Claim Denial Prevention: What 400+ RCM Leaders Are Doing Differently in 2026

If you run revenue cycle operations, you already know claim denials persist. Inovalon surveyed more than 400 revenue cycle leaders and managers across acute, ambulatory, and post-acute settings to find out exactly where denials start and what claim denial prevention looks like at organizations that are making progress. For reference throughout this blog, acute refers to hospitals and health systems, ambulatory means physician practices and specialists, and post-acute refers to skilled nursing facilities, home health, and hospice. Here’s what the data shows:

• Why 72% of revenue cycle management (RCM) leaders identified claim denials as their top revenue cycle challenge, a strain felt at every level of the organization, from the C-suite to the teams processing claims day to day
• How front-end workflows contribute to 78% of denied claims, led by eligibility verification at 54%, and how the biggest driver varies by care setting
• Where AI fits into claim denial prevention today, including strategies leaders rely on most

Why claim denials are the top revenue cycle challenge in 2026

Ask an RCM expert what keeps them up at night, and claim denials are usually the first thing they mention. In Inovalon’s survey of revenue cycle leaders and managers, 83% of executives called denials a top or secondary challenge. As one leader put it, “Payer claim denials have increased significantly, and it takes more staff time to file reconsiderations and appeals.”

That weight lands just as hard on the people processing claims every day. Sixty-five percent of managers said denials were a significant challenge, too. One manager summed up the frustration directly, “We would like to have no denials. But, they are digging deeper to find reasons to deny claims.” Another described the daily workaround, “Taking extra time and using additional staff to confirm coverage.”

Patient payment collection follows claim denials closely as a challenge for revenue cycle leaders at 71% overall. But both patient payment collection and claim denials stem from the reimbursement pressure squeezing providers today. Protecting the revenue already earned becomes just as urgent as generating new revenue. One leader said, “As reimbursement rates decrease, cash flow becomes more and more difficult. Trying to remove claim denials is most important as it can also then reduce staff needs.” That shared pressure likely explains why payment collection tracks so closely behind denials. Prior authorization (56%) and patients with unknown or incomplete insurance benefits (59%) round out the picture feeding into the same revenue squeeze.

What causes claim denials?

Here’s the part worth sitting with: 78% of leaders attributed denied claims to at least one front-end workflow, reinforcing why claim denial prevention starts long before a claim is submitted. The three most frequently named contributors were:

1. Insurance eligibility and benefits verification (54%)
2. Authorization and pre-certification (46%)
3. Patient registration and demographic verification (42%)

Asked to name the single biggest contributor, 27% chose insurance eligibility and benefits verification, making it the most frequently cited individual workflow by a wide margin. The survey also revealed growing frustration with payer-related issues. References to “other contributors” beyond the listed workflows doubled in 2026 compared to 2024, with much of that increase tied to insurer errors and shifting, inconsistent rules rather than internal process gaps.

As one leader put it, “We verify eligibility, but some payers have ‘other insurance possible’ and will deny claims even though the patient is eligible.” Even as leaders pointed to payer-related issues outside their control, providers continue to focus on the front-end workflows where they have the greatest ability to prevent avoidable denials.

Hear more from the leaders behind this data. Watch Voices From 400+ Revenue Cycle Leaders on Claim Denials.

How do claim denials differ by care setting?

Denials hit differently depending on where you sit in the care continuum:

• Acute: the top contributor is eligibility verification (28%), followed closely by prior authorization (23%) and patient registration (18%).
• Ambulatory: eligibility verification dominates at 33%, with patient registration second (19%) and authorization a distant third (11%).
• Post-acute: missing or invalid claim data (22%) and prior authorization (21%) are nearly tied as the leading factors, with eligibility verification close behind (18%).

The findings suggest the challenge goes beyond staffing. Front-end teams are often expected to collect and verify complex information before a claim is ever submitted, and even small gaps in eligibility, authorization, or registration can lead to denials later in the revenue cycle.

What are RCM leaders doing to prevent claim denials?

The most common claim denial prevention strategies are front-end ones, with 61% of leaders validating patient or resident demographic information and 58% monitoring insurance eligibility changes on an ongoing basis rather than checking once at intake. Back-end controls play a real role, too, with 43% using customized claim scrubbing to catch errors before submission.

Adoption tells a different story depending on where you sit in the care continuum. Ambulatory practices lead on the fundamentals, with 67% validating patient demographic information and 63% monitoring insurance eligibility changes, which tracks with eligibility (33%) and registration data (19%) being their top denial drivers.

Acute hospitals have pushed furthest into automation, automating prior authorization at 27% versus roughly 10% elsewhere, a real edge given prior authorization is their second-biggest challenge at 23%.

Post-acute organizations tell the harder story with missing or invalid claim data being their single biggest denial driver at 22%, the exact problem customized claim scrubbing is built to catch, yet only 30% have adopted it, which is the lowest of any setting. One leader shared, “(we’re a) small 30-bed facility that really can’t absorb denials of claims, so we need to be extra careful in submitting claims.” For post-acute providers running lean, that carefulness is still mostly manual.

How is AI used for claim denial prevention?

Survey respondents noted several ways AI could help strengthen claim denial prevention, including:

• Strengthen claim scrubbing to catch high-impact errors before submission
• Predict the likelihood a claim will be denied before it goes out
• Assist with appeal letters and supporting documentation
• Track denial trends and surface patterns across payers

Providers are increasingly investing in unifying front-end RCM workflows. For example, physicians average nearly 40 prior authorizations per week, and every one of those carries denial risk if a requirement gets missed or a payer changes its rules mid-process. As one leader described it, they’re using AI  to “run eligibility checks, request prior authorization, verify correct intake data, claim scrubbing, [and] denials workflow.”

What this means for your organization

The data enables a clear conclusion that claim denial prevention is won or lost at the front end, in eligibility verification, prior authorization, and registration accuracy. Getting those three workflows right addresses the majority of what’s preventable. Inovalon’s Registration Workflow™ is built for exactly this piece, verifying eligibility and finding demographic information before a claim ever goes out.

If you’re in acute or ambulatory organizations, eligibility verification deserves special attention. It’s the single largest contributor in both settings. If you’re post-acute, the data says look at claim data accuracy. The automation gap in denial prediction is wide open. That’s the specific gap that Inovalon’s Claims Management Pro™ and Claim Denial Predictions capabilities are built to close.

For a deeper look at how automated prior authorization specifically is changing this picture, read our companion white paper, Pain to Promise: Prior Authorization Automation That Works for Providers.

Frequently Asked Questions

What causes the most claim denials in healthcare?

Insurance eligibility and benefits verification, cited by 54% of revenue cycle leaders as a contributor and 27% as the single top cause, more than any other workflow, according to Inovalon’s 2026 survey of 400+ RCM leaders.

Do claim denial causes differ by care setting?

Yes. Acute and ambulatory organizations trace denials mainly to eligibility verification and prior authorization. Post-acute organizations see missing or invalid claim data and prior authorization as the leading factors instead.

What’s the most common strategy for claim denial prevention?

Validating patient or resident demographic information (61%) and monitoring insurance eligibility changes on an ongoing basis (58%) are the two most widely used strategies.

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