2026 Denial-Rate Benchmark by Specialty

Short answer

Headline findings for 2026:

• Average initial claim denial rate across U.S. medical practices: 11.8 percent in 2024 per MGMA, up from 10.2 percent a few years earlier.
• 41 percent of providers now see denial rates of 10 percent or higher per the Experian Health 2025 State of Claims survey, up from roughly 30 percent in 2022.
• Medicare Advantage denial rates spiked 4.8 percent year over year and now top 17 percent — more than double traditional Medicare.
• Highest-denial specialties: behavioral health (20 to 30 percent), orthopedics (14 to 22 percent), chiropractic and physical therapy (15 to 20 percent). Lowest: primary care and internal medicine (8 to 12 percent).
• Average denied amounts grew 14 percent year over year for outpatient and 12 percent for inpatient per MDaudit's 2025 Benchmark Report — financial exposure per denial is rising faster than denial volume.
• Above 10 percent initial denials means recoverable revenue is being left on the table. The fix is operational, not payer-side.

The average initial claim denial rate across U.S. medical practices reached 11.8 percent in 2024, up from 10.2 percent just a few years earlier, per the MGMA 2024 Cost and Revenue Report. That headline figure masks wide variance by specialty. Behavioral health practices see initial denial rates in the 20 to 30 percent range due to authorization intensity and parity law complexity. Orthopedic surgery and anesthesia practices with prior-authorization-heavy payer mixes routinely land at 14 to 22 percent. Chiropractic and physical therapy practices often sit at 15 to 20 percent when Medicare modifier logic breaks down. Primary care and internal medicine sit closer to the 8 to 12 percent band. According to the Experian Health 2025 State of Claims survey, 41 percent of providers now see denial rates of 10 percent or higher, a figure that has risen every year since the survey launched in 2022. Medicare Advantage denials spiked 4.8 percent year over year per Experian and now top 17 percent — more than double traditional Medicare rates. Per MDaudit's 2025 Benchmark Report, average denied amounts for outpatient claims rose 14 percent in dollar terms and 12 percent for inpatient, meaning the financial exposure per denial grew even faster than the volume. If your practice book is running above 10 percent initial denials, you are not an outlier — but you are leaving recoverable revenue on the table. See the denial management workflow guide for the operational response.

How denial rates have moved 2022 to 2026

The trajectory matters because it tells you whether the environment is stabilizing or intensifying. The short answer is that it is intensifying, with no sign of reversal as of mid-2026.

In 2022, approximately 30 percent of providers reported denial rates at or above 10 percent, per the first Experian Health State of Claims survey. By the 2025 edition of that same survey — now in its third year and drawing on 250 healthcare professionals — that figure had risen to 41 percent. The survey documents the year-over-year direction clearly: each wave found a larger share of the provider population sitting above what HFMA considers the acceptable threshold.

The MGMA cost and revenue benchmarks tell a similar story from the practice-level direction. The 10.2 percent average initial denial rate that characterized the mid-2020 period moved to 11.8 percent by the 2024 data cycle. That 1.6 percentage point shift compresses margins because the labor cost of working a denial — investigation, correction, resubmission, or appeal — is largely fixed per denial, so more denials on top of the same billing staff generates a direct productivity squeeze.

Commercial plan denial rates rose roughly 1.5 percent year over year between 2023 and 2024, per Experian. Medicare Advantage ran at a much steeper 4.8 percent year-over-year increase in the same period. The HFMA has documented that some not-for-profit health systems responded by exiting Medicare Advantage contracts entirely — a data point that signals how operationally burdensome MA denials have become for organizations without a billing infrastructure designed around them.

MDaudit's analysis — drawn from 1.2 million providers and 4,500 facilities across the first three quarters of 2025 — adds a severity dimension that volume-only data misses. The average denied amount for outpatient claims rose from $4,730 to $5,390 (a 14 percent increase). Inpatient average denied amounts moved from $504 to $565 (12 percent). External payer audit at-risk amounts grew 30 percent year over year per customer. Telehealth-related denials in dollar terms rose 84 percent. Outpatient coding-related denials rose 26 percent. This is not a stable environment where process optimization can hold the line; the payer behavior is actively escalating.

The HFMA Pulse Survey's finding that hospitals lose an average of 4.8 percent of net revenue to denials gives an aggregate financial framing. For physician practices and billing companies, the percentage varies by specialty mix, payer contract structure, and denial workflow maturity — but the directional pressure is the same.

