Overall Denial Rate Trends: Where Things Stand in 2026
The medical billing denial rate — the percentage of submitted claims that payers reject on first submission — has climbed steadily for the past four years. In 2026, the industry average sits at 10–15% of all claims submitted, up from 9–12% in 2022 and roughly double the 5–7% rates that well-performing practices achieved a decade ago.
Several forces are driving the increase:
- Expanding prior authorization requirements: Major payers added PA requirements to hundreds of additional procedure codes between 2023 and 2026. More services now require pre-approval that didn't before.
- Medicare Advantage growth: MA enrollment surpassed 55% of eligible Medicare beneficiaries in 2026. MA plans have denial rates 2–3× higher than traditional Medicare Fee-for-Service.
- AI-driven claims screening: Payers increasingly use automated systems that flag and deny claims faster than manual review — often on technical grounds that are easily corrected but rarely caught before the 65-day appeal window closes.
- Staffing pressures in billing departments: High turnover in revenue cycle roles means more billing errors and fewer experienced staff to catch issues before submission.
A denial rate below 5% is the MGMA benchmark for high-performing practices. Rates above 10% typically indicate systematic billing workflow problems — not just individual claim errors. If your practice is above 10%, you're losing substantial recoverable revenue every month.
The financial stakes are significant. At a 10% denial rate on $1M in annual billings, a practice loses $100,000 in initial payments — and with an 89% non-appeal rate, most of that revenue is permanently forfeited. This data guide breaks down exactly where those denials come from, which payers are responsible, and what the recovery landscape looks like.
Claim Denial Rates by Payer in 2026
Denial rates vary dramatically by payer. The range runs from roughly 4% for well-managed Medicare Fee-for-Service billing to over 25% for some Medicaid managed care programs. Understanding your payer mix is the first step to benchmarking your own denial rate against the right baseline.
Your overall denial rate is a weighted average of all your payers. A practice with 60% Medicaid managed care will naturally run higher denial rates than one with 60% traditional Medicare — and should benchmark against different targets. The more relevant question: how does your denial rate compare to peers with the same payer mix?
Most Common Denial Codes and Their Frequency in 2026
The top five denial codes account for roughly 50–60% of all claim denials industry-wide. Every billing team should know these codes, their relative frequency, and their appeal success rates. See the full CARC denial code reference for detailed breakdowns of every code.
| CARC Code | Denial Reason | Share of All Denials | Appeal Win Rate | Trend |
|---|---|---|---|---|
| CO-16 | Missing or incomplete information — required field blank, incorrect, or unreadable | 15–20% | 70–75% | ↑ Rising |
| CO-18 | Duplicate claim — payer already has this claim on file | 10–12% | 90%+ | → Stable |
| CO-11 | Diagnosis inconsistent with procedure — ICD-10 doesn't support the CPT code billed | 8–10% | 65–70% | ↑ Rising |
| CO-4 | Missing or invalid modifier — required CPT modifier not included | 6–8% | 75–80% | → Stable |
| CO-9 | No prior authorization — service required PA that was not obtained | 4–5% | 65–75% | ↑↑ Rapidly rising |
| CO-45 | Charges exceed fee schedule / contracted rate | 4–6% | 5–15% | → Stable |
| PR-1 | Deductible amount — patient responsibility before insurance pays | 3–5% | N/A (patient balance) | ↑ Rising with HDHPs |
| CO-96 | Non-covered charge — service not covered under patient's plan | 3–4% | 5–25% | → Stable |
| CO-22 | Coordination of benefits — another payer is primary | 2–3% | 60–70% | → Stable |
| CO-15 | Wrong patient information — incorrect member ID, DOB, or name | 2–3% | 75–85% | → Stable |
CO-16 and CO-18 are high-volume and high win rate — prioritize these. CO-45 and CO-96 are contractual adjustments with very low win rates — don't waste time appealing them. CO-9 (missing prior auth) is rising fast due to PA expansion and has a strong appeal success rate when the auth was obtained but not linked correctly.
The Rising Prior Authorization Problem
CO-9 (missing prior authorization) deserves special attention in 2026. The American Medical Association's annual survey reports that physicians spend an average of 14 hours per week per physician on PA-related work — up from 10 hours in 2022. CMS has mandated PA response time improvements for Medicare Advantage plans effective 2025, but commercial PA requirements continue to expand.
The key distinction: many CO-9 denials are not because the practice forgot to get authorization — they're because the authorization wasn't properly linked to the claim, or the service was rendered under a slightly different code than what was authorized. These are highly appealable. See the denial code reference for CO-9 specific appeal guidance.
Financial Impact by Practice Size
The dollar impact of denials scales with practice revenue, but the percentage of recoverable revenue held constant at roughly 68% (the industry average appeal overturn rate net of non-appealable codes). Below are models using conservative 10% denial rates — practices above 10% should adjust upward proportionally.
The pattern is stark: practices are systematically forfeiting roughly 85–90% of their recoverable denied revenue because claims go unappealed. The barrier is rarely willingness to appeal — it's bandwidth, prioritization, and lack of visibility into which denials are worth working.
For a 5-provider practice running a 10% denial rate, a systematic appeal program targeting the top five high-win-rate codes could realistically recover $80,000–$120,000 annually — revenue that currently goes permanently forfeited. That's equivalent to the billing cost for 1–2 additional providers' revenue cycles.
Appeal Success Rates by Denial Type
The 60% overall appeal overturn rate is one of the most important numbers in medical billing. It means the majority of denials that get properly appealed are reversed in the provider's favor. But that 60% is an average across all codes — actual success rates vary dramatically by denial type.
The five codes with 65%+ win rates — CO-18, CO-15, CO-4, CO-16, and CO-9 — are where appeal ROI is highest. For a typical practice, these five codes represent 40–50% of all denials and the majority of recoverable revenue. Working these systematically before touching lower-win-rate codes is the right prioritization. For step-by-step guidance on each, see the complete appeal guide.
See How Much Your Practice Is Losing
The statistics above are industry averages. What matters is how your practice compares to benchmarks — and specifically, which of your current denied claims represent recoverable revenue.
A denial audit breaks down your denied claims by CARC code, flags which are approaching their appeal deadline, and calculates your estimated recoverable revenue. It takes 60 seconds if you have a denied claims export from your practice management system.
Your practice management system can export denied claims as a CSV with claim ID, CARC code, payer name, amount, and denial date. That's all you need to see exactly where your practice stands against the benchmarks in this guide.
Upload your denied claims CSV at the Denial Audit Tool and get your practice's denial breakdown in 60 seconds — recoverable revenue by CARC code, claims approaching deadlines, and benchmark comparison. No account required, data is never stored.
The gap between a 10% denial rate and a 5% denial rate represents tens of thousands of dollars in annual revenue for the average practice — and the 89% non-appeal statistic means most of it is being left on the table permanently. The data in this guide shows where the opportunity is. Acting on it requires visibility into your specific claims.