MedEvolve Uncovers Hidden "Denials Tax" Driving Administrative Burden Across Health Systems

New benchmarks uncover the hidden administrative burden of payer denials, showing how front-end issues and repeated claim follow-up create costly downstream strain across health systems.

SAN FRANCISCO, April 13, 2026 /PRNewswire/ -- Payer denials create a significant but often unmeasured administrative burden for healthcare organizations, requiring repeated follow-ups that consume staff time long after a claim is submitted. New operational benchmarks from MedEvolve use touch-level analytics, which track each staff interaction required to move a claim from submission to payment, to quantify what the company calls the "denials tax."

MedEvolve's analysis shows that the true cost of denials extends beyond delayed or lost revenue. Each denied or disrupted claim can require multiple follow-ups across billing teams, clinical staff, and payer communication channels. Even when claims are ultimately paid, the cumulative effort required to resolve them creates significant operational strain.

"Denial rates alone do not capture how much work it actually takes to get paid," said Matt Seefeld, CEO of MedEvolve. "A claim may be reimbursed, but if it required five or six staff interactions to get there, the organization has absorbed a real operational cost."

Payer Friction Is Driving Hidden Work

While denial rates remain a standard industry benchmark, MedEvolve's findings show that the administrative workload associated with each claim may be a more meaningful indicator of revenue cycle performance.

Denial categories such as authorization failures, eligibility issues, and documentation requests often trigger repeated payer portal follow-ups, insurer calls, and documentation resubmissions. Across thousands of claims, that work creates a substantial but often unmeasured operational burden.

Additionally, denial reason codes may lack clarity around recoverability, documentation may be required even when outcomes rarely change, and delays in rework can increase exposure to timely filing limits. Organizations also often lack visibility in the relationship between effort and financial yield. "The real issue is not just the denial itself," Seefeld said. "It is the chain reaction of work required to investigate, document, and resolve it. That is the denials tax."

Front-End Financial Clearance Issues Drive Administrative Burden

Many of the issues that generate denial-related workload begin before a claim is ever submitted. Gaps in eligibility verification, coordination of benefits, prior authorization, and documentation collection can create avoidable downstream work for revenue cycle teams. Unresolved front-end issues shift that burden to the back end through claim correction, payer follow-up, documentation resubmissions, and appeals, while also contributing to delays, billing confusion, and added friction for patients.

"When we look at the number of touches and administrative waste involved in overturning denials on the back end, including issues related to eligibility, COB, and prior authorizations, these are mistakes made by people. And in some cases, mistakes made by the AI you've purchased to try to solve and dehumanize the revenue cycle," Seefeld said.

The result is a growing number of touchpoints required to move claims forward and a heavier administrative load across the revenue cycle. To reduce denials effectively, leaders need visibility into where those breakdowns begin so the appropriate teams, from the front office to coding and clinical documentation, can correct issues upstream before they create downstream rework.

Intelligent analytics allows teams to drill down to the exact cause of denials to prevent them upstream

Industry benchmarks continue to focus on lagging financial indicators such as denial rate, clean claim rate, and days in accounts receivable. While useful, these measures do not reflect how frequently staff must intervene to correct, resubmit, or resolve claims once payer friction occurs.

MedEvolve's framework instead focuses on the operational work required to move claims to resolution, giving healthcare leaders greater visibility into how often staff must rework claims, follow up with payers, and manage denial-related activity behind the scenes.

Touch-level measurement also highlights how often denial-related work does not result in meaningful reimbursement gains. Staff may review denial notices, gather documentation, contact payers, and submit appeals, only to confirm that the original denial decision will stand. "In many organizations, the operational burden behind reimbursement is far greater than leadership understands," Seefeld said. "You may not see a dramatic spike in denials, but staff are still working claims multiple times before payment. Until that work is measured, it cannot be reduced."

Although payer-related administrative burden affects healthcare organizations across the board, rural hospitals and other resource-constrained providers are often less equipped to absorb the repeated rework denials create.

Measuring the "Denials Tax"

MedEvolve's touch-level benchmarks introduce new operational indicators designed to help healthcare leaders measure denial-related workload and identify opportunities for improvement. Key metrics include:

• Denial Touches - Tracks both payer friction and front-end process gaps
• Average "Touches to Claim" Resolution - Helps gauge workflow efficiency and action quality
• Non-actionable Touches - Signals wasted effort and a need for better queue or status filtering
• Denials by payer - Determines which payers are causing the most additional work
• Common denial reasons – Pinpoints exactly where the breakdowns are occurring that result in denials

These measures provide visibility into where administrative effort is concentrated and where payer policies or internal workflows may be driving unnecessary work. As payer complexity continues to increase, operational visibility into denial workload is becoming essential for healthcare organizations seeking to improve efficiency and financial performance.

"Healthcare organizations are not just managing denials; they are managing the work created by them," Seefeld said. "Until that work is measured, it cannot be reduced."

About MedEvolve
MedEvolve is rewriting the rules of the revenue cycle, helping healthcare organizations move beyond labor-intensive, reactive reimbursement work. Its Effective Intelligence^® (Ei) platform provides visibility into the operational activity behind reimbursement, enabling leaders to identify avoidable effort, streamline workflows, and support scalable automation.

By reducing unnecessary touches and improving process control, MedEvolve helps organizations accelerate resolution, increase predictability, and operate more efficiently in an increasingly complex payer environment. Learn more at https://MedEvolve.com.

References

• Optum. (2024). The Optum 2024 revenue cycle denials index. 
• American Medical Association. (2024). 2024 AMA prior authorization physician survey. 
• Experian Health. (2024, September 18). State of claims 2024: Insights from survey findings. Experian Health Blog. 

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SOURCE MedEvolve