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Insights and Trends

The 2025 Denials Outlook: Why Partnerships Are Key to Hospital Financial Growth

Hospitals and health systems spent nearly $20 billion in 2022 appealing denied claims.1 As denial rates continue to rise – averaging a 3% increase annually – hospitals are having to expend extra labor, resources and finances, ultimately impacting patient’s access to timely, critical care.2

This escalating challenge has pushed denials management to the forefront of hospital strategic priorities, as highlighted by an Experian Health survey. The survey further reveals that 78% of hospitals report a declining experience with commercial payers, compelling them to seek alternative claims management solutions that promise a greater return on investment (ROI).3

Opportunities For Reducing Denials and Improving Hospital Efficiency

Navigating healthcare revenue cycle system for post-acute care is complex. Consequently, building and managing an effective in-house denials management system poses significant challenges.

According to the same Experian survey, 43% of respondents plan to leverage outside expertise to meet their hospital’s needs.3 This number is only expected to rise, as hospital joint venture and contract management partnerships continue to rapidly expand year-over-year.4

The right partner provides access to specialized staff trained in navigating the intricacies of the claim denials space and the evolving regulatory environment. They will also have clinical liaisons that help effectively identify patients that qualify for various specialized services – getting patients to the right care setting, at the appropriate time in their care journey.

This expertise is especially critical as hospitals note several reasons why claims denials management is taking precedent within the strategic planning process. These reasons include:3

  1. Payer policy changes occurring more frequently (67%)
  2. Reimbursement taking longer (51%)
  3. Increase in claim submission errors (43%)
  4. Overall increase in denials (42%)

Partnering with an experienced post-acute expert can help hospitals regain control of their denials process without overstretching existing resources, thereby enabling them to remain focused on their core service lines and, most importantly, patient outcomes.

Don't let denials hinder your progress. Contact us to discover how Lifepoint can help your hospital master today's challenges and build lasting resilience against future shifts.


References:

  1. https://www.aha.org/aha-center-health-innovation-market-scan/2024-04-02-payer-denial-tactics-how-confront-20-billion-problem
  2. https://www.ajmc.com/view/how-insurance-claim-denials-harm-patients-health-finances
  3. https://www.experian.com/healthcare/resources-insights/thought-leadership/white-papers-insights/state-claims-report
  4. https://www.healthcaredive.com/news/hospital-mergers-acquisitions-rebounded-last-year-expect/640518/

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