Why Initial vs. Final Denial Rate Determines Your RCM Strategy
Thomasina Wilkins draws a distinction that shapes everything about how organizations set denial prevention goals: initial denial rate vs. final denial rate. Initial denial rate is the diagnostic, showing current performance and what work remains. Final denial rate is the benchmark goal, and from a conservative industry perspective she puts the target at 4%. Expecting that as a first-time starting point is unrealistic: payer behavior cannot be perfectly predicted and medical necessity gaps take time to close. Her approach is to benchmark against like facilities (academic vs. specialty clinic, same geographic market) and then sort denials between preventable and non-preventable. Preventable denials are the high-priority targets for day-to-day process improvement at the time of service.
Key Takeaway
Initial and final denial rates measure different things and drive different strategies. Final denial rate is the benchmark target. Initial denial rate is the diagnostic that reveals what preventable work remains. Sorting denials between preventable and non-preventable and prioritizing prevention at the time of service is how organizations close the gap between the two.
“4% is ideal for final denials, but it is not a reasonable denial rate to expect on your first time out the gate. Your goal should be to look at what your performance is now, then gauge what benchmark you want to get to later.”
Thomasina Wilkins, Chief Revenue Officer, Sinai Chicago
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