Claim denials are no longer a routine operational issue for healthcare organizations. Over time, they have become a steady source of financial loss. As payers rely more heavily on automated systems to review and adjudicate claims, many practices struggle to keep pace. Claims are often processed within seconds, sometimes without any human review, and revenue can be lost before internal teams have a chance to respond.
At a high level, the revenue cycle may appear stable. Claims are submitted. Payments are received. Daily operations continue. That apparent stability can obscure underlying issues. Denials that are delayed, partially resolved, or missed entirely result in losses that accumulate gradually over time.
Healthcare organizations are completing required tasks, but process gaps allow revenue to go unrecovered. At Talisman Solutions, we provide AI medical billing services to providers and healthcare organizations, and our role is to identify those gaps and address them in a practical, operational way. Before we explain how automation helps, let’s understand the number of claim denials.
The Cost Behind Denials (It’s Worse Than It Looks)
Here is the part that is often underestimated. A denied claim does not only result in delayed or lost payment. Every time a claim is denied, it creates extra work for the staff. They have to review the denial, find out what went wrong, fix the issue, resubmit the claim, and follow up on it. When this happens again and again, the same steps are repeated each time, taking more time and increasing costs, which ultimately raises overall billing expenses.
Industry benchmarks estimate the cost of reworking a single denied claim to be between $25 and $180. This includes labor, administrative overhead, task switching, and repeated manual corrections. When this effort is multiplied across dozens or hundreds of denials, the financial impact increases quickly.
To understand the full impact, let’s look at a representative example based on common industry benchmarks and average practice volumes to illustrate how denial-related losses can add up over a year.
A $240,000 Annual Loss: A Representative Example
Picture a mid-sized healthcare practice.
- About 1,000 claims a month
- A denial rate of 8% (that’s 80 denials)
- An average claim value hovering around $200
- Roughly two hours of rework per denial
- Billing staff paid $20 an hour
Now, do the math.
- Lost revenue: 80 denied claims × $200 = $16,000
- Labor cost to fix them: (80 denials × 2 hours) × $20/hour = $3,200
- Total monthly hit: $19,200. Gone.
Stretch that across a year and—well—you’re staring at $240,000 evaporated. Not because care wasn’t delivered. Not because patients didn’t show up. But because claims didn’t glide cleanly through the system.
From a financial perspective, medical billing ROI, even a modest reduction in denials can deliver a strong return—recovering six figures in annual revenue without increasing staffing or operational overhead.
Manual Billing Workflows Struggle
Based on multiple studies and industry findings, denial rates are increasing. Nearly 40% of medical billers report higher denial rates compared to the previous year. At the same time, the administrative effort required to manage denials continues to grow. As a result, up to 60% of denied claims are never resubmitted, leading to permanent revenue loss.
Billing teams experience this pressure directly. About 67% of billers report that repetitive administrative tasks consume more than 25% of their workday.
If most of the day is spent fixing errors and resubmitting claims, there’s no time left to address what’s causing the denials. That’s how denials pile up, rework grows, and revenue slips further out of control.
Preventing Claim Denials with Proactive Oversight and Technology
Protecting revenue requires an expert billing team, smart processes, and systems that operate with speed, accuracy and consistency. When billing work is supported by automation and RPA, with experienced medical billing professionals overseeing the process, claim denials start to come down.
At Talisman Solutions, this is exactly how we work. We lead with experienced billing professionals who understand clinical nuance, payer behavior, and operational realities—supported by automation and RPA where it adds speed and consistency. Technology plays an important role, but it does not replace human judgment. Many scenarios still require context, interpretation, and an understanding of payer-specific complexity that only experienced teams can provide.
This approach works because it is proactive and guided by operational oversight. Instead of reacting after a claim is denied, our teams use automation to surface risks earlier in the process, based on real payer rules and historical denial patterns. Payers rely heavily on automated systems to identify even small discrepancies. Our billing experts understand how those systems work and, with the support of AI and automation, identify and resolve issues before claims are submitted.
Automation and RPA handle routine, rules-based tasks such as claim checks, data validation, and payer requirement monitoring. Billing experts then review exceptions, resolve conflicts, and apply judgment where automation alone is not enough. Missing information, coding mismatches, and payer-specific rule conflicts are addressed before submission—preventing denials rather than fixing them later.
By combining experienced human oversight with targeted automation, organizations reduce denials, recover revenue more efficiently, and operate a revenue cycle that is controlled, predictable, and financially sustainable—without sacrificing accuracy or accountability.
We’ve found that providers and healthcare organizations using AI and automation, supported by experienced medical billing experts overseeing workflows, report measurable improvements, including:
- An 87% reduction in manual data entry, reducing administrative error rates
- Denial rework completed 60% faster through automated triage, routing, and appeal preparation, which helps teams focus on claims most likely to be recovered
- Pre-submission claim scrubbing using predictive analytics to identify issues before claims are submitted
- Addressing risks earlier in the process improves clean-claim rates and reduces the number of denials reaching accounts receivable
Moving From Denial Management to Prevention
An 8% denial rate may appear manageable at first glance. As the numbers show, it can translate into roughly $240,000 in annual losses for a mid-sized practice once lost revenue and rework costs are factored in.
Reducing this impact doesn’t require hiring more staff or extending work hours. It requires stepping in earlier, improving how work flows, and preventing denials before they occur through a combination of AI, automation, and experienced human expertise.
At Talisman Solutions, this starts with evaluating denial patterns and identifying process gaps across billing workflows. When experienced oversight is paired with targeted automation, organizations reduce denials, recover revenue faster, and run a more stable, predictable revenue cycle.
