RCM Software to Reduce Claim Denials (2026)

Short answer

The average initial claim denial rate across U.S. medical practices was 11.8 percent in 2024, up from 10.2 percent a few years earlier, per the MGMA 2024 Cost and Revenue Report. Per the Experian Health 2025 State of Claims survey, 41 percent of providers now see denial rates of 10 percent or higher. That revenue does not disappear automatically — Change Healthcare's 2024 data found that up to 65 percent of denied claims are never resubmitted, which means the problem for most billing companies is not just that denials happen, but that denials go unworked.

Revenue cycle management software reduces claim denials in two ways: upstream, by catching errors before submission through scrubbing, eligibility verification, and authorization tracking; and downstream, by organizing the denials that arrive so a billing team can actually work them. Enterprise platforms like Waystar focus heavily on the upstream side, using AI to predict which claims a payer will deny before submission. Billing companies working a book of client practices often have a different problem: denials arrive from many clients at once, no single queue surfaces them, and CARC and RARC codes are buried in payer remittance text that takes time to interpret correctly.

Medi is built for the billing company side of that equation. It does not predict denials before submission the way Waystar's AltitudeAI does. It organizes the denials you receive — surfacing them in one cross-practice queue, translating the codes, attaching follow-up ownership to the original claim, flagging underpayments, and rolling up denial trends across your whole client book. If your denial problem is that denials go unworked or untracked across clients, that is what this page covers.

Sources: MGMA 2024 Cost and Revenue Report · Experian Health 2025 State of Claims · MDaudit 2025 Benchmark Report

Where denials leak for a billing company

A billing company managing eight or twelve or thirty client practices faces denial leakage from several directions that a single-practice billing department simply does not encounter. The environment makes each of these worse: commercial plan denial rates rose roughly 1.5 percent year over year between 2023 and 2024, per Experian, and Medicare Advantage denial rates spiked 4.8 percent in the same period, now topping 17 percent.

Cross-practice blind spots

When each client practice lives in its own system, denials arrive in separate inboxes, separate worklists, and separate logins. A payer that quietly begins denying CO-50 medical necessity claims across three of your clients shows up as three unrelated items, not one pattern. By the time the pattern is visible, the filing windows for the earliest denials may already be tight. A billing company cannot manage denial rates it cannot see across the whole book at once.

CARC and RARC codes that do not translate themselves

The 835 ERA carries payer denial reasons as paired CARC (Claim Adjustment Reason Code) and RARC (Remittance Advice Remark Code) codes maintained by X12. CO-197 means authorization is absent. CO-16 paired with MA13 means the rendering provider NPI is missing. PR-1 means patient deductible, which is not an appeal at all, it belongs on the patient statement workflow. A biller reading raw payer text spends minutes per claim on interpretation that should take seconds. Multiply that across a book of clients and it is a material drag on throughput.

No follow-up ownership attached to the claim

Denied claims without an assigned owner and a next-action date slip into a spreadsheet or a task list that lives separately from the claim itself. When a biller follows up on a CO-29 timely filing denial two weeks later, they have to reconstruct the claim context from scratch. When a manager wants to know which denied claims are past the appeal deadline, there is no answer without exporting and cross-referencing. Denial follow-up that does not live on the claim record does not stay current.

Missed underpayments

Not every underpayment arrives as an explicit denial code. CO-45 (charge exceeds fee schedule) is technically a contractual adjustment. When a payer consistently pays less than the contracted rate, it shows up as a series of CO-45 lines that look like normal contractual write-offs unless someone compares the payment against the fee schedule for that specific payer and contract. Billing companies without underpayment detection built into the posting workflow write off recoverable revenue every ERA cycle.

How Medi reduces denial leakage

One cross-practice denial queue

Every denial that arrives on an 835 ERA across all client practices lands in a single operator view. A billing company can filter by CARC, by payer, by practice, by dollar value, by age, and by owner. A payer that starts denying a code shows up as a pattern in the same session it starts. Denial work does not require logging into separate client instances or exporting data to see the full picture.

CARC and RARC translated in plain language

Medi renders the CARC and RARC pair in plain English next to the raw code. A biller reads "authorization is absent — retro-authorization or appeal required" rather than CO-197 with no context. PR-group codes (PR-1 deductible, PR-2 coinsurance, PR-3 copay) are flagged as patient responsibility rather than sitting in the appeal queue. CO-16 surfaces the paired RARC so the biller sees what is actually missing before they attempt a correction and resubmission. The denial management workflow guide covers the full CARC reference and the routing logic for each group code.

Follow-up attached to the claim

Each denied claim carries an owner, a next-action date, and a follow-up history. When a biller opens a denial, they see the ERA line, the claim, the prior follow-up attempts, and the appeal deadline calculated from the denial date, in one place. Managers see aging by appeal deadline across the whole book rather than guessing at status from a separate spreadsheet. Recovery outcomes, whether the claim was resubmitted and paid, appealed and overturned, or written off, are logged against the original denial record.

Underpayment detection

Medi compares each ERA payment against the contracted fee schedule for the specific payer. Persistent underpayments on CO-45 lines, or payments that fall short of the contracted rate without a denial code attached, surface as underpayment flags rather than silent contractual write-offs. The full workflow is in the underpayment detection guide.

