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 a few years earlier, per the MGMA 2024 Cost and Revenue Report. The average hides wide variance by specialty. Behavioral health runs 20 to 30 percent on authorization intensity and parity law complexity. Orthopedic surgery and anesthesia with prior-authorization-heavy payer mixes land at 14 to 22 percent. Chiropractic and physical therapy sit at 15 to 20 percent when Medicare modifier logic breaks down. Primary care and internal medicine sit at 8 to 12 percent. Per the Experian Health 2025 State of Claims survey, 41 percent of providers now see denial rates of 10 percent or higher, up 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. Per MDaudit's 2025 Benchmark Report, average denied amounts rose 14 percent for outpatient claims and 12 percent for inpatient, so financial exposure per denial is growing faster than denial volume. A book above 10 percent initial denials is 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 environment is intensifying, with no sign of reversal as of mid-2026.

In 2022, about 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, now in its third year and drawing on 250 healthcare professionals, that figure had risen to 41 percent. Each wave found a larger share of providers above what HFMA considers the acceptable threshold.

The MGMA benchmarks tell the same story at the practice level. The 10.2 percent average initial denial rate of the mid-2020 period moved to 11.8 percent by the 2024 data cycle. That 1.6 percentage point shift compresses margins: the labor cost of working a denial (investigation, correction, resubmission, appeal) is largely fixed per denial, so more denials on the same staff is 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 over the same period. The HFMA has documented some not-for-profit health systems exiting Medicare Advantage contracts entirely, a measure of how burdensome MA denials have become for organizations without 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 volume-only data misses. The average denied amount for outpatient claims rose from $4,730 to $5,390 (14 percent). Inpatient moved from $504 to $565 (12 percent). External payer audit at-risk amounts grew 30 percent year over year per customer. Telehealth-related denials rose 84 percent in dollar terms. Outpatient coding-related denials rose 26 percent. Payer behavior is escalating, not holding steady under process optimization.

The HFMA Pulse Survey finds hospitals lose an average of 4.8 percent of net revenue to denials. For physician practices and billing companies the percentage varies with specialty mix, payer contract structure, and denial workflow maturity, but the directional pressure is the same.

The headline numbers from MGMA and Experian

These are the most widely cited public benchmarks for professional practice denial rates. Their methodologies differ: MGMA surveys physician practices and management groups, Experian surveys revenue cycle professionals. Read together, they give a fuller picture than either alone.

The 65 percent resubmission gap from Change Healthcare's 2024 data anchors any denial ROI conversation. An 11.8 percent initial denial rate becomes a permanent write-off if two-thirds of those denials never get worked. The recoverable share of initial denials, often cited at 60 to 90 percent depending on category, is only recoverable if someone works it inside 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.

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 held mental health claims to tighter medical-necessity standards than 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 pattern needs 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 adjacent but distinct denial territory. Both face unforgiving Medicare modifier logic: one missing AT on a Medicare chiropractic claim is an automatic denial, and one missing KX once a patient crosses the $2,480 therapy cap does the same for PT. The OIG found 82 percent of Medicare chiropractic payments reviewed were disallowed, almost entirely because maintenance visits were billed as active treatment. That is a systemic documentation and modifier gap, not an edge case. See the chiropractic and PT billing companies guide for the modifier detail.

Anesthesia denial rates are 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 on generalist software or non-specialist billing companies land at 12 to 18 percent 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 podiatry ASC claim denial rates around 16 to 17 percent in 2024 data, 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 warrants separate treatment in a 2026 benchmark because its behavior has diverged sharply from traditional Medicare and commercial plans.

Traditional Medicare processes claims under a fairly predictable rule set: mandatory timely filing windows, established prior authorization requirements, and an appeals process governed by federal regulation. Medicare Advantage plans run on different rules because private insurers administer them under contract with CMS to deliver the Medicare benefit. Those insurers set their own prior authorization requirements, medical-necessity criteria, and appeals procedures, subject to CMS oversight that has historically been light.

The result is a steadily more restrictive prior authorization environment. KFF reported Medicare Advantage insurers made nearly 53 million prior authorization determinations in 2024. Experian found 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. MDaudit found 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 with patient demographics. Practices with a Medicare-age mix (orthopedics, cardiology, podiatry, primary care, anesthesia for surgical specialties) carry the highest MA exposure. Behavioral health practices serving elderly populations face both high MA volume and high inherent denial rates. Chiropractic Medicare revenue is already complex from the active-versus-maintenance distinction, and MA plan variance on top forces tracking each plan's specific rules separately.

The MA denial spike has shown several payer-level patterns. Prior authorization has expanded into previously exempt categories, especially advanced imaging, specialty referrals, and outpatient procedures. Medical-necessity criteria have tightened, and the documentation needed to support an appeal has grown. Concurrent review for inpatient admissions has become more aggressive, with step-down denials generating significant administrative burden.

For a billing company managing a high-MA book, the response is treating MA prior authorizations with the same rigor as commercial managed care, not assuming the Medicare-familiarity heuristic applies. Tracking MA-specific denial patterns separately from commercial and traditional Medicare identifies which MA plans drive disproportionate denial volume, the starting point for contract negotiation.