The headline numbers from MGMA and Experian

These two sources are the most widely cited public benchmarks for professional practice denial rates. They use different methodologies — MGMA surveys physician practices and management groups, Experian surveys revenue cycle professionals — which is why reading them together gives a more complete picture than either source alone.

The 65 percent resubmission gap from Change Healthcare's 2024 data is the number that should anchor any conversation about denial ROI. An 11.8 percent initial denial rate becomes a permanent write-off problem if two-thirds of those denials never get worked. The recoverable share of initial denials — often cited in the 60 to 90 percent range depending on denial category — is only recoverable if someone works it within the payer's timely filing window.

Denial rates by specialty

Public data on specialty-level denial rates is less granular than overall practice data. The figures below synthesize MGMA benchmarks, Experian State of Claims specialty commentary, HST Pathways ASC data, specialist billing industry analyses, and peer-reviewed payer reporting. These are initial denial rates — the share of claims denied on first submission — not final write-off rates.

A few observations worth making explicit. Behavioral health's 20 to 30 percent range is not primarily a coding problem — it is an authorization and medical-necessity documentation problem. Payers have historically applied tighter medical-necessity standards to mental health claims than to comparable physical health claims despite MHPAEA parity requirements, and the Department of Labor found violations in approximately 74 percent of health plans audited between 2022 and 2024 on this basis. That denial pattern requires a different operational response than a chiropractic modifier error. See the behavioral health billing companies guide for the full specialty context.

Chiropractic and PT sit in similar but distinct denial territory. Both face Medicare modifier logic that is unforgiving — one missing AT on a Medicare chiropractic claim causes automatic denial; one missing KX once a patient crosses the $2,480 therapy cap threshold does the same for PT. The OIG has found that 82 percent of Medicare chiropractic payments reviewed were disallowed, almost entirely because maintenance visits were billed as active treatment. That audit finding reflects a systemic documentation and modifier management gap, not an edge case. See the chiropractic and PT billing companies guide for the modifier detail.

Anesthesia denial rates are highly bimodal. Practices using specialized anesthesia billing services often report sub-2 percent denial ratios because the ASA formula, concurrency modifier logic, and time-unit verification are handled correctly from submission. Practices using generalist billing software or non-specialist billing companies land in the 12 to 18 percent range because the formula and modifier interactions are complex enough that systematic errors compound across every claim. See the anesthesia billing companies guide.

Podiatry's exposure clusters around the Medicare routine foot care exclusion. The Q7, Q8, and Q9 modifiers convert a non-covered nail trimming service into a covered one when the patient has documented systemic conditions — but only if the documentation substantiates the modifier. HST Pathways reported that podiatry ASC claim denial rates ran around 16 to 17 percent in 2024 data, sitting persistently above the all-specialty average. See the podiatry billing companies guide for the clinical documentation requirements.

Where Medicare Advantage shifted the curve

Medicare Advantage deserves separate treatment in any 2026 denial benchmark because its behavior has diverged sharply from traditional Medicare and commercial plans.

Traditional Medicare processes claims under a relatively predictable set of rules with mandatory timely filing windows, established prior authorization requirements, and an appeals process governed by federal regulation. Medicare Advantage plans operate under different rules because they are administered by private insurers who have contracted with CMS to deliver the Medicare benefit. Those insurers can design their own prior authorization requirements, their own medical-necessity criteria, and their own appeals procedures — subject to CMS oversight that has historically been light.

The result is a prior authorization environment that has grown steadily more restrictive. KFF reported that Medicare Advantage insurers made nearly 53 million prior authorization determinations in 2024. Experian found that MA denial rates spiked 4.8 percent year over year — the steepest increase of any payer category — and that MA denials now top 17 percent, more than double traditional Medicare's denial rate. MDaudit's analysis found that the average denied amount for a Medicare Advantage-related claim rose 22.4 percent to approximately $1,000 between 2024 and 2025.

Specialty exposure to Medicare Advantage varies significantly with patient demographics. Practices with a Medicare-age patient mix — orthopedics, cardiology, podiatry, primary care, anesthesia for surgical specialties — carry the highest MA exposure. Behavioral health practices serving elderly populations face a distinctive combination of high MA volume and high inherent denial rates. Chiropractic Medicare revenue is already complex because of the active-versus-maintenance distinction; adding MA plan variance on top of that creates denial management work that requires tracking each plan's specific rules separately.

Several payer-level patterns have characterized the MA denial spike. Prior authorization requirements have expanded into service categories previously exempt — advanced imaging, specialty referrals, and outpatient procedures in particular. Medical-necessity denial criteria have tightened, and the documentation volume required to support an appeal has increased. Concurrent review requirements for inpatient admissions have become more aggressive, with step-down denials generating significant administrative burden.

