Stop Writing Claims Off: Why Strategic Follow Up Matters
One of the most persistent sources of financial leakage in healthcare is not the denial itself, but what happens after a claim denies. Too often, claims are written off after an initial denial or a single appeal, not because they are truly non-payable, but because time, staffing constraints, or system limitations make continued follow-up difficult.
Industry data shows this is not a marginal issue. Commercial insurers deny roughly 15–20 percent of in-network claims on average. What is more striking is what follows: a large share of denied or returned claims are never appealed or resubmitted, even though many are recoverable. Multiple industry analyses estimate that more than half of denied claims that are appealed are ultimately overturned and paid, often only after second-level appeal or reconsideration. For hospitals and physician organizations, unresolved denials have been shown to represent millions of dollars in annual lost revenue, in some cases approaching five percent of net patient revenue.
The conclusion is not that providers should appeal everything. It is that first-level denials frequently do not represent a final or accurate adjudication. Many reflect configuration errors, bundling logic, missing carve-outs, administrative processing failures, or policy misapplication. In practice, a meaningful number of claims are only resolved after additional review and escalation.
Organizations that stop after the first appeal often unintentionally normalize payer behavior that relies on provider fatigue. Over time, this dynamic shifts financial risk to providers, embeds payer errors into future claims processing, and increases administrative burden rather than reducing it.
Effective follow-through is not confrontational. It is operational discipline. High-performing revenue cycle teams rely on a structured escalation pathway that allows claims to move forward deliberately and consistently when warranted.
A disciplined internal escalation framework typically includes:
Rapid correction and resubmission when claims are returned or processed incorrectly
First-level appeal supported by policy language, clinical documentation, and contract terms
Second-level appeal or reconsideration when issues persist, incorporating prior outcomes and trend data
Peer-to-peer or medical director review when medical necessity is cited
Contractual escalation to provider relations or network leadership for repeated issues such as downcoding, bundling conflicts, configuration errors, or failure to honor negotiated carve-outs
Timely payment escalation when statutory or contractual payment timelines are exceeded
When applied consistently, this framework reduces arbitrary write-offs and creates accountability on both sides of the transaction.
There are also circumstances where escalation beyond the payer is appropriate. When internal remedies are exhausted and issues remain systemic, external escalation becomes part of responsible governance rather than an adversarial act.
External escalation pathways may include:
State insurance regulators for state-regulated commercial plans, particularly for timely payment violations, administrative barriers, or recurring processing failures
Federal oversight channels for ERISA-governed self-funded plans when plan terms are not being followed
Formal federal dispute resolution processes when applicable, such as those established under the No Surprises Act
Constituent services offices, which can assist in routing unresolved, systemic issues to the appropriate regulatory or oversight agency when access or compliance concerns persist
The financial impact of not following through is significant, but the operational impact is equally important. When claims are written off prematurely, revenue is lost, denial trends go undocumented, payer misconfigurations persist, and provider leverage erodes. Over time, this affects not only margins, but access—particularly for routine, diagnostic, and community-based services that depend on predictable reimbursement to remain viable.
Strong revenue cycle management is not defined by aggressiveness. It is defined by consistency, documentation, and follow-through. Write-offs should reflect true non-recoverables, not exhaustion.
In today’s payment environment, disciplined escalation is no longer optional. It is a core competency for providers who want to remain stable, compliant, and sustainable.
External links for additional reading:
Claims Adjudication Costs Providers $25.7 Billion - $18 Billion is Potentially Unnecessary Expense
Claims Denials and Appeals in ACA Marketplace Plans in 2023 | KFF
