Delayed Reimbursements from Prior Authorization Denials and Rework
Definition
Prior authorization delays and denials lead to claim denials, with over 60% of denied claims never resubmitted, slowing payment cycles. Manual processes cause back-and-forth communications, extending time-to-cash. This results in high accounts receivable days and cash flow strain for physician practices.
Key Findings
- Financial Impact: Billions annually in denied claims
- Frequency: Weekly
- Root Cause: Inaccurate coding, incomplete documentation, and failure to use provider portals
Why This Matters
This pain point represents a significant opportunity for B2B solutions targeting Physicians.
Affected Stakeholders
Billing staff, Revenue cycle managers, Physicians
Deep Analysis (Premium)
Financial Impact
$100,000-$250,000 annually (Medicaid denial rate 15-20%; unresubmitted claims) β’ $100,000-$300,000 annually (delayed reimbursement + staff overtime for follow-ups) β’ $100,000-$350,000 annually (lost revenue; staff overtime; AR aging)
Current Workarounds
Compliance Officer builds carrier-specific approval checklists and tracks comp-related denials manually, often handling exceptions one by one with adjusters via calls and emails. β’ Compliance Officer cobbles together state Medicaid PA rules and managed Medicaid plan bulletins in spreadsheets and distributes them to staff, relying on spot checks of denied claims to refine the guidance. β’ Compliance Officer compiles Tricare authorization policies and distributes static summaries, then manually intervenes on problem claims and appeals when patterns of denial emerge.
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
Excessive Staff Time on Manual Prior Authorization Processing
Lost Patient Care Capacity Due to Prior Authorization Bottlenecks
Patient Treatment Abandonment and Churn from Prior Authorization Delays
Bottlenecks in Documentation-Coding Handoff
Under-coding and Missed Charge Capture in E/M Coding
Missed Charges and Coding Errors in E-Prescribing to Billing Workflow
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