August 7, 2026 · Umer Jamil

Fighting denials costs providers $70 million a day

US hospitals and health systems spent $25.7 billion contesting denied claims in 2023, according to a Premier survey of 280 hospitals across 23 states. Divide that by 365 and the industry pays roughly $70 million a day to argue with payers about care it already delivered.

The inputs behind that number are simple. Insurers process about 3 billion medical claims a year. Roughly 15% get denied on the first pass. Contesting a denial costs an average of $57 per claim in administrative expense. Multiply it through and you land on Premier's $25.7 billion, up 23% from the $19.7 billion they measured for 2022.

The detail that should bother you more than the total: 70% of contested denials were eventually overturned and paid. Premier estimates $18 billion of the annual spend went to arguing over claims that should have been paid at submission. The claims were valid. The denials were the error. Providers paid to prove it, one appeal at a time.

The two sides run at different speeds

On the payer side, denial decisions run at machine speed. ProPublica reported in March 2023 that Cigna's PxDx system let its medical directors reject more than 300,000 claims in two months of 2022, averaging 1.2 seconds of review per claim, signed off in batches. Cigna disputes the characterization and says the tool checks coding on a limited set of low-cost procedures. The documented speed still stands: seconds per claim, at volume. And Cigna is one documented example of a practice the industry has run for years.

On the provider side, the response runs at human speed. Many denials resolve quickly, some in a day. But for denials contested through to eventual payment, Premier's respondents reported an average of 3 rounds of review, with each round taking 45 to 60 days. A denial generated in seconds can take 6 months to get paid when the payer makes you go the distance.

The response side is also still mostly manual. An MGMA Stat poll from February 2024 (226 responses) found that 62% of medical groups automate 40% or less of their revenue cycle. About 17% cleared 60%.

Put those numbers side by side. One party issues denials by the hundred thousand with software. The other answers them one at a time with staff, at $57 per attempt, over 6 months, and wins 70% of the time anyway. The overturn rate shows the denials were largely wrong. The cost structure shows who pays for the error.

What this means if you run the response side

For billing company owners and RCM directors, this is a resourcing question. Headcount scales linearly. Payer denial volume does not. Every appeal your team types by hand competes against a system that produced the denial for fractions of a cent. The teams that keep pace are the ones automating the response: denial triage, appeal drafting, payer-specific routing, and the follow-up cadence that survives 3 rounds of review without anyone tracking it in a spreadsheet.

The 17% of medical groups past the 60% automation mark already run their revenue cycle this way. The economics of the other 83% fund the gap.

That gap is why Mohenara exists. We build denial management automation for billing companies, so the 70% of denials that were always going to overturn get overturned without consuming 6 months and a full-time inbox.

Sources: Premier Inc. national provider survey, 280 hospitals across 23 states, 2023 claims data; MGMA Stat poll, February 27, 2024, n=226; ProPublica investigation of Cigna's PxDx system, March 2023.