In Case You Missed It
“We fired our coding team and our denial rate didn’t change.”
That experience is more common than you might think. Teams often focus on coding because that’s where denials show up, but the underlying issues are usually introduced much earlier in the workflow, long before the claim even reaches billing. Read below to learn what's really happening and the 3 common myths we’ll debunk.
Myth 1: "Denials are a billing problem"
Did you know?
40% of denied claims are due to missing or inadequate documentation, according to recent data from the Healthcare Financial Management Association (HFMA). This highlights the urgent need for pre-submission validation.
Denial appeals cost the industry $21.3 billion annually, with many claims requiring resubmission multiple times before approval, as reported by the American Hospital Association.
Denials often show up in billing, but they should not be treated as a billing problem. The real drivers are upstream, often occurring before the claim ever reaches the billing department. Here’s what typically happens:
A case is scheduled without confirming network status.
Insurance information is incomplete or incorrect at intake.
Prior authorization is missing or doesn’t match the procedure.
Documentation doesn’t meet payer criteria.
By the time the claim is submitted weeks later, the denial has already been set in motion. Billing teams only see what’s been coded, but they can’t fix earlier issues. The key to reducing denials lies in catching these problems before the claim reaches billing.
“We code it right. That’s not the issue. The case was never authorized, eligibility wasn’t verified, or the scheduler booked an out-of-network surgeon without flagging it. By the time it gets to my team, the damage is already done.”
Myth 2: "If the code is right, the claim will pay"
The reality:
A correct code doesn’t guarantee payment. Denials can occur due to eligibility issues, incomplete documentation, or mismatched prior authorizations, even with correct coding.
Evidence:
Denial rates continue to rise, with Aetna’s appeal success rate for prior authorization denials at 23% in 2026, emphasizing the growing challenges providers face in resolving denials.
Key takeaway:
Coding is just one part of the equation. Implement real-time eligibility verification and conduct pre-authorization checks to prevent issues before the claim is submitted.
Myth 3: "Prior auth approval means you're covered"
The reality:
Prior authorization approval must align with the correct procedure, site of care, and supporting documentation. Even small discrepancies can lead to denials, even with prior auth approval.
Evidence:
New CMS regulations require payers to report prior authorization denial rates, turnaround times, and appeal outcomes for Medicare Advantage, Medicaid, and CHIP plans that started in 2025.
Key takeaway:
Ensure that the procedure, site of care, and documentation are double-checked against payer requirements before submission. Invest in systems that allow you to verify and align all claim elements upfront.
What’s Changing
Payer requirements are becoming more explicit and consistently enforced. For example, UnitedHealthcare recently updated its policy to require prior authorization for spinal fusion surgeries, effective January 2026. Policy updates like these are happening more frequently, with documentation standards becoming more detailed. Automated review systems, like Cigna’s new AI-driven claim adjudication tool, allow payers to evaluate submissions with greater consistency. These changes mean payers are reviewing claims with stricter criteria upfront, making it even more important to get everything right before submission.
As requirements tighten and more of the burden shifts to pre-submission accuracy, organizations are changing how they structure and control their workflows. That shift is already visible in recent M&A activity.
M&A Activity
Trend: Consolidation continues to center on scale, primary care access, and stronger control over referral networks and outpatient capacity.
What to Watch Next
Stricter Compliance Enforcement on Out-of-Network Care
As payers increase their scrutiny of out-of-network care, particularly in high-cost areas like surgical procedures and specialist services, providers will face tighter requirements for network verification. Expect more Medicare Advantage and commercial insurers to enforce penalties for failures in network status verification during the scheduling phase, starting in mid-2026. Providers who are not updating network data in real-time risk increased denials due to eligibility mismatches.
A Surge in Payer-Driven Data Transparency
Payer transparency initiatives are continuing to gain traction. UnitedHealthcare, for example, has begun publishing detailed claim adjudication metrics, including average claim approval times and denial rate trends by procedure. By Q3 2026, expect a shift toward greater data accessibility across more payers, allowing providers to see real-time trends and better anticipate claim rejections or payment delays. Watch how payers like Anthem and Aetna will follow suit, pushing organizations to adapt and adjust workflows to meet transparency requirements.
Rising Emphasis on Patient Eligibility as a Revenue Cycle Metric
Eligibility verification errors are no longer just an operational issue, they are becoming a key performance indicator (KPI) for organizations. As Medicare Advantage plans face increasing pressure to improve service quality, eligibility accuracy will be tied to reimbursement outcomes. Starting in 2026, expect more health systems to report eligibility verification success rates as part of their public metrics, impacting everything from claims approval to reimbursement cycles.
ExactRX Dispatch highlights emerging payer enforcement patterns and the downstream revenue risks they create before they show up in denials.
This is the problem we’re building for at ExactRx.