The Rising Cost of Claim Denials and How FQHCs Can Protect Their Bottom Line

Healthcare providers are facing a mounting challenge: claim denials are on the rise, and they’re taking a serious toll on both revenue and patient care. According to Experian’s 2025 State of Claims report, more than 41% of providers now say that 10% or more of their claims are denied, up from 38% in 2024 and just 30% in 2022. For Federally Qualified Health Centers (FQHCs) and other safety-net providers, this trend isn’t just a headache—it’s a threat to mission and sustainability.

Why Denials Are Such a Problem

Every denied claim creates ripple effects that extend far beyond the billing office:

• Lost revenue: Up to 65% of denied claims are never resubmitted. Even when corrected, reworking a claim can cost anywhere from $25 to $118.
• Cash flow delays: Denials push payments back weeks or months, straining the ability to cover payroll, purchase supplies, or invest in patient services.
• Labor burden: Experian reports that 90% of denials require human review and rework before resubmission. With 43% of organizations already understaffed, this creates bottlenecks and burnout.
• Patient impact: When payers don’t pay, the burden shifts to patients. Half of providers surveyed said they are extremely concerned that patients won’t be able to cover these costs.

Denials are more than numbers on a dashboard—they represent lost opportunities to reinvest in care and community health.

What’s Driving the Increase?

The reasons behind denials are familiar, but the numbers are trending in the wrong direction:

1. Missing or inaccurate claim data: 50% (up from 46% in 2024)
2. Authorization issues: 35%
3. Incorrect patient registration data: 32% (up from 30%)
4. Coding inaccuracies: 24%
5. Services not covered: 23%

Underlying these triggers is a deeper issue: data quality. More than half of providers (54%) said claim errors are increasing, and 68% said submitting “clean” claims is harder than a year ago. Fragmented intake systems, understaffing, and shifting payer rules only make matters worse.

Why Managing Denials Isn’t Enough

Historically, providers have focused on denial management—tracking, appealing, and resubmitting rejected claims. While necessary, this approach is reactive, expensive, and unsustainable.

The smarter approach is prevention. By addressing potential errors before claims go out the door, providers can reduce rework, improve first-pass rates, and stabilize revenue. In other words: the best offense is a good defense.

The Turning Point: Prevention Through Technology and Expertise

Experian’s report highlights that while 82% of providers consider denial reduction a top priority, only 14% are currently leveraging AI to help prevent them. Most organizations are still battling denials with manual processes, even as technology adoption accelerates.

This is a critical turning point for the industry. Denial prevention is no longer a “nice to have”—it’s a survival strategy.

How Synergy Billing Is Leading the Shift

At Synergy Billing, we’ve built our entire approach around denial prevention. Here’s how:

• WorkSmart MD: Our platform proactively validates claim data against payer-specific rules before submission, flagging missing information and coding inconsistencies that could trigger denials.
• FQHC Expertise: We specialize in the unique billing and compliance requirements of community health centers, from Medicaid wrap-around payments to sliding fee scales.
• Continuous Improvement: Our team actively monitors payer changes and updates denial-prevention rules, ensuring our clients stay ahead of shifting requirements.
  

By combining advanced technology with deep expertise, we help FQHCs achieve higher first-pass rates, reduce administrative burden, and protect revenue streams—so they can focus on what matters most: caring for their communities. 

In today’s healthcare economy, denial prevention isn’t optional—it’s essential. At Synergy Billing, we’re proud to help FQHCs turn denial prevention into a competitive advantage.

At Synergy Billing, we help FQHCs strengthen their revenue cycle, identify growth opportunities, and implement sustainable financial strategies that go beyond grant cycles.