Stopping the Revenue Leaks: Part 2 – Denials
- Cale Queen
- Oct 26
- 3 min read
You built your clinic to care for patients, not to wrestle with insurance companies. Yet for many practices, denials are one of the most frustrating and costly sources of lost revenue.
From our analysis of the 2023 CMS Medicare data for Tennessee, we found that clinics experienced an average 31% gross write-off rate. While some of this reflects standard contractual adjustments, the wide variation between clinicians points to preventable causes — coding mismatches, missing documentation, eligibility errors, and prior authorization failures.
On average, small one- to two-clinician practices bill $1.5–$2 million per year, while specialty clinics often generate more. At those revenue levels, a 31% gross write-off rate means that hundreds of thousands of dollars in charges never convert to cash flow — losses that could often be reduced.
Why Denials Happen
Most denials don’t reflect poor clinical care. They happen because of operational gaps:
Eligibility not verified (CO-16)
Diagnosis/procedure mismatches (CO-11)
Missing or late prior authorizations
Filing outside payer deadlines
Lack of real-time monitoring
Not All “Contractuals” Are Equal
It’s a mistake to assume every dollar in the “contractual write-off” bucket is untouchable. A peer-reviewed study in Plastic and Reconstructive Surgery Global Open found that many providers leave significant amounts of money on the table by failing to manage their revenue cycle with discipline. (PMC11219169) Eligibility errors, downcoding, and missed authorizations often get hidden inside contractuals, yet they are preventable.
For a clinic billing $2 million annually, reclaiming even 2–3% from this hidden leakage equals $40,000–$60,000 — real money that can be used to hire staff, invest in technology, or improve patient services. The evidence is clear: clinics should be examining their contractuals, not writing them off as inevitable.
What “Right” Looks Like
(Based on MGMA, HFMA, CMS benchmarks)
Denial Rate: ≤10%
First-Pass Resolution: ≥90%
Days in A/R: <40
Practical Fixes That Work
At TriStar BI, we use Business Intelligence (BI) and proven playbooks to uncover and fix denial leaks:
Eligibility checks at scheduling
Provider query workflows
Prior authorization tracking
Denial dashboards
Appeals discipline
Even a modest reduction in denials can mean big savings. Lowering the denial rate from 12% to 8% on $2 million in charges would recover about $80,000 annually. For specialty practices, the gains are even larger.
The Stakes
If nothing changes:
Nearly a third of billed revenue may continue to be written off.
Six figures in losses repeat year after year.
Staff frustration grows as they chase preventable denials.
If you act:
Denials drop toward benchmark levels.
More claims get paid the first time.
Business Intelligence quickly pays for itself, often within months.
The Transformation
You don’t need a large hospital billing team to control denials. With TriStar BI, you get:
Visibility into where denials originate.
Dashboards and workflows staff can actually use.
Confidence that you’re getting paid for the care you provide.
Ready to See the Impact?
Stop the denials. Protect your revenue.👉 Schedule a free consultation
Or choose our Lunch & Learn option:👉 Schedule a free “Lunch & Learn” with TriStar BI
We’ll bring lunch from Panera or a similar restaurant to your clinic and meet with you, your business manager, and billing manager. This is a no-obligation, educational session for your leadership team to review:
How Business Intelligence (BI) can help you identify where revenue is leaking from denials
How BI can support small, targeted fixes that recover thousands annually
Why BI dashboards outperform the off-the-shelf dashboards built into most IT systems
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