Every January, medical group leaders get polled about where their revenue cycle leaks. This year's answer should not surprise anyone who works a claim queue, but it is worth pausing on. In a January 6, 2026 MGMA Stat poll, 48 percent of practice leaders named denials and appeals as their largest revenue cycle leak. Front-end issues came in a distant second at 23 percent.
Read that another way: nearly half of practices have already conceded that the fight happens after the claim goes out. The appeals team becomes the heroes. The workqueue becomes the scoreboard. Meanwhile the same number has been drifting up for years, because the payer side keeps getting faster at adjudicating while most provider-side denial work still runs on spreadsheets and phone calls.
The uncomfortable math behind that poll is that most denials never needed to exist. Industry data puts initial denial rates near 12 percent, and a large share of those are routine: eligibility lapses, missing authorizations, demographic mismatches, payer ID errors. These are the same handful of causes every year, and every one of them is knowable on the day the claim is submitted.
The appeals treadmill is a losing position
An appeal is the most expensive way to get paid. It consumes hours of staff time, resets the clock on the claim, and pushes cash further out into the AR curve. Reworking a single denied claim typically costs $25 or more in labor before you account for the delay in payment itself.
There is also a quiet structural problem: many payers set appeal windows that are shorter than the time it takes a typical billing team to notice the denial, gather records, and write the appeal. Denials that land without a next step age into the 60-plus day bucket, where the odds of recovery drop sharply.
MGMA's January 2026 poll found denials and appeals named the largest revenue cycle leak by 48 percent of medical group leaders, nearly double the share who pointed to front-end problems at 23 percent.
That gap between the two numbers is the tell. It means the industry's effort is concentrated downstream of where the problems are created.
Prevention beats appeals on cost, speed, and morale
The case for moving effort upstream is not subtle. A denial prevented costs a fraction of an appeal, pays on the original claim timeline, and never touches the workqueue. Concretely, prevention looks like:
- Eligibility verified at or before registration, not at billing. Coverage that lapsed mid-treatment is knowable before submission, when a quick patient outreach still fixes it.
- Authorization confirmed against the payer's own records before the claim goes out, with a tracked exception path for the cases that fail.
- Clean demographic and payer data, because CO-16 and similar front-end denials are pure administrative waste.
- Payer rules checked at submission, so claim edits reflect what each payer is actually enforcing this quarter, not what it enforced last year.
None of this is exotic. It is the unglamorous discipline of refusing to send a claim that will bounce. The reason so many organizations skip it is capacity: a small billing team already spends its hours on hold with payer IVRs and inside a dozen different portals. Verification and rule-checking become the first things sacrificed to keep claims moving out the door.
That is the real bottleneck. It is not knowledge - most billing leaders can recite their top denial codes from memory. It is the labor of applying that knowledge to every claim, every day, across every payer.
What to measure if you want the leak to close
If denials are your biggest leak, track three numbers monthly:
- First-pass resolution rate - the share of claims paid on first submission without human intervention. If this is below 90 percent, the problem is upstream of your appeals team.
- Denials by root cause, not by denial code. CO-197 is a code; "authorization not tracked at intake" is a cause you can fix.
- Denial rate of claims that were eligibility-verified pre-submission versus those that were not. Most teams that run this comparison for the first time are surprised by the size of the gap.
The MGMA poll tells practices something they already feel: the denial fight is where the money goes. The way out is not faster appeals. It is fewer denials to appeal, which means the work shifts to the day the claim goes out - checking eligibility, confirming authorization, and correcting what would bounce before the payer ever sees it.
That shift is exactly what we built QHB for: agents that verify eligibility, work payer portals, make the calls, and read the denials, so your team works the exceptions instead of the queue. Whether you automate or not, the principle holds. Denials are cheap to prevent and expensive to appeal, and the day a claim is submitted is the cheapest moment to get it right.