Denial Cost Calculator
Denials cost twice: the dollars that are never recovered, and the staff time burned reworking the claims that are. This calculator adds both up from your own numbers.
Every denied claim is a small loan your practice makes to a payer — and a share of them are never repaid. Practices feel denials as a workload problem ('the team is busy'), but the real damage is financial: revenue written off after appeals run out, plus the rework hours spent earning money that was already billed once.
Calculate the cost of your denials
How the estimate works
Denied claims per month = volume × denial rate. Of the dollars those claims represent, the unrecovered share (100% minus your recovery rate) is treated as permanently lost; the rest is eventually collected after rework. Rework cost = denied claims × your per-claim rework cost. The $25 default is a widely used planning figure for the staff cost of reworking one denied claim — change it to your own number if you track one. The denial codes behind the rate are decoded in our denial codes guide, and the fix order matters: most practices should attack the top two or three denial reasons first, which is the routine our denial management team runs.
What moves the number
- Denial rate — driven mostly by eligibility misses, authorization gaps and coding errors, all preventable upstream; see how to reduce claim denials.
- Recovery rate — rises when appeals go out fast with the right documentation; our step-by-step appeal guide covers the process.
- Rework cost — falls when denials are worked in batches by root cause instead of one at a time.
Frequently asked questions
What is a normal claim denial rate?
Many practices run between 5% and 10% of claims denied on first submission, and top performers push below 5%. The rate that matters is your first-pass denial rate by payer — one problem payer can hide inside a healthy-looking average.
Is the $25 rework cost per denied claim accurate?
It is a widely used planning estimate for the staff time a denied claim consumes across review, correction, calls and resubmission. Your real figure depends on wages and denial complexity — if you track your own, enter it; the calculator uses whatever you give it.
Why does the calculator assume some denied dollars are never recovered?
Because in practice some are: appeals expire, documentation cannot support the service, or the balance is too small to justify more staff time. The recovery-rate input lets you model your own reality — practices with disciplined appeal follow-up recover substantially more.