Services Not Covered Overtakes Every Other Denial Reason
The denial pattern has shifted in a way billing teams can feel immediately. Services not covered is now the most common reason claims are denied, marking the first time that category has taken the top spot since Experian Health began tracking the issue in 2022. It appeared in the top three reasons for 53% of respondents, ahead of frequently changing payer policies at 31%, while code inaccuracy and difficulty obtaining prior authorization tied at 25% each.
The practical meaning is stark. A service can be delivered, documented, coded, and submitted cleanly, then come back weeks later with a reason code saying the payer no longer considers it payable. In that setting, the denial is not driven by a clinical miss inside the practice. It often reflects a coverage rule or utilization barrier that moved after the encounter occurred.
Denial Rates Have Plateaued Near the Survey Peak
Forty percent of respondents said at least 10% of their claims are denied, a figure that barely changed from 41% in 2025 and remains well above the 31% recorded in 2022. Fourteen percent said more than 15% of their claims are denied. The trend line has not broken upward in a dramatic way, but it has also not retreated from the high levels that have now become familiar across provider organizations.
Three-quarters of respondents said denials are increasing, and 89% said reducing denials is a priority for 2026. The urgency is not abstract. When a denial rate stays elevated over multiple years, the administrative burden becomes part of the operating model rather than a temporary disruption. Staff time gets pulled from front-end registration, coding review, appeal work, patient follow-up, and reconciliation of accounts that should have been closed.
Pressure from the payer side continues to intensify. Seventy-nine percent said payer reimbursement is more challenging, 78% said payer policy changes are more frequent, 64% said time to reimbursement is increasing, and 53% said errors in submitted claims are increasing. In parallel, 69% said their organization manages denials quickly and efficiently, down from 75% a year earlier. Sixty-five percent said submitting clean claims is harder than it was 12 months ago, and 68% said denials are occurring at a higher rate than a year ago.
Those numbers fit the current reimbursement climate. More frequent policy changes, less predictable coverage criteria, and tighter documentation expectations create a system in which a claim can fail even when the underlying care was appropriate. For practices, especially those without large revenue cycle teams, the operational burden arrives in the form of rework, not just rejection notices.
Appeals Often Succeed, But the Cash Still Slips Away
The most consequential gap in the survey is the space between winning an appeal and actually collecting the money. Eighty-six percent of respondents said they successfully resubmit denied claims at least half the time. Yet only 30% said they recover 80% to 100% of denied revenue. Another 52% said they recover only 50% to 70%.
The recovery problem matters because a partially overturned denial is still a financial leak. A practice may prove medical necessity, correct a coding issue, or reverse a payer decision and still fail to recapture the full amount, especially if the filing window closes or the labor required to keep pursuing the claim is too high. That gap favors large systems with dedicated appeals staff and penalizes smaller practices that must make a rapid cost-benefit decision on each denial.
Wael Khouli, M.D., MBA, described that pressure in a Medical Economics commentary earlier this year, arguing that payer policies have become more complex, changed more often, and require more specific documentation than they did several years ago. He also noted that prior authorization has expanded into services that were once routinely approved. In that environment, a denial is not simply a technical nuisance; it is often an economic decision imposed on the practice after the care has already been delivered.
A single write-off can be enough to strain a small office. When a few hundred dollars are lost on a claim that could have been appealed successfully, the impact reaches beyond accounting. It affects staffing, equipment replacement, and the ability to preserve access for patients who depend on independent practices.
AI Adoption Lags Even as Interest Rises
The technology findings point in two directions at once. Reported use of robotic process automation fell to 20% from 25% in 2025, and reported use of AI in claims fell to 9% from 14%. Yet 64% said they definitely or probably plan to invest in AI for claims and denial management, and 83% said they would fully replace existing technology for a compelling return on investment.
That mix suggests a market that is interested but still cautious. Some organizations may be using AI in systems that are embedded and invisible to day-to-day users. Others may have pulled tools back after limited returns, or they may still be waiting for proof that the software can reduce denials without creating new work for already stretched teams. The split in opinion is equally telling: 38% said AI can dramatically change the claims process, another 38% said it can but will take a while, 8% said it is likely only for organizations that can afford the investment, and 11% said no.
The hesitation is especially notable because payer behavior is already being shaped by automation and policy logic on the other side of the transaction. Providers are being asked to respond faster, document more fully, and appeal more selectively while reimbursement decisions become more rigid and less forgiving. In that setting, AI is attractive not because it is fashionable, but because denial management has become too large and too repetitive to handle entirely by manual labor.
Economic Pressure Is Tightening the Revenue Cycle
Seventy-nine percent of respondents said economic conditions make payer reimbursement more urgent, the highest level since the survey began. Seventy-five percent said they are very or somewhat concerned about reimbursement from both payers and patients over the next 12 months. Those concerns converge on the same cash-flow problem: money is arriving later, and more of it is at risk of being written off before it ever reaches the ledger.
The survey was fielded August 5 to 23, 2026, among 204 staff members responsible for finance, billing, registration, reimbursement, claims, and collections, including directors and chief officers. Because the results are not broken out by organization type, the findings reflect provider organizations broadly rather than physician practices alone. Even so, the trend is consistent with what many practices are already experiencing: denials are no longer a side issue in revenue cycle management, and the most common failure point now starts with the payer’s determination that the service was never covered in the first place.