Premier Inc. puts the average cost of pursuing a denied commercial claim at $63.76. Across all payers the average is still $43.84, ranging from $0.79 for Medicare to $47.77 for Medicare Advantage. That is the price of one rework: a biller pulling the claim, checking the portal, calling the payer, sitting on hold, documenting the answer, and queuing the next step.
Now hold that against the other number every revenue cycle leader knows: per the Change Healthcare Revenue Cycle Denials Index, 65% of denied claims are never reworked at all. Not appealed, not resubmitted, not even looked at twice. The majority of denials simply expire.
That is not negligence. It is arithmetic.
If a rework costs $63.76 of loaded staff time and the recovery is uncertain, every small balance claim becomes a coin flip you pay to enter. Teams triage rationally: chase the big balances, let the long tail rot. The tail is where the 65% lives.
The time math is just as stubborn. CAQH benchmarks the manual effort of a claim status follow up at roughly 24 minutes. One 24 campus health system we work with measured its own fully loaded number at 22 minutes and $22.28 per claim. Multiply either figure by a backlog of tens of thousands of claims and the conclusion is the same: you cannot hire your way through it. Every biller you add comes with the same 22 minutes, the same hold music, the same eight hour ceiling.
The fix is infrastructure, not headcount.
The work that makes denial follow up expensive is almost entirely mechanical: retrieve status, navigate an IVR, hold, ask three questions, write it down, route the next action. Agents do this in parallel, around the clock, for $2.00 a claim instead of $22.28. At that price, the coin flip disappears. The long tail stops being uneconomical to touch, because touching it costs less than the postage used to.
That same health system took its 60+ day commercial claims from 45 days in AR to 7 within three months of go live, with zero added headcount. The team did not get faster at holding. The holds stopped reaching them.
When the cost to work a claim drops by an order of magnitude, the 65% stops being a fact of life and becomes what it always was: unworked revenue, waiting.
Sources: Premier Inc. denial cost analysis; Change Healthcare Revenue Cycle Denials Index, also cited by the American Medical Association; CAQH Index on manual claim status inquiry time. Customer figures from the Nutex Health engagement, detailed here.