15 May

How to Calculate Denial Rate

The denial rate represents the percentage of claims denied by payers during a given period and quantifies the effectiveness of your revenue cycle management process. A low denial rate indicates a healthy cash flow. The industry average for denial rate is 5% to 10%, but the desirable rate would be below 5%.

To calculate your practice’s denial rate, add the total dollar amount of claims denied by payers within a given period and divide by the total dollar amount of claims submitted within the given period.

 

Sample Calculation

Calculate Claim Denial Rate
  • (Total of Claims Denied/Total of Claims Submitted)

 

  • Total claims denied: $10,000
  • Total claims submitted: $100,000
  • Time period: 3 months
  • $10,000/$100,000

 

  • 10
  • Denial rate for the quarter: 10%

 


 

Learn how to reduce claim denials and rejections

Denials and Rejections

Written by Jason Gerber

As the Executive Vice President of Business Development, Jason provides the strategic leadership of the operational management team. This encompasses the oversight of all aspects of client account services, revenue cycle management, IS/IT services, and electronic health record/practice management deployment services. With more than 16 years in the industry, Jason has an in-depth working knowledge of full revenue cycle and is an active participant in national and regional FQHC/CHC trade associations.

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