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Perception Is Not Reality: Study Uncovers Investment Disconnect in Denial Management

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Research, conducted by HFMA, reveals misalignment between organizational priorities and resource investments, signaling opportunity to improve denial prevention processes

LOUISVILLE, Ky.–(BUSINESS WIRE)–Nearly one-third (31%) of healthcare finance professionals say that their organizations are focused on denial prevention, yet only 17% are actively investing in front-end resources that drive a truly proactive approach, according to new survey data from Waystar, a leading provider of healthcare payments software, conducted by Healthcare Financial Management Association (HFMA), a nonpartisan healthcare finance industry association.

The survey polled 415 healthcare finance decisionmakers on how their organizations are investing in tools to prevent and mitigate the impacts of denials, and reveals a significant gap between perceptions of organizational priorities and the realities of revenue cycle resource investments. Among other insights, the survey demonstrated that organizations that invest more in front-end denial prevention see lower first-pass denial rates, but that most companies steer staff toward back-end denial management, with nearly half (49.5%) of responding organizations allocating most of their denial resources to reactive tasks.

“Providers are investing significant time and revenue cycle resources to manage claim denials,” said Matt Hawkins, Chief Executive Officer of Waystar. “This latest data validates our view that organizations must approach denial management with a holistic strategy that incorporates robust front-end denial prevention. This end-to-end perspective, coupled with purpose-built technology to ease overburdened staff, will result in marked improvements for providers seeking to mitigate the payment delays and other business impacts denials cause.”

The survey also found that:

  • 80% of healthcare finance leaders see the need for process improvement to address and manage denials, with 30% of respondents calling that need ‘significant.’
  • Investment in front-end technology breeds a successful proactive approach: Organizations that devoted resources to front-end denial prevention – such as pre-claim eligibility verification, authorization, and payer-specific claim details – saw first pass denial rates of under 11%, nearly three percentage points lower than those who invested in back-end, reactive technologies.
  • Prior authorization continues to create headaches: Prior authorization-related denials reportedly account for nearly 40% of total denials, with more than 70% of respondents pointing to prior authorization as the most time-consuming front-end process.

“Denial prevention and management are key focuses of high-performance revenue cycle management teams,” added Richard Gundling, HFMA’s Senior Vice President, Professional Practice. “When implemented effectively, not only do they support stronger revenue streams, they also empower organizations to more effectively manage their payer engagements.”

For more information on the survey results and how Waystar is helping providers simplify healthcare payments, visit us at Booth 631 at HFMA’s Annual Conference (June 25-28, Nashville, TN), or download the full report here.

About Waystar

Through a smart platform and better experience, Waystar helps providers simplify healthcare payments and yield powerful results throughout the complete revenue cycle. Waystar’s healthcare payments platform combines innovative, cloud-based technology, robust data, and unparalleled client support to streamline workflows and improve financials so providers can focus on what matters most: their patients and communities. Waystar is trusted by 1M+ providers, 1K+ hospitals and health systems, and is connected to over 5K commercial and Medicaid/Medicare payers. Annually, Waystar’s AI-powered solutions process $6B+ patient payments, $4B+ out-of-pocket estimates, and claims for over 50% of U.S. patients. Discover the way forward at

About HFMA

The Healthcare Financial Management Association (HFMA) equips its more than 100,000 members nationwide to navigate a complex healthcare landscape. Finance professionals in the full range of work settings, including hospitals, health systems, physician practices and health plans, trust HFMA to provide the guidance and tools to help them lead their organizations, and the industry, forward. HFMA is a not-for-profit, nonpartisan organization that advances healthcare by collaborating with other key stakeholders to address industry challenges and providing guidance, education, practical tools and solutions, and thought leadership. We lead the financial management of healthcare.