Hey, it’s Athena,
You can finally benchmark your denial rate
For the first time, insurers had to publish prior authorization metrics. KFF just did the math on them.
Standard prior auth denial rates: 12% in Medicare Advantage, 14% in Medicaid managed care, 18% on the ACA exchanges. UnitedHealth denies 17% of MA requests. Centene denies 25% on the exchanges. Elevance denies 5% in MA. Same market, same rules, three times the denial rate depending on whose card the patient hands you.
Then the number that should reorganize your week. Medicare Advantage plans overturn 67% of prior auth denials that get appealed. Medicaid MCOs overturn 47%. And KFF notes denials are "rarely appealed."
Two thirds of MA prior auth denials are wrong, and most organizations write them off instead of fighting them. That gap is not a payer problem. It is a staffing and workflow problem, and it is the highest-yield thing in your building right now.
Caveat worth knowing: insurers reported percentages only, with no request volumes, no service-type breakdown, and no denial reasons. You can benchmark. You cannot yet diagnose.
Let's dive into it.
This Week's Reads
Two from the exactrx.ai archive that this week's news made relevant again.
Medicare Advantage Denial Rates 2026: The Appeals Economy: we argued MA denials were being written off at scale. KFF just put a number on it.
No Surprises Act IDR Final Rule 2026: the $15 fee and the batching rules, which just got a lot more interesting. See item one below.
Modifier 59: When to Use It, When to Leave It Off, and the Other Modifiers That Put Your Revenue at Risk: OIG found 40% of code pairs billed with 59 failed Medicare requirements, about $59M a year. Which indicator actually lets you bypass an edit, why XU utilization is now getting the same scrutiny 59 used to, and the four failure patterns auditors look for.
Two weeks left on OPPS
Comments on the CY2027 OPPS/ASC rule close August 31. That is 14 days.
The rule adds ~618 procedures to the ASC Covered Procedures List, pulls ~637 off Inpatient Only on the way to eliminating the list entirely by January 2029, and puts eight botulinum toxin codes under prior auth starting July 2027. If your case mix is about to change, this is the window where you get a say in it.
We built a one pager on which additions matter by specialty. Reply "OPPS" and I'll send it.
Deals Tracker
EnableComp acquired Helix Advisory for its AI underpayment detection, folding it in as a zero balance review capability. EnableComp recovers about $3B a year across 1,000+ hospitals. Terms undisclosed. (Aug 12)
UnitedHealth paid $3B for Alegeus, per an SEC filing. Alegeus administers HSA, FSA, and HRA accounts for 26M+ members and moves $6B a year in consumer healthcare payments. Patient responsibility rails now run through UHG. (Aug 10)
Flagler Health raised $50M Series B led by Bessemer for an MSK operating system that automates billing and prior auth inside the EMR. Claims $164K in added annual revenue per provider. (Aug 11)
XiFin took a Series B stake in Notable Systems and signed a multi-year alliance. Notable's AI reads the unstructured faxes and paper that gate adjudication. A billing platform buying into its own AI supplier is a structure to watch. (Aug 11)
DermCare Management and U.S. Dermatology Partners combined, creating one of the largest dermatology groups in the country: 12 states, 390+ providers, 3M+ patients a year. Terms undisclosed. (Aug 13)
Also worth noting: Kyndryl is acquiring Healthcare IT Leaders (Aug 10), the managed services layer under a lot of Epic and Oracle revenue cycle builds. And AdventHealth and Intermountain signed a definitive agreement on an eight-hospital Denver joint venture (Aug 13).
What to Watch Next
1. The Fifth Circuit just gutted the QPA formula. On August 11 the court vacated core parts of the No Surprises Act qualifying payment amount methodology in Texas Medical Association v. HHS. Insurers can no longer fold "ghost rates" into QPA calculations, and bonus and incentive payments now have to be included. The court found the methodology had "upended the NSA's dispute resolution process," producing artificially low QPAs. CMS said on August 13 it anticipates issuing guidance shortly. If you have open IDR cases priced off an inflated QPA, they just became live questions.
2. DOJ intervened over a rendering provider field. On August 10 the government joined a False Claims Act suit against three Colorado practices alleging that for nearly a decade, services furnished by NPs and PAs were billed under a physician's provider number at the full physician rate. The billing continued after the physician died. This is an incident-to and supervision documentation failure, and it is the kind of thing that never shows up in a denial report because the claims pay.
3. Electronic prior auth APIs go live January 1, 2027. Under five months. MA plans, Medicaid and CHIP managed care, and exchange issuers all have to support standardized APIs that let you check requirements and submit from inside the EHR. The 72 hour expedited and 7 day standard decision windows are already in force. Meanwhile only 7% of organizations report having dedicated prior authorization software. That gap closes fast or it gets expensive.
Ask Exactrx:
Last issue's Q&A got more replies than anything we've run, so we're keeping it going.
Q. "We're getting slammed with denials on 20550 billed with 20610, ten and counting, from HAP, Aetna, BCBS, Priority Health, Humana, and Medicare. All CO-97, payment included in another service. Typical case is a right supraspinatus tendon sheath injection with a right glenohumeral joint injection, different diagnosis on each line. Is 59 or XS the fix?"
A. Neither, and the reason sits upstream of the modifier. The 20550 is the wrong code. CPT 20610 covers a major joint or bursa, and it names the subacromial bursa. A "supraspinatus tendon sheath" injection is a misnomer: the supraspinatus has no synovial sheath, so an injection there lands in the subacromial bursa. Bill one 20610.
Even if it weren't, XS wouldn't hold. The denial comes from the NCCI PTP edit pairing 20610 with 20550, and XS only bypasses it if the injection hit a separate structure. It didn't. NCCI Chapter 4 defines the unit of service for 20600 through 20611 as "a joint and its surrounding bursae, if any." The bursa and the joint are one structure for billing purposes. And two different diagnosis codes prove nothing, because PTP edits pair procedures and never read the diagnosis.
20550 is separately billable alongside 20610 when the sites are genuinely different, like a de Quervain's injection at the wrist with a glenohumeral injection.
Worth knowing what sits under this: Coordinated Health paid $12.5M to settle FCA claims for unbundling ortho surgeries with modifier 59, $1.25M of it from the CEO personally, after the surgeon rewrote his op report template so billers could support the modifier. Consultants flagged it twice. Nobody stopped.
Here’s a bit more information on Modifier 59:
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So: what's your appeal rate? If you know it off the top of your head, you're ahead of most of this list. If you don't, that's the week's project, and I'd genuinely like to hear what you find. Hit reply.
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