The Best Denial Is the One That Never Happens

The ROI of denial prevention 

Healthcare organizations have spent decades trying to manage denials more effectively. They’ve built workflows to process appeals, invested in claims editing technology, expanded payment integrity programs, and staffed teams dedicated to denial management. But until now, they haven’t quantified the cumulative cost of those workflows. It’s like a hidden cost center.  

A new Availity analysis explores how health plans can determine the ROI of avoided downstream work. We answer the question: How much could you save by stopping denials before they happen, rather than managing them once they do? 

Blog Key Takeaways 

• The most effective denial is the one that never happens. Preventing claim issues before submission eliminates costly downstream work for both health plans and providers. 

• Denial prevention creates measurable business value by reducing administrative costs, improving provider experience, and increasing operational efficiency across the enterprise. 

• A prevention-first strategy requires a new way to evaluate value—one that measures the downstream work that never happens. 

Why a Denial Is Never Just One Transaction 

According to Availity’s Abrasion Index, approximately 10% of claims are denied, yet more than 70% of those denials are ultimately overturned. In other words, organizations are routinely spending resources to process claims that get paid anyway. That raises a bigger question: what is the cost of all the work created around denials that were ultimately avoidable?  

A denial is rarely an isolated event. It’s the first domino in a chain that touches nearly every part of a health plan’s operation.  

That cascade consumes resources across claims operations, utilization management, finance, provider relations, and customer service simultaneously. And in most cases, it’s work that never needed to happen. 

Where Intervention Actually Creates Value 

Health plans can address claim issues at several points in the payment workflow, but those points are not equally valuable, and understanding the difference is the key to the prevention argument. 

• Prevention — This is the point where health plans may have the greatest opportunity to avoid downstream activity. 

• Interception — Issues are caught before or during adjudication. This still requires payer resources, since the claim has already entered the system. 

• Recovery — Recovery remains necessary for certain issues, but it often occurs after administrative work has already been created. 

Most traditional payment integrity programs are built around interception and recovery. Denial prevention is the natural evolution of that framework: by surfacing billing rules, policy requirements, and claim correction guidance before submission, health plans can improve payment accuracy upstream and reduce avoidable denial activity downstream. The most efficient denial workflow isn’t the one that resolves denials fastest — it’s the one that avoids generating them at all. 

Measuring the Value of Work That Never Happens 

For years, the industry has tracked denials through operational metrics — denial rates, appeal volumes, overturn rates, and time-to-resolution. These provide useful visibility, but they all measure activity that has already entered the system. 

Denial prevention measures something different: the value of the work that never occurs. When a denial is prevented upstream, the entire downstream cascade — rework, appeals, provider calls, delayed payment — never materializes, and neither does its cost. 

In one illustrative five-year model featured in the eBook, the cumulative opportunity generated by preventing avoidable denials exceeded $117 million. This is the shift health plans should be evaluating today: the greatest opportunity isn’t managing denials faster. It’s preventing them altogether. 

Denials Avoided Pay Off for Providers, Too 

The impact of denial prevention extends beyond cost. Every avoidable denial also shapes how providers experience a health plan. A denied claim typically triggers provider frustration, administrative work, and delayed reimbursement — multiply that across thousands of claims, and it becomes a real driver of provider abrasion. 

Provider organizations are already navigating their own staffing and administrative pressures, which gives health plans a genuine opportunity to differentiate through simplicity, transparency, and collaboration. Denial prevention supports all three: when providers get actionable guidance earlier in the process, claims are submitted more accurately, payment moves faster, and administrative burden drops on both sides of the transaction. The result is operational efficiency and a stronger payer-provider relationship. 

Why Denial Prevention Matters Now 

Health plans have always had a financial incentive to reduce avoidable denials. What’s changing is their ability to do something about them earlier in the process. 

For years, payment integrity efforts have focused on identifying issues after a claim has already entered the payer workflow. That approach is still important, but it often means administrative work has already been created — claims have been touched, providers have followed up, appeals may be initiated, and teams are pulled into downstream resolution. 

Denial prevention creates a different opportunity. With greater visibility before submission, health plans can identify certain repairable claim issues while providers still have the chance to correct them. That shifts the focus from resolving avoidable denials after the fact to reducing the downstream work those denials would have created in the first place. 

This is why prevention matters now: it gives health plans a more proactive way to improve payment accuracy, reduce administrative burden, and strengthen provider relationships before friction enters the system. 

What is the potential value of avoidable denial prevention for your organization? 

Availity’s Payment Accuracy ROI Model helps health plans quantify the economic impact of preventing avoidable denials before they enter the system. By measuring the value of work that never occurs, organizations can build a stronger business case for reducing administrative costs, improving provider relationships, and increasing payment accuracy. 

Download your free copy of the eBook, The $117-Million Payment Accuracy Opportunity: Measuring the Value of Denial Prevention.

Author Bio

Christina Love serves as the Director of Product Management at Availity. Her mission is to find commonalities between payers and providers to solve problems and reduce redundancies. Christina has extensive product management and marketing experience across industries, including nearly ten years in healthcare technology with a focus on clearinghouse solutions for payers and providers.

Prior to joining Availity, she held various product management and marketing positions at Greenway Health. She earned a Bachelor of Science degree in Business Administration from the University of North Carolina at Greensboro and a Master of Business Administration from Radford University.