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Are denied amounts the same as lost revenue?

Distinguish amounts under review from administrative rework costs and confirmed financial outcomes.

By DueMDEditorial answer

No. An amount associated with denied claims tells you what is under review. To call an amount a final loss, you need evidence about the eventual outcome, not just its initial status.

Keep these three numbers apart

In the DueMD example, 20,000 monthly claims at an 8% initial denial rate produce 1,600 initially denied claims. An assumed $21 of rework per claim gives $33,600 of administrative effort.

At a $230 average allowance, those claims are associated with $368,000 of allowance. That is not an additional $368,000 of staff cost, nor is it automatically $368,000 of lost revenue.

If 48% are assumed resolved by the end of a defined follow-up window, 832 remain unresolved. Their modeled allowance is $191,360. They might still have later outcomes; the simple estimate does not know them.

Make the definitions visible

State whether you count claims or lines, whether the rate covers initial denials, and how long cases have had to resolve. Use the same definitions across periods before comparing results.

The Denial Cost Calculator keeps rework, associated allowance, unresolved allowance, and assumed delay separate. The guide shows the formulas. The example inputs are illustrative, not industry averages.

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