In 2002, 66 percent of one physician practice's total revenue came from claims originally underpaid or denied by health plans and other third-party payers. This revenue would have gone uncollected had the practice not implemented auditing and appeals strategies. Based on this example, it is estimated that physicians are losing billions of dollars in revenue each year by not appealing inappropriate claim denials.

There are many reasons why physician practices do not appeal denied claims; the most common is that they believe appealing claims will create an increased administrative burden on the practice. However, not appealing denied or partially paid claims can be quite costly to your practice and can often result in decreased revenue. Since introducing claims editing software into their claims processing systems, health plans have generated an increased number of inappropriate claim denials and reductions in payment.

An effective way for your practice to combat these erroneous payment reductions and denials is to be diligent in submitting appeals.