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

 

  • (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%