialty group, one 2026 industry analysis puts the yearly loss from denials, underpayments, and other leaks at $150,000 to $400,000. Prevention costs far less than rework, which is why catching a claim before it ships beats appealing it after the fact.
It is easy to treat a denial as a paperwork hiccup. The numbers say otherwise. Each denied claim carries a direct rework cost, a timing cost, and a quiet leak from the ones nobody ever gets back to. Add them across a year and the figure is larger than most practice owners expect.
The direct rework cost
Reworking a single denied claim costs about $25 at a practice and about $181 at a hospital, according to the Journal of AHIMA (opens in a new tab), before a dollar of the original revenue is recovered. MGMA (opens in a new tab) puts the practice figure at $25.20. That is staff time spent reading the reason code, finding the gap, correcting the claim, and resubmitting. The work is real even when the claim is eventually paid.
The claims that are never reworked
The bigger loss is the denials that never get touched again. By Friday, the team is already buried in next week’s queue, and a meaningful share of denials are simply abandoned. An NBER study (opens in a new tab) of U.S. physician claims from 2013 to 2015 found that physicians never resubmit 65.8% of denied Medicaid claims, about 38% for Medicare, and about 40% for commercial insurance. Every one of those is revenue the practice earned and never collected.
The compounding leak
Now scale it. A practice with a few hundred denials a month, a $25 rework cost on each, and a large share never reworked is losing real money every month, quietly, line by line. One 2026 industry analysis (opens in a new tab) of 180 multi-specialty groups puts the yearly loss from denials, underpayments, and other leaks at $150,000 to $400,000. It rarely shows up as one alarming number, which is exactly why it persists.
The cheaper path
Prevention beats rework every time. A claim caught before submission costs a fraction of an appeal, and it never enters the never-reworked pile. That is the whole argument for moving denial work upstream.
Where Heron fits
Heron catches risky claims before they ship and pursues the denials that do happen, so less revenue leaks out in the first place. Learn more about denial prevention and denial intelligence.
Sources
- Dunn, Gottlieb, Shapiro, Sonnenstuhl and Tebaldi, A Denial a Day Keeps the Doctor Away, NBER Working Paper 29010, revised January 2023 (opens in a new tab)
- Claims Denials: A Step-by-Step Approach to Resolution, Journal of AHIMA, April 25, 2022 (opens in a new tab)
- 6 keys to addressing denials in your medical practice’s revenue cycle, MGMA, March 18, 2021 (opens in a new tab)
- Is Your Practice Losing Revenue?, Medical Billers and Coders, April 30, 2026 (opens in a new tab)
- 65% of denied claims never get resubmitted, Stanislav Sukhinin, CFA, Sorso (opens in a new tab)