Payers are delaying billions of dollars in payments by increasingly using requests for more information to initially deny claims from health systems and medical practices, according to a report from Kodiak Solutions.
As a percentage of total billed charges, the denial rate from initial requests for information increased by almost 9% from 2022 to 2024, according to an Aug. 8 news release from Kodiak. The company's revenue cycle analytics software monitors patient financial transactions from more than 1,900 hospitals and 250,000 physicians nationwide.
The rate for 2024 covers the first five months of the year, according to the report. Over that period, $6 billion in claims were delayed. Over an entire year, that would be $14.4 billion, up from $11 billion in 2022.
Kodiak said that the initial denials are not a sign that payers are receiving more bad claims. In 2023, about 88% of the total billed charges for RFI denials were ultimately paid by insurers. That's a 35% increase from 2022.
"Our analysis suggests that health insurers are using RFI denials to simply slow down claims that they ultimately will pay, just to reap the benefits of paying more slowly," Kodiak's Senior Vice President of Revenue Cycle Colleen Hall said in the release. "Health systems and medical practices have to pay the expenses related to these claims, such as wages and benefits to clinical staff, well before they are paid for the care they delivered, in addition to the added costs to fulfill those information requests."
Traditional Medicaid had the highest initial RFI claim denial rate through the first five months of 2024 at 9.23%, followed by commercial payers at 8.14%, according to the report. Traditional Medicare had the lowest rate at 0.46%.
Read the full report here.