Top CARC codes driving denials in 2026

These codes account for the majority of denial volume across specialties, based on X12 code utilization data, payer clearinghouse reporting, and specialty billing analyses. Each pairs with a two-letter Group Code that sets 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 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. 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 responsible party. A well-built denial triage system separates CO-group appeals from PR-group patient billing automatically, at intake.

CO-16 is where the paired RARC does the real work. CO-16 alone 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. Acting on 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 behind behavioral health denials: authorization absent, not just incorrect. In behavioral health the pattern is often a failed concurrent review during an extended treatment episode rather than a failure to obtain the initial authorization. The fix is tracking concurrent review expiration dates prospectively, not reacting 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 rate persistently above 15 percent signals something structural, and the denial mix usually identifies where.

Authorization failures concentrated in CO-197 and CO-198 point to a broken prior authorization workflow: authorizations not obtained before service, concurrent reviews expiring unnoticed, or authorization numbers not passed from the clinical side to billing before 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 a coder training gap or a billing system that does not enforce modifier logic at claim creation. Anesthesia, chiropractic, and PT modifier rules are dense enough that relying on individual coder recall produces 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 sitting in a queue, a hold, or an error state long enough for the 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 on a Medicare claim means a submission process so slow that a full year elapsed. That is not a payer problem.

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

Medical necessity denials concentrated in CO-50 in behavioral health often carry a parity law dimension. If the payer would cover an equivalent physical health service under the same clinical criteria but applies a stricter standard to the mental health claim, that is a MHPAEA violation, and the appeal pathway is regulatory, not clinical. Billing staff who route every CO-50 the same way regardless of specialty miss it.

Final write-off rates, the share of denied revenue 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 on denials specifically (not total write-offs) need a higher initial clean-claim rate, a better appeal success rate, or both.

How billing companies use these benchmarks

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

Onboarding diagnostics. When a new practice client comes on, the initial denial rate (pulled from ERA history or the incoming system) sets a baseline. Comparing it to specialty-specific benchmarks tells the billing company whether the rate is a practice-specific problem or a specialty norm. A behavioral health practice at 25 percent is not out of line. A primary care practice at 25 percent has a serious operational problem to identify and document before accepting revenue guarantees.

Internal SLA targets. Billing companies need specialty-specific denial SLAs, not a single cross-specialty threshold. A 5 percent target across all specialties is impossible for a behavioral health book and loose for a primary care book. Setting targets at the specialty level against the MGMA and Experian benchmarks gives the operations team a realistic, credible standard.

Competitive positioning. When pitching a prospective client doing billing in-house, "what denial rate should I expect?" gets a benchmark-backed answer. A behavioral health practice at 28 percent initial denials, pitched a 20 percent target the billing company has hit with comparable clients, has a specific number to evaluate instead of a general claim about expertise.

The billing company software evaluation guide covers how to assess whether a platform supports denial management at the level these benchmarks require. The billing company operations hub gives the full workflow context. 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 captures 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 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 a well-managed revenue cycle, and high-functioning practices often run 2 to 4 percent on initial denials. Most practices are not at 5 percent: MGMA reports an average of 11.8 percent, and 41 percent of providers exceed 10 percent. A better frame than "good" is whether your rate is above or below the specialty benchmark. A behavioral health practice at 22 percent is tracking with peers; 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, while traditional Medicare's rules are federal and apply uniformly. MA plans have used that flexibility to expand prior authorization, tighten medical-necessity standards, and impose concurrent review that traditional Medicare does not have. The result is a denial process that is more complex, more variable across plans, and more burdensome to manage. 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 category. Authorization and timely-filing denials recover at high rates when the billing team works them promptly, often 80 to 90 percent corrected and resubmitted successfully. Medical-necessity denials recover at lower rates because they need clinical documentation support and often go to formal appeal. Coding errors are generally correctable if caught within the filing window. HFMA's 2 to 5 percent of net patient revenue as an acceptable write-off rate implies the rest of the denied revenue, potentially 60 to 80 percent of initial denials, should be recoverable with a functioning workflow. Change Healthcare's finding that up to 65 percent of denied claims are never resubmitted shows how far the actual recovery rate falls below the theoretical one 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, from sub-2 percent with specialized billing to 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 falling count of denied claims is not progress if the average denied amount is rising, which MDaudit's 2025 data shows is happening industry-wide. 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 defines these metrics so benchmarking is meaningful across organizations. Tracking denial rate without tracking what happens to the denied claims (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 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 rates require tracking claims through their complete lifecycle, which most organizations do not do systematically. For a billing company managing client accounts, the gap 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 case: specialized anesthesia billing services report sub-2 percent denial rates while generalist systems land at 12 to 18 percent, mainly because the ASA formula and concurrency modifier logic are handled systematically rather than inconsistently. The OIG's finding that 82 percent of Medicare chiropractic claims reviewed were disallowed shows that generalist chiropractic billing without specialist modifier and documentation knowledge creates systematic denial exposure. Billing companies can test whether their denial rates justify their specialty claims by comparing client rates against the specialty benchmarks in this report. If a billing company's chiropractic clients run 15 percent denials, the benchmark is a starting point for diagnosing whether the problem is practice-side documentation or billing-side modifier management.