Medical Billing Services Ranked by Claim Denial Rates

When providers come to me frustrated about their revenue cycle, it almost always comes back to one issue: claim denials. Denials are where so much lost revenue hides. Even a small increase in your denial rate can mean thousands—or even hundreds of thousands—of dollars in uncollected income each year.

I’m Amanda Anderson, owner of a medical billing company in Connecticut with 12 years of experience navigating revenue cycle management. Through my work and research for Medical Billing Service Review, I’ve seen firsthand which billing services consistently help providers minimize claim denials—and which ones fall short.

Today, I want to pull back the curtain and walk you through how medical billing services stack up when it comes to claim denial rates, and why this one metric may be the single most important factor when choosing a billing partner.

Why Denial Rates Matter More Than Pricing

Let’s start with something many practices overlook. A billing service with low fees doesn’t necessarily save you money if they’re losing claims in the back end.

Every denied claim means:

• Delayed revenue

• Extra staff time for appeals and resubmissions

• Increased billing cycle days

• Potential lost income if the claim isn’t recoverable

Even a 2% or 3% increase in your denial rate adds up quickly across hundreds or thousands of claims per year. That’s why I always tell providers to focus less on the monthly fee, and more on the service’s performance metrics—with claim denial rate at the top of the list.

What’s an Acceptable Claim Denial Rate?

In my experience, a healthy denial rate for most billing services should be under 5%. The best providers consistently hover between 2% and 3% depending on the specialty and payer mix.

Anything above 5% is a red flag. If you’re seeing denial rates above 8% regularly, your billing partner is costing you significant revenue.

Some medical specialties—like behavioral health, orthopedics, and durable medical equipment—naturally experience slightly higher denial rates due to more complex coding and documentation requirements. But even in these cases, experienced billing services should be actively reducing denials through stronger front-end processes.

Billing Services That Consistently Deliver Low Denial Rates

While I won’t endorse specific companies on behalf of my clients, I can tell you what separates the top-performing services from the rest when it comes to denial management.

1. Comprehensive Eligibility Verification

Top billing services perform real-time eligibility checks before claims are submitted. They catch inactive policies, plan limitations, and authorization issues up front, reducing the #1 cause of claim rejections.

2. Advanced Coding and Scrubbing Tools

The best providers combine expert human coders with automated claim scrubbing software that catches:

• Missing modifiers

• Diagnosis mismatches

• Incomplete documentation

• Coding updates or payer-specific requirements

This prevents simple errors that trigger denials.

3. Proactive Denial Management Teams

Great billing companies don’t just submit claims and wait. They have dedicated teams that track, analyze, and aggressively work denials. Quick appeals, documentation follow-up, and payer communication are all handled without needing your office staff to get involved.

4. Strong Payer Relationships

Experienced billing services know the quirks of different insurance companies and maintain strong relationships with payer reps. They know how to speak the payer’s language to push claims through on appeal.

5. Transparent Denial Reporting

The best services provide detailed denial reports you can review monthly. They’ll show you:

• Denial trends by payer

• Common rejection reasons

• Time-to-resolution stats

• Percentage of claims resolved on first submission

If your billing service can’t give you these reports, that’s a problem.

Examples of Real-World Denial Rate Differences

I’ve onboarded many providers who switched to my firm after struggling with high denial rates. Here are a few real-life cases I’ve seen:

• A small cardiology practice dropped from 9% to 2.7% denial rate after switching billing companies and improving documentation protocols.

• A physical therapy group reduced their denial rate from 11% to 3.5% by improving pre-authorizations and payer-specific coding.

• A primary care group cut denials from 8% to 2.2% simply by tightening eligibility checks and properly flagging new patient visits vs. established patient codes.

In every case, the revenue impact was immediate and measurable—often recovering tens of thousands of dollars in previously lost income within a few months.

Specialty Billing Services: Who Handles Denials Best?

Some billing services focus on specific specialties—and that often translates into lower denial rates because they understand the unique coding and documentation demands.

For example:

• Orthopedic billing services excel at handling complex surgical coding and authorization management.

• Behavioral health billing companies know how to navigate recurring visit limitations and telehealth coverage rules.

• Ophthalmology billing providers stay on top of ever-changing coverage for procedures and devices.

• DME billing specialists focus heavily on documentation completeness to minimize rejections.

If you’re in a specialized field, choosing a billing company that works almost exclusively with your specialty will often yield much lower denial rates than a generalist service.

Reducing Denials Starts with the Right Partner

At the end of the day, your medical billing partner should feel like an extension of your revenue cycle—not a distant vendor just submitting claims.

A strong billing service proactively works to:

• Prevent denials before submission

• Rapidly correct and resubmit rejected claims

• Educate your staff on documentation gaps that cause recurring issues

• Provide transparent denial reporting you can actually use

When you work with the right service, your denial rate becomes something you don’t have to worry about—because it stays consistently low month after month.

Final Thoughts

Claim denial rates tell you everything you need to know about how well your billing service protects your revenue. Don’t be distracted by bargain pricing or vague promises. Insist on seeing hard denial data before signing any contract.

If you’re currently struggling with denials—or simply don’t know what your current denial rate even is—it’s time for a serious billing audit. A few percentage points could be the difference between a struggling practice and a thriving one.

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About the Author
I’m Amanda Anderson, a Stanford University graduate with a Bachelor of Corporate Communications and the owner of a successful medical billing company in Connecticut. With 12 years of experience in revenue cycle management and billing compliance, I help providers get paid faster and more efficiently through modern billing strategies and smarter technology. As a writer and editor for Medical Billing Service Review, I share insights to help healthcare professionals navigate billing with confidence.

Author: Mike Cynar

Mike Cynar brings buyers and sellers together by producing reviews and creating non biased webpages allowing users to share their experiences on various products and services. He and his staff write informative articles related to the medical field, legal, and other small business industries.