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Revenue cycleEvery denial your team works costs staff time, and some cost more than they'll ever bring back. Here's what published surveys say a denial costs, and how to find the claim value below which an appeal loses money.
Cost depends on the payer, the denial type and how many review rounds it takes. Premier's February 2025 survey of 280 hospitals put the average at $57.23 per denied claim fought for 2023 claims, up from $43.84 for 2022 claims (vendor-published). An appeal loses money when the payment you can expect from it, on average, is less than that cost.
At Premier's 2023 averages, where 68.6% of denied claims were ultimately paid, working a denial pays for itself only if the claim would pay about $83 or more (TSI calculation: $57.23 ÷ 0.686 = $83.43).
Most of the cost is staff time. Labor made up 90% of claims processing expenses in Premier's 2025 survey, so every extra touch adds cost.
| Payer type | Cost per claim to pursue delays and denials, 2022 claims | Share of initial denials overturned, 2022 claims |
|---|---|---|
| Medicare | $0.79 | 50.0% |
| Medicare Advantage | $47.77 | 52.7% |
| Medicaid | $5.99 | 45.8% |
| Managed Medicaid | $24.80 | 49.7% |
| Commercial | $63.76 | 60.5% |
| All payers, 2022 claims | $43.84 per denied claim fought | 54.3% of private-payer denials |
| All payers, 2023 claims | $57.23 per denied claim fought | 68.6% of denied claims ultimately paid |
Source: Premier member surveys, vendor-published (March 2024 for 2022 claims; February 2025 for 2023 claims). Premier's payer chart is titled "Average administrative cost for providers to pursue delays and denials, per claim" and doesn't define the claim base, so use the payer rows to compare payers and the all-payer rows for break-even math.
An appeal pays for itself, on average, when claim value × overturn rate × share of the claim paid when overturned is more than the cost to work it. Solve for claim value to get the break-even point.
Break-even claim value = cost to work a denial ÷ (overturn rate × share paid when overturned)
Say a denial costs $57.23 to work (Premier's 2023 average), half of similar denials get overturned, and an overturned claim pays 40% of billed charges. Break-even is $57.23 ÷ (0.50 × 0.40) = $286.15 in billed charges. A $250 claim brings back $50 on average ($250 × 0.50 × 0.40) against $57.23 in cost, a loss of $7.23 per appeal.
Break-even billed charges when an overturned claim pays 40% of billed charges (TSI calculation):
| Cost to work a denial | 30% overturned | 50% overturned | 70% overturned |
|---|---|---|---|
| $43.84 (Premier, 2022 claims) | $365.33 | $219.20 | $156.57 |
| $57.23 (Premier, 2023 claims) | $476.92 | $286.15 | $204.39 |
| $100.00 (illustration) | $833.33 | $500.00 | $357.14 |
Results vary by payer mix and client program.
Premier's figures come from voluntary surveys of its own member hospitals, weighted by acute bed capacity: 280 hospitals in 23 states for 2023 claims, and 516 hospitals in 36 states for 2022 claims.
The 2022 figure leaves out added clinical labor, so clinical denials likely cost more than the average. Premier also sells prior authorization and claims tools, which its 2025 release describes.
Averages blend payers, denial types and hospital sizes. Your own cost per denial is the number to use.
Pick a period, such as the last full quarter.
Add up staff hours spent on denials by role, at loaded hourly cost, plus vendor fees and the share of software cost used for appeals.
Divide by the number of denials worked in that period.
Track overturns and amounts paid by payer and denial type over the same period, so the worksheet's rates match the cost.
Figures come from Premier's member surveys, published March 2024 and February 2025, and are cited to Premier directly. The break-even math is TSI arithmetic on the inputs shown and carries no TSI performance data. Figures were checked against their sources on Sep 28, 2026, and get checked again by Mar 28, 2027.
TSI (Transworld Systems Inc.) publishes it. TSI provides Accounts Receivable Management (ARM), Healthcare Revenue Cycle Management (RCM), CXBPO and Loan Servicing (via UAS). DebtNext, a TSI company, makes recovery management software for creditors. Some options this page describes compete with services TSI sells. Each figure names its publisher and date so you can check it yourself.
The break-even calculator takes your cost per denial, overturn rate and share paid, with Premier's $57.23 as an editable default, and returns the claim value below which an appeal loses money. Open the denial appeal break-even calculator. It runs in your browser, and nothing you enter is stored or sent.
General information, current as of Nov 2, 2026. It isn't legal advice. Rules change and differ by state, so check the sources linked here and talk to your own counsel before you act on it.
The Denials Economics Sprint takes one payer, one denial class and defined claim-value bands, sets a baseline, and reports overturn, paid yield, cash, time, human effort, cost per claim, the economic threshold and the expansion case.