A/R visibility across the book

Denial aging, open balances, and A/R by payer roll up across all client practices in aggregate and by individual client. A billing company can answer what its overall denial rate is, which payers are driving the most denial dollar volume, and which client practices are above the specialty benchmark, without leaving the platform. For denial-rate context by specialty, the denial-rate benchmark covers the MGMA and Experian data in full.

What Medi is and is not

Medi works the denials you receive. It does not predict which claims a payer will deny before you submit them.

Enterprise denial-prediction platforms, Waystar's AltitudeAI is the clearest example, use AI to score claims before submission, flag likely denials, and in some cases draft appeals automatically. That capability is real and valuable at hospital and large-group volume, where the contract economics and the claim count justify it. For a billing company with a book of smaller physician practices, the question is usually whether the per-claim economics and the multi-year contract terms fit. Often they do not.

Medi's positioning is downstream from prediction: translate the codes, queue the work, attach the follow-up, catch the underpayments, surface the patterns. It is a billing-company operating surface, not an enterprise analytics product. The best claim denial management software for billing companies roundup covers the full vendor landscape across both categories, including where enterprise platforms genuinely win.

What Medi does not claim:

• Denial elimination
• Recovery guarantees on any denial category
• Automatic appeal generation without human review
• Universal payer rule coverage (payer rules change faster than any vendor can reliably track)
• Denial prediction before submission

Frequently asked questions

What is the difference between denial prevention and denial management?

Denial prevention happens before a claim is submitted: scrubbing for coding errors, verifying eligibility, confirming authorization, and fixing rejections that arrive on the 277CA before the claim ever reaches adjudication. Denial management happens after adjudication: working the denials that arrive on the 835 ERA, translating CARC and RARC codes, routing PR-group lines to patient billing, building appeal packets for CO-group lines, and tracking recovery outcomes. Most billing companies need both. Clearinghouses like Office Ally handle front-end rejections. Platforms like Medi handle the posted denials. Enterprise platforms like Waystar operate across both layers at hospital scale, with denial prediction added to the front end.

Can software reduce denial rates across multiple client practices?

Yes, specifically by doing two things: catching front-end errors before submission through scrubbing and eligibility checking, and making sure denials that do arrive actually get worked before appeal deadlines pass. Change Healthcare's 2024 data shows that up to 65 percent of denied claims are never resubmitted, which means a large portion of the denial-rate problem is a workflow problem rather than a payer problem. Software that puts all denials in one queue, translates the codes, and attaches follow-up ownership makes it harder for denials to slip through unworked. It does not prevent payers from denying claims, but it reduces the share of denials that silently become write-offs.

Why does Medicare Advantage have such high denial rates?

Medicare Advantage plans are administered by private insurers who set their own prior authorization requirements and medical-necessity criteria within CMS guidelines, rather than following the uniform federal rules that govern traditional Medicare. The result is a prior authorization environment that varies by plan and has grown more restrictive each year. Experian found that MA denial rates spiked 4.8 percent year over year and now top 17 percent, more than double traditional Medicare's rate. MDaudit found the average denied MA claim amount rose 22.4 percent to roughly $1,000 in 2025. For billing companies with a high Medicare Advantage patient mix, tracking MA-specific denial patterns separately from commercial and traditional Medicare denials is the starting point for identifying which plans drive disproportionate volume. The denial-rate benchmark has the full MA data and specialty breakdown.

How does Medi price denial management?

Denial management is part of the base platform, not a separate module or add-on. Medi is $20 per client practice per month, with graduated volume discounts: 26 to 50 practices at $15 each and 51 and above at $10. There is no per-provider fee, so a client practice with ten providers costs the same as one with a single provider. There is no contract. Per-transaction EDI usage is billed separately at published rates. The full schedule is at /pricing. Platforms that bundle denial management into a per-provider seat, like AdvancedMD, price the same work by how many providers your clients employ; that model scales with client headcount rather than client count.

Which CARC codes drive the most denial volume in 2026?

Across specialties, CO-16 (missing or incomplete claim information), CO-197 (authorization absent), CO-50 (not medically necessary), CO-97 (bundling), CO-22 (coordination of benefits), and CO-29 (timely filing expired) account for a large share of denial volume. CO-4 (modifier inconsistent with procedure code) is the leading code in modifier-intensive specialties: anesthesia, chiropractic, physical therapy, and orthopedics. The Optum 2024 Denials Index found that provider eligibility issues and authorization or pre-certification problems were the top two denial categories by volume. The denial management workflow guide covers the investigation steps and routing logic for each of the high-volume codes.

Does Medi have a free trial or demo?

Medi offers a live demo with a billing company focus, meaning the demo covers the cross-practice denial queue, CARC and RARC translation, follow-up assignment, and the underpayment detection workflow rather than a generic feature walkthrough. Pricing and volume discount modeling are at /pricing.

A note on the pricing figures here

The pricing shown for other vendors is gathered from their public pricing pages where they publish one, and from third-party aggregators, reseller materials, and customer reports where they do not. Many of these vendors do not publish their pricing, so these figures are approximate, may not reflect negotiated or current rates, and can change without notice. Treat them as a starting point and confirm current pricing with each vendor directly. Where a vendor does not publish its pricing, this page says so rather than presenting an estimate as fact. Medi's own pricing is published in full at /pricing.

Sources: MGMA 2024 Cost and Revenue Report · Experian Health 2025 State of Claims · MDaudit 2025 Benchmark Report · HFMA Denials Management · X12 CARC Code List · Change Healthcare 2024