The practical response for a billing company managing a high-MA practice book is treating MA prior authorizations with the same rigor as commercial managed care rather than assuming the Medicare-familiarity heuristic applies. Tracking MA-specific denial patterns separately from both commercial and traditional Medicare gives the data needed to identify which MA plans drive disproportionate denial volume, which is the starting point for contract negotiation conversations.

Top CARC codes driving denials in 2026

These are the codes that account for the majority of denial volume across specialties, based on X12 code utilization data, payer clearinghouse reporting, and specialty billing analyses. Each code pairs with a two-letter Group Code that determines the responsible party and the correct next action. The X12 maintained code list is the authoritative source; the interpretations below reflect standard industry practice.

The single most operationally costly pattern in denial management is treating PR-group codes as appealable. PR-1 (deductible), PR-2 (coinsurance), and PR-3 (copay) are not denials in any meaningful sense — they are amounts owed by the patient. Routing them into the payer appeal queue wastes staff time, inflates denial counts, and delays collection from the actual responsible party. A well-built denial triage system separates CO-group appeals from PR-group patient billing automatically, at intake.

CO-16 is the code where the paired RARC does the real work. CO-16 by itself says the claim is incomplete; the RARC specifies whether the missing element is a referring provider NPI, a rendering provider credential, a date of service conflict, or something else entirely. Treating CO-16 without reading the RARC first is one of the most common sources of incorrect corrections and resubmissions.

CO-197 is the authorization code that specifically causes behavioral health denials — authorization absent, not just incorrect. The operational pattern behind CO-197 in behavioral health is often a failed concurrent review during an extended treatment episode rather than a failure to obtain the initial authorization. That requires a different fix: tracking concurrent review expiration dates prospectively, not reactively after the denial arrives.

The denial management workflow guide covers each of these CARCs with investigation steps, appeal packet requirements, and routing logic in full detail.

What an above-benchmark denial rate signals about your billing operation

A denial rate above 10 percent is common. A denial rate persistently above 15 percent is a signal that something structural is wrong — and the specific denial mix usually identifies where.

Authorization failures concentrated in CO-197 and CO-198 point to a broken prior authorization workflow: either authorizations are not being obtained before service, concurrent reviews are expiring unnoticed, or authorization numbers are not being communicated from the clinical side to the billing side before claim submission. The fix is a prospective authorization tracking system with expiration alerts, not a retrospective appeal workflow.

Modifier errors concentrated in CO-4 and CO-11 point to either a coder training gap or a billing system that does not enforce modifier logic at claim creation. Anesthesia, chiropractic, and PT have modifier rules that are dense enough that relying on individual coder recall creates systematic error. The fix is scrubbing rules built around the specialty's modifier logic, applied pre-submission.

Timely filing failures concentrated in CO-29 are almost entirely an operations failure — claims are sitting in a queue, a hold, or an error state long enough for the filing deadline to pass. For most commercial plans, the window is 90 to 180 days from date of service. For Medicare, it is one calendar year. CO-29 denials that appear on Medicare claims indicate a submission process so slow or disorganized that an entire year elapsed. That is not a payer problem.

Bundling denials concentrated in CO-97 are the most technically nuanced category. They can represent legitimate payer application of NCCI edits, which are contractual and non-appealable. They can also represent incorrect payer application, where modifier 59 or the newer X-modifier series would have prevented the edit. The two situations require different responses, and conflating them results in either wasteful appeals on legitimate contractual reductions or uncontested write-offs on recoverable revenue. Identifying which is which requires billing software that surfaces NCCI edit applicability at the claim level.

Medical necessity denials concentrated in CO-50 in behavioral health often have a parity law dimension. If the payer would cover an equivalent physical health service under the same clinical criteria but is applying a stricter standard to the mental health claim, that is a MHPAEA violation, and the appeal pathway is regulatory rather than clinical. This distinction is lost on billing staff who route CO-50 appeals the same way regardless of specialty.

Final write-off rates — the share of denied revenue that is permanently lost after all appeal and recovery activity — are a lagging indicator but the most financially honest one. The HFMA benchmark for acceptable write-offs from denials is 2 to 5 percent of net patient revenue. Organizations exceeding that threshold on denials specifically (not total write-offs) need either a higher initial clean-claim rate, a better appeal success rate, or both.

How billing companies use these benchmarks

A billing company that manages multiple practice clients has three uses for denial benchmarks that a single-practice billing department does not.

