~$25
to rework one denied claim at the practice level
MGMA / Change Healthcare (~$25.20)
The real leak
It isn’t that appeals lose. It’s that they’re never filed.
In Medicare Advantage, insurers made roughly 52.8 million prior-authorization determinations in 2024 and denied 4.1 million of them (7.7%). Of those denials, only 11.5% were appealed — and 80.7% of appeals were overturned.1 Flip that around: when a denial is challenged, it is reversed about four times out of five. The other ~89 in 100 simply disappear into write-offs.
That pattern is not unique to Medicare Advantage. Across payers, the share of denials that get worked at all is small — a national look at the numbers found less than one percent of denied claims are formally appealed, even though the ones that are win most of the time. The skipped denials aren’t unwinnable. They’re unworked.
If 4 in 5 appealed denials are overturned, the ones you skip aren’t unwinnable
— they’re unworked.
The arithmetic
Why the small-dollar denials quietly die in your queue.
Every appeal costs roughly the same labor whether the claim is worth $80 or $800 — so the math turns against the small ones first. Change the unit cost of the appeal and the same backlog changes character:
~$57
to fight one denied claim at the hospital level, and climbing
Premier, 2023 data ($57.23)
11.8%
initial denial rate in 2024, up from 10.2% in 2020
Kodiak Solutions, 2025
Denial rates keep rising — 41% of providers now say more than one claim in ten is denied
(Experian, State of Claims 2025). The write-off bucket fills fast — not with lost causes, but with
claims that weren’t worth the hours at hand-written effort.
Reworking a single denied claim runs about $25 at the practice level (MGMA, from Change Healthcare data); at the hospital level the cost of fighting a denial has climbed to ~$57 per denied claim (Premier, 2023).23 Meanwhile initial denial rates keep rising — 11.81% of claims in 2024, up from 10.2% in 2020 (Kodiak), and 41% of providers now say more than one claim in ten is denied (Experian, 2025).45
Where it concentrates
Most denials cluster in a handful of CARC categories.
And almost all of them turn on documentation, not the merits of the care — which is exactly what makes them appealable at scale. When we mapped the codes behind America’s denials, the same short list of reason codes accounted for the bulk of the volume.
CO-197
Auth / precert absent or invalid
Show auth was on file, retro-auth, or not required.
CO-50
Not deemed medically necessary
Tie the chart to the payer’s own coverage policy.
CO-16
Missing / incomplete information
Supply the specific missing element.
CO-11
Diagnosis inconsistent with procedure
Correct the linkage or add supporting dx.
CO-29
Past timely-filing limit
Prove timely submission or a good-cause exception.
CARC = Claim Adjustment Reason Code (the standardized denial reason on the 835 / EOB).
What changes in 2026
CMS just made denials easier to attack.
The CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F) takes operational effect in 2026 and shifts two things in the appealer’s favor:6
The tailwind · CMS-0057-F
Two changes that matter for your workflow
- Impacted payers must decide standard prior auth in 7 calendar days, expedited in 72 hours.
- Payers must give a specific reason for every denial — not a generic code.
A specific, documented denial reason is the raw material of a targeted appeal. It makes the rebuttal faster to assemble and far harder for the payer to wave away — and it is precisely the kind of structured input that can be handled systematically rather than one painful claim at a time. When the first federal disclosures of payer prior-auth metrics landed, we read what the first prior-auth disclosures actually revealed — and the direction is the same one this rule points.
The move
Appeal everything — not just the claims worth the hours.
The opportunity isn’t winning more of the appeals you already file — you mostly win those. It’s making each appeal cheap enough to file all of them, including the four-in-five-overturned denials currently aging out. Merits Appeals turns a denial into a ready-to-send, payer-specific appeal letter in minutes: the CARC rebuttal, the medical-necessity argument, and the payer’s own policy — assembled from the denial and the chart, every quote verified verbatim. Your team reviews and signs.
For a multi-client desk, that runs on one account: credits held per client, one login for the whole team, and a referral commission on any practice that buys its own account. The billing-company partner program lays out the terms — and the honesty guardrail cuts both ways: when a denial rarely wins on the merits, the engine says so before a credit is spent, so your recommendation stays the asset.