Claims Appeals: How Providers Can Recover More Denied Revenue

For years, when denial rates sat below 10%, many provider organizations treated them as a cost of doing business. That mindset explains a number that still holds true today. About half to two-thirds of denied claims are never reworked or appealed, according to long-standing HFMA estimates. The money simply gets written off.

That way of operating doesn't work anymore. KFF's analysis of federal transparency data found that Marketplace payers denied 19% of in-network claims in 2024, a rate that has hovered around one in five for several years running. Denials are also coming in faster and getting more complicated than most revenue teams can handle. That’s why more provider organizations are starting to use automation to keep up with their appeals.

The encouraging part is that appeals are far more successful than most people think. A survey of hospitals and health systems found that more than half of denied claims are eventually overturned and paid. The appeal letter is key to this process, and generative AI can now create denial-specific letters in seconds instead of the hours it used to take staff. Providers who update their appeals process can recover significant revenue that might otherwise be lost.

What are claims appeals?

A claim appeal is a formal request asking a payer to take another look and change a previous decision, such as a refusal to pay, a reduced payment, or a denial of authorization for a medical service. Providers or patients usually begin with an internal appeal directly to the payer. If the denial is upheld, they can request an external review by an independent third party, which means the payer no longer has the final say.

Every denied dollar stays lost until someone successfully contests it. A clear, organized appeals process, especially one that uses automation, helps healthcare organizations get that money back, speed up payments, and protect their already tight margins.

4 ways claims appeals are changing

1. AI platforms draft appeal letters

AI-powered platforms now assemble payer-specific appeal letters in seconds, shrinking what used to take hours of staff effort down to minutes and cutting turnaround from weeks to days. The category has matured noticeably over the past two years.

An overwhelming majority of providers plan to invest in AI that reduces administrative waste, improves operational efficiency, and smooths their interactions with payers.

2. Revenue optimization software brings denials into view

Provider organizations often struggle just to get a clear picture of their denials in the first place. Revenue optimization software solves that by capturing every denial, underpayment, and reversal, then presenting them in sortable, drillable visualizations that turn raw remittance data into actionable worklists.

With that visibility in place, teams can quickly sort claims by dollar amount, payer, or denial reason to focus on the most important ones instead of digging through scattered reports. A shared, real-time view keeps everyone accountable by showing which claims are assigned, in progress, or resolved. This cuts down on duplicate effort and appeals that slip through the cracks. Side-by-side comparisons for denial reason, procedure code, and registration data make it easier to spot root causes. Batch actions speed cash recovery, and aggregated, line-level evidence of payer behavior gives finance leaders solid data to bring to contract negotiations.

MD Clarity's RevFind is designed for this level of detection. It simulates payer adjudication at the charge level and compares every payment against contracted rates as remittances come in. It also flags underpayments and denials before they age out of the appeal window.

Digitized contracts strengthen appeals well beyond detection. When every clause and rate is searchable, staff can pull the exact paragraph that guarantees a procedure rate or a timely-payment clause and drop it straight into an appeal letter, instead of hunting through email threads or outdated binders.

3. Predictive scoring focuses effort where it pays

Not every denial is worth the same effort; machine learning is getting better at telling teams where to spend their time. Predictive models score each denial by its likelihood of being overturned and surface the high-value cases for review. This way, your teams aren't buried under low-probability work.

These models learn from historical denial and appeal outcomes, picking up on the patterns that tend to predict success with a given payer or denial type. As more claims move through the system, the scoring sharpens, and teams can route the strongest opportunities to the right people while setting aside the cases that rarely pay off. The result is a more disciplined use of limited staff time, with fewer hours spent on appeals that were never going to land and more attention on the denials that will impact net revenue.

4. Digital-first appeals are becoming the norm

Major payers are steadily moving their appeals processes online, and providers need to keep pace. UnitedHealthcare has spent the past few years phasing in electronic-only appeals and reconsiderations across its commercial, Medicare Advantage, and Medicaid lines, rolling the requirement out state by state through 2024 and 2025. Today most network providers serving those plans are expected to file reconsiderations and pre- and post-service appeals digitally, either through the provider portal or an API connection. Other large payers are following similar paths, and federal rules are pushing the broader prior authorization process toward standardized electronic exchange as well, so any team still relying on paper and fax should plan to shift those workflows to electronic submission.

Staying ahead of changing payer requirements

The rules are also being reshaped from the regulatory side, mostly in providers' favor. The CMS prior authorization rule began taking effect in January 2026, requiring Medicare Advantage, Medicaid, CHIP, and Marketplace plans to decide standard prior authorization requests within seven calefndar days and urgent ones within 72 hours. Payers must also give a specific reason whenever they deny a request. By 2027 those payers must also publicly report metrics such as how often their denials get overturned on appeal, which gives revenue cycle teams a clearer benchmark than they have ever had. Separately, in June 2025 more than fifty payers, including UnitedHealthcare, Aetna, Cigna, Humana, Elevance, and the Blue Cross Blue Shield plans, pledged to narrow the scope of prior authorization and explain denials and appeal options more clearly. Progress has been modest so far, with payers reporting roughly an 11% reduction in prior authorizations by early 2026. Only about one in three physicians say they trust the commitments. Thus, it’s still worth it to check payer behavior against your own data rather than assuming the burden has eased.

Following each payer’s documentation, formatting, and filing deadlines requires quick action and careful record-keeping from staff who are already stretched thin. When a detail is missed, the appeal slows down and mistakes happen. 

A few of these best practices can make the process much easier to manage.

• Start by building a single, searchable payer rulebook that lists each major payer's appeal instructions, required attachments, time limits, and contact paths. This will help your staff find authoritative guidance in seconds. 
• Create modular appeal templates. Develop core letter and packet formats for the most common denial categories, then drop in payer-specific language and patient details instead of starting from scratch each time.
• Use denial-management software with payer logic. Modern platforms store rule sets, pre-populate forms, flag missing items, and even suggest persuasive wording tailored to the denial code and insurer.
• Assign someone to monitor payer changes, refresh the rulebook, and deliver short, regular updates to the appeals team, which keeps errors rooted in outdated guidance from creeping in. PayerMonitor makes this easier by tracking changes to payer contracts, amendments, and fee schedules in one place.
• Schedule ongoing policy sweeps and micro-trainings. Assign someone to monitor payer bulletins, refresh the rulebook, and deliver short, regular updates to the appeals team to prevent errors rooted in outdated guidance and to keep first-pass claim accuracy high.

Together these steps can turn a chaotic, error-prone process into a disciplined workflow that recaptures revenue without exhausting your billing and clinical teams.

Recovery services as an extension of your team

Good software breaks down your reimbursement data into the insights you need, but those insights only turn into revenue when someone has time to act on them. If your staff can’t get on the phone with payers or submit through their portals, those appeal chances quietly slip away.

MD Clarity's Recovery Services work as an extension of your revenue cycle team, taking on the parts of the appeals process that consume the most staff time. The reimbursement specialists put together appeal packets, use the exact contract details RevFind surfaces, and attach the necessary clinical or coding documents. They support your team by submitting appeals through payer portals, following up by phone or email when needed, and handling direct negotiations or working with legal counsel when it makes sense. They also track every status update in the software so you always know what’s happening. The analytics find the opportunities, and experienced specialists go after them without adding to your team’s workload.

Stop leaving recoverable revenue on the table. Schedule a demo to see how RevFind surfaces the opportunities and our specialists pursue them.