Run the Claims Process Like It Earns Money
Run the math on a small practice. 300 claims go out in a month. At the initial denial rate the industry booked in 2024, 11.8 percent by MGMA's benchmarking, about 35 of them come back unpaid. Each one costs somewhere between 25 and 181 dollars to work again, by MGMA's own figures. And roughly 60 percent of denied claims never get reworked at all. Nobody sat in a meeting and decided to abandon that money. It leaked, quietly, through a process no one was running as if it mattered.
That is the core problem with the revenue cycle in most physician practices. It gets treated as plumbing. Claims go out, money comes in, and a stretched billing team bails water when a payer pushes back. Plumbing is something you notice only when it fails. A profit center is something you measure, staff, and defend on purpose, and the claims process is the second thing dressed up as the first.
The cost you never put a number on
Ask an owner what a denial costs and you will usually get a shrug. The honest answer is that it costs twice. Once to produce and submit the original claim, and again to research, correct, appeal, and resubmit it. That second cost is real labor, your highest-paid administrative people spending hours chasing a payment you already earned, and almost no practice assigns it a dollar figure. So it never shows up as a line anyone manages. It hides inside salaries and inside the phrase we are just busy.
Put the number where you can see it. Take your monthly denial count, multiply by a rework cost you believe, and you have the annual price of doing the claims process badly. For a group of any size it clears six figures fast. That is not a billing nuisance. That is a cost the size of a physician's salary, running unattended.
And the denials are not holding steady. In an MGMA poll, 60 percent of group leaders said their denial rate had climbed, while only 11 percent had managed to push it down. Payers are auditing more and paying slower, and the practices treating claims as plumbing are the ones absorbing the whole trend.
What a profit center actually tracks
Running the claims process like it earns money is not a software purchase. It is a short list of numbers somebody owns and reports every month.
First-pass rate, the share of claims paid on the initial submission, because that one figure tells you how much rework you are manufacturing for yourself before a payer is even involved. Denials sorted by reason and by payer, because they are not random and the same handful, missing prior authorization, eligibility that lapsed, documentation a payer disputes, repeats until someone fixes the step that causes it. And the cost of rework, carried as a real expense, so the savings from prevention land somewhere an owner will notice.
Notice that most of those fixes live at the front desk and in the first pass of coding, before a claim ever leaves the building. A denial prevented costs nothing. A denial worked costs you twice and pays you late. The whole economics of the thing point upstream, toward the cheap prevention and away from the expensive cure, and a practice that manages the metrics naturally drifts in that direction.
Assign it to someone
The reason this stays broken is ownership, or the lack of it. The revenue cycle touches the front desk, the clinicians' documentation, the coders, and the billers, which means it belongs to everyone and therefore no one. A process owned by no one performs exactly the way you would expect.
Give it a name attached to a person. One report, monthly, that puts first-pass rate, denials by reason, and the dollar cost of rework in front of you next to last month. Then treat a rising denial rate the way you would treat a clinical complication, as something to investigate and correct, not shrug at. Do that and the claims process stops being the drain in the floor and starts being what it always was under the surface, one of the larger profit levers you own.