Article | Revenue Cycle

HFMA Claim Integrity Task Force seeks to standardize denial metrics

Article | Revenue Cycle

HFMA Claim Integrity Task Force seeks to standardize denial metrics

The issue of denials is a classic one in the healthcare industry, with about 9% of hospital claims denied, averaging $262 billion per year. But loss of revenue due to the pandemic has made it even more important for healthcare organizations to improve their denial rates, says Chuck Alsdurf, HFMA’s director, professional practice and executive relationships. A new task force is looking to improve the data and KPIs needed to further reduce denials. HFMA recently released a whitepaper detailing the work of the task force in an effort to “create and define claim resolution standards and metrics for measurement and benchmarking.”

The task force includes 18 industry leaders, including representatives from Cloudmed, Revecore and TruBridge, who sponsored and contributed to the report. 

The report details common metrics every provider organization should be reviewing to identify where and how denials happen as well as the types of denials being experienced, Alsdurf said. The objective was to go beyond standard revenue cycle metrics, including HFMA’s MAP Key Performance Indicators.3 The task force identified six metrics for healthcare providers to use, detailed in the report:

  1. Initial denial rate (as a percentage of volume and dollars) 
  2. Primary denial rate
  3. Denial write-offs as a percentage of net patient service revenue (HFMA MAP Key AR-6)
  4. Time from initial denial to appeal
  5. Time from initial denial to claim resolution
  6. Percentage of initial denials overturned (with reference to charges, volume and inpatient denials that converted to observation)

“We feel like these metrics are the most helpful and accurate way to measure for a benchmarking purpose,” Alsdurf said. “These aren’t the only metrics you need, but they provide a starting point to begin understanding performance and opportunities for intervention.”

Using the above-mentioned metrics will allow healthcare organizations to measure their performance against that of their peers, Alsdurf said.

“We know that providers use metrics today, though we found that the lack of standard KPIs and definitions make it nearly impossible to compare results. This work should support further efforts in developing best practices for denials management, reduction and prevention,” Alsdurf said.

HFMA plans to continue the conversation around denials in a new Community group and the “Industry Insights Into Denials Management: Tips & Tools for Improving Claims Integrity" workshop on March 22. For more information on the workshop, visit, click on the Education and Events tab and then the revenue cycle and price transparency workshop. 

About the Author

Erika Grotto, CHFP, CRCR,

is a senior editor, HFMA, Westchester, Ill.

Sign up for a free guest account and get access to five free articles every month.


Related Articles | Revenue Cycle

How To | Financial Sustainability

Financial Sustainability Report: July 2021

The July 2021 issue of the Financial Sustainability Report, sponsored by Kaufman Hall, includes an account of how one health system assessed the benefits and risk associated with moving its 340B covered-entity pharmacy enterprise to a Limited Liability Company. The issue also includes a commentary on CMS’s new Acute Hospital Care at Home program and a discussion of a new metric, equivalent net patient revenue (ENPR), which organizations can use to assess the relative value of proposed investments in alternative revenue sources.

News | Finance and Business Strategy

HFMA’s Annual Conference virtual preview offers a glimpse of what’s coming in November

The three-hour virtual preview of the Annual Conference, including a look at the educational tracks, key speakers and other attractions, is available on-demand.

News | Revenue Cycle

HFMA presents the 2021 MAP Award for High Performance in Revenue Cycle to 32 organizations

Presented this year as part of HFMA’s Annual Conference Virtual Preview, the MAP Awards honored organizations that used innovative and effective strategies to achieve excellence in revenue cycle performance in 2020-21.

How To | Financial Sustainability

Financial Sustainability Report: May 2021

The May Financial Sustainability Report, sponsored by Kaufman Hall, describes a new method for compensating physicians that better accounts for each organization’s unique circumstances. It also includes guidance for finance and clinical leaders on how they can work together effectively while acknowledging their differences, and it examines how payer-provider partnerships are helping organizations keep pace with a transforming healthcare industry.