Claims Denial Rate (Medical/Health)

Claims Denial Rate (Medical/Health)

KPI Details

Health Insurance Claims Denial Rate measures the percentage of medical claims submitted by insurance policyholders, or members, that are denied by the insurance company. A higher than desired rate of denied medical claims can greatly diminish customer service levels, lead to rework and reduced capacity within the claims function, and may lead to costly disputes with healthcare providers (e.g., doctors, hospitals, etc.). Poor inbound claims data (submitted by healthcare providers) is a common reason for claims denials. Missing claim information (e.g., no social security number, missing billing modifier, no plan code, etc.), duplicate claims submissions, and out-of-date submissions (i.e., claim not filed within required timeframe) can all trigger claims denials and cause significant rework on both ends (i.e., for the insurance company and healthcare provider).

KPI Definition

The number of medical/health insurance claims filed by policyholders that are denied by the insurance company divided by the total number of medical/health claims processed by the payer over the same period of time, as a percentage.

KPI Calculation Instructions Claims Denial Rate (Medical/Health)?

Two numbers are used to calculate this KPI: (1) the number of claims submitted to the insurance company that are denied, and (2) the total number of claims processed by the health insurance company over the same period of time. A claims denial is considered any instance where the insurance company, or payer, refuses to honor the request by an individual (or his/her healthcare provider) to pay for medical services obtained from a healthcare professional. Include both hard (denials that cannot be reversed) and soft (denials that can be reversed by re-sending various claims information) denials in this calculation. The denominator for this calculation should include all claims submitted to the health insurance company for payment (both approved and denied) during the measurement period.

KPI Formula :

(Number of Medical Claims Denials / Total Number of Medical Claims Adjudicated) * 100