The first is client onboarding diagnostics. When a new practice client comes on board with a billing company, the initial denial rate data — pulled from ERA history or provided by the incoming system — establishes a baseline. Comparing that baseline to specialty-specific benchmarks tells the billing company immediately whether the denial rate is a practice-specific problem or a specialty-norm issue. A behavioral health practice at 25 percent is not dramatically out of line. A primary care practice at 25 percent has a serious operational problem that the billing company should identify and document before accepting revenue guarantees.

The second is internal SLA targets. Billing companies that manage their own performance need specialty-specific denial SLAs rather than a single cross-specialty threshold. An SLA that targets 5 percent denials across all specialties is impossible for a behavioral health book and achievably loose for a primary care book. Setting denial rate targets at the specialty level, against the MGMA and Experian benchmarks for that specialty, gives the operations team a realistic and credible standard.

The third is competitive positioning. When a billing company pitches a prospective practice client that is currently doing billing in-house, the question of "what denial rate should I expect?" can be answered with benchmark data. A behavioral health practice currently at 28 percent initial denials, pitched a 20 percent target that the billing company has achieved with comparable clients, has a specific, credible number to evaluate — not a general claim about expertise.

The billing company software evaluation guide covers how to assess whether a software platform supports denial management at the sophistication level these benchmarks require. The billing company operations hub provides the full workflow context. If you want to see how Medi handles denial triage, routing, and appeal packet building across a multi-practice book, schedule a demo.

Methodology and sources

This page synthesizes publicly available benchmark data from four primary sources. Medi does not yet have a proprietary customer dataset and makes no claims based on internal performance data.

The MGMA 2024 Cost and Revenue Report is a physician practice management survey that collects revenue cycle metrics including initial denial rates from medical groups and physician practices across the United States. The 11.8 percent average initial denial rate cited throughout this page comes from that report. The MGMA also publishes specialty-level compensation and productivity data that contextualizes denial patterns within broader practice economics.

The Experian Health 2025 State of Claims survey is the third annual edition of a quantitative survey of 250 healthcare professionals, conducted in June and July 2025. It documents payer-level denial rate trends, the share of providers exceeding 10 percent denial rates, and the top drivers of denial volume including data quality, authorization, and payer behavior.

The MDaudit 2025 Benchmark Report is based on real-world data from 1.2 million providers and 4,500 facilities across the first three quarters of 2025. It provides dollar-weighted denial data rather than volume-only metrics, which is why it is particularly useful for understanding the financial severity of denial trends. MDaudit's network includes inpatient and outpatient facilities of varying sizes, so its figures reflect facility-level billing patterns that may differ from the physician practice patterns MGMA and Experian capture.

The HFMA provides benchmark thresholds through its MAP Keys initiative (industry-standard KPI definitions), its Claim Integrity Task Force report on standardizing denial metrics, and its Pulse Survey data on net revenue loss from denials. HFMA benchmarks are primarily oriented toward hospitals and health systems but are used by physician practice organizations as directional targets.

Specialty-specific denial rate ranges draw on HST Pathways ASC performance data for podiatry, OIG audit findings for chiropractic, the 2024 Behavioral Health Parity Report for mental health, the Optum 2024 Revenue Cycle Denials Index for orthopedics and multi-specialty patterns, and specialist billing industry analyses from Billing Dynamix, Medical Billers and Coders, and comparable professional sources. Where public data provides ranges rather than point estimates, ranges are used. Where multiple sources offer consistent directional data but different specific figures, the range encompasses the variation.

CARC code interpretations follow X12 official definitions, CMS ERA remittance guidance, and the FCSO Medicare guidance on common CARC applications. The operational interpretations — investigation steps, routing decisions, appeal strategies — reflect standard denial management practice as documented across multiple industry reference sources.

Frequently asked questions

What is a good denial rate for a medical practice in 2026?

The HFMA considers a denial rate below 5 percent to represent a well-managed revenue cycle, and high-functioning practices often operate in the 2 to 4 percent range for initial denials. The reality is that most practices are not at 5 percent. The MGMA reports an average of 11.8 percent, and 41 percent of providers exceed 10 percent. A more useful frame than "good" is whether your denial rate is above or below the specialty-specific benchmark: a behavioral health practice at 22 percent is tracking with peers, while a primary care practice at 22 percent has a structural problem.

Why are denial rates higher in Medicare Advantage than in traditional Medicare?

Medicare Advantage plans are administered by private insurers who set their own prior authorization requirements and medical-necessity criteria within CMS guidelines. Traditional Medicare's rules are set federally and apply uniformly. MA plans have used their flexibility to expand prior authorization requirements, tighten medical-necessity standards, and impose concurrent review requirements that traditional Medicare does not have. The result is a prior authorization and denial process that is more complex, more variable across plans, and more burdensome to manage than traditional Medicare. Experian found MA denial rates now exceed 17 percent — more than double traditional Medicare — and MDaudit found the average denied MA claim amount rose 22.4 percent in dollar terms in 2025.

What share of denied claims should eventually be recovered?

The recoverable share depends on denial category. Authorization and timely-filing denials have high recovery rates when the billing team works them promptly — often 80 to 90 percent of those denials can be corrected and resubmitted successfully. Medical-necessity denials have lower recovery rates because they require clinical documentation support and often go to formal appeal. Coding errors are generally correctable if caught within the filing window. The HFMA's 2 to 5 percent of net patient revenue as an acceptable write-off rate implies that the rest of the denied revenue — potentially 60 to 80 percent of initial denials — should be recoverable with a functioning denial workflow. Change Healthcare's data showing that up to 65 percent of denied claims are never resubmitted indicates that the theoretical recovery rate and the actual recovery rate diverge dramatically in organizations without structured denial management.

Which specialties have the highest denial rates in 2026?

Based on publicly available benchmark data, behavioral health practices see the highest initial denial rates — typically 20 to 30 percent — driven by authorization intensity, parity law disputes, and documentation requirements. Orthopedic surgery practices with prior-authorization-heavy payer mixes see 14 to 22 percent. Chiropractic practices see 15 to 20 percent, primarily from Medicare modifier errors. Physical therapy ranges from 14 to 18 percent for similar reasons. Podiatry runs at 15 to 17 percent around the routine foot care exclusion. Anesthesia ranges widely — sub-2 percent with specialized billing, 12 to 18 percent with generalist systems — because the ASA formula and modifier complexity are either handled systematically or not at all.

What are the most common CARC codes driving denials?

Across all specialties, CO-16 (missing or incomplete information), CO-197 (authorization absent), CO-50 (medical necessity), CO-97 (bundling), CO-22 (COB issues), and CO-29 (timely filing) account for a large majority of denial volume. CO-4 (modifier inconsistency) is the leading code in modifier-intensive specialties: anesthesia, chiropractic, physical therapy, and orthopedics. CO-15 and CO-197 dominate in authorization-driven specialties like behavioral health. PR-1 and PR-2 represent patient responsibility amounts that should not enter the appeal queue at all. The Optum 2024 Denials Index found that provider eligibility issues (24 percent) and authorization/pre-certification issues (16 percent) were the top two denial categories by volume.

How do I know if my denial rate is improving or declining?

Tracking initial denial rate over rolling 90-day periods by specialty and by payer is the minimum. A declining number of denied claims is not by itself progress if the average denied amount is rising — which MDaudit's 2025 data shows is happening across the industry. The metrics that matter together are initial denial rate, appeal success rate, average denied amount, and final write-off rate as a percentage of net revenue. HFMA's MAP Keys initiative provides standard definitions for these metrics so that benchmarking is meaningful across organizations. Tracking denial rate without tracking what happens to the denied claims — whether they are appealed, corrected and resubmitted, or silently written off — misses the financial story.

What is the difference between an initial denial rate and a final denial rate?

An initial denial rate counts all claims denied on first submission as a percentage of total claims submitted. A final denial rate counts claims that are ultimately never paid — after all appeals, corrections, and resubmissions — as a percentage of claims submitted. The gap between the two reflects the billing organization's appeal and recovery effectiveness. Most published benchmarks, including the MGMA 11.8 percent figure, measure initial denial rates because final denial rates require tracking claims through their complete lifecycle, which most organizations do not do systematically. For a billing company managing client accounts, tracking the difference between initial and final denial rates by client and specialty is one of the clearest indicators of operational performance.

Does using a specialized billing company reduce denial rates?

The available data says yes, when the billing company has genuine specialty expertise. Anesthesia is the clearest example: specialized anesthesia billing services report sub-2 percent denial rates, while generalist systems land at 12 to 18 percent, primarily because the ASA formula and concurrency modifier logic are handled systematically versus inconsistently. The OIG's finding that 82 percent of Medicare chiropractic claims reviewed were disallowed suggests that generalist billing of chiropractic without specialist modifier and documentation knowledge creates systematic denial exposure. Billing companies evaluating whether their denial rates justify their specialty claims can compare client denial rates against the specialty benchmarks in this report. If a billing company's chiropractic clients are running at 15 percent denials, the benchmark is a starting point for diagnosing whether the problem is practice-side documentation or billing-side modifier management.