Hospital claim denials: a complete guide for healthcare managers

Imagine a hospital provides a service, sends the itemized claim to the health plan and, weeks later, gets back only part of the amount, or nothing. Along with the formal refusal of payment comes a code that justifies it. That is a hospital claim denial.

This guide brings together everything a manager needs to know about hospital claim denials: what they are, how they are classified, the most frequent causes, how to identify them, how to appeal them and how to build an operation that prevents denials.

What a hospital claim denial is

A hospital claim denial is the total or partial refusal of payment by a health plan after reviewing the claim submitted by the provider. When a hospital sends the bill for a service to the health plan, the payer audits those amounts before making the payment. Items that do not meet the required criteria, whether clinical, technical or administrative, are rejected. That event is called a denial.

The Portuguese term for a denial, glosa, comes from the Latin glossa, meaning a note or comment in the margin of a text. In private healthcare, a denial is literally that: a mark on the claim indicating that the item will not be paid. The difference is that, unlike an academic note, it has a direct and immediate financial consequence for the hospital.

It is worth distinguishing a denial from nonpayment. Nonpayment occurs when the payer fails to pay what it has acknowledged as owed. A denial, on the other hand, is a formal refusal: the payer disputes the item and removes it from the bill before even processing the payment. They are two different events, with different causes and response strategies.

Denials and the revenue cycle: where they appear

A denial appears at the end of the hospital revenue cycle, at the payment and reconciliation stage, when the hospital compares what it billed with what the payer actually paid. But in most cases its origin lies much earlier: incorrect registration data at admission, an authorization that was never requested, a report that was not attached, a code entered incorrectly during billing.

This mismatch between where a denial appears and where it originates is one of the main challenges of hospital management. The billing department identifies the problem, but the cause lies at the front desk, in nursing, in the operating room or with the medical team. Treating denials only as a billing problem addresses the symptom, not the disease.

What types of hospital claim denials exist

Denials do not have a single cause. They originate at different stages of the revenue cycle, involve different teams and require different prevention strategies. That is why classifying them by type is the first step toward any effective management: knowing what type of denial is occurring makes it possible to act on the right cause.

In Brazilian private healthcare, denials fall into three main categories: technical, clinical and administrative.

Technical denial

It originates in coding and filling errors on the hospital claim. It occurs when the TUSS code recorded does not match the procedure performed, when the ICD code is incompatible with the procedure billed, or when mandatory fields of the TISS form are missing or filled in incorrectly.

The origin usually lies in a lack of standardization between the clinical team and the billing department: the physician describes the procedure using one terminology, the billing specialist codes it using another. Without an alignment protocol, the error accumulates claim after claim, invisibly, until it shows up as a denial on the payer’s statement.

Clinical denial

This type of denial concerns the merits of care. The payer questions whether the procedure performed was clinically indicated, whether the materials and medications used are supported by the medical record, or whether therapeutic protocols were followed. Missing reports, missing physician signatures and superficial clinical records are the most frequent causes.

It is hard to reverse because it involves a judgment about clinical conduct, not just the correction of a formal data point. Prevention depends directly on the quality of care documentation: a complete medical record, detailed physician progress notes and consistency between what was requested and what was performed.

Administrative denial

An administrative denial results from operational failures in the claim submission process: incorrect registration data, eligibility not checked, missing or invalid authorization, submission deadline not met. It does not question the clinical merit of the care provided, but the documentary and contractual compliance of the charge.

In volume, it is the category that shows up most in hospitals’ daily routine. It is also the most preventable: most administrative denials originate in errors that can be corrected before the claim is submitted, with proper protocols and supporting technology.

Comparison of the three types

Main causes of hospital claim denials

Knowing the types of denials is the starting point. The next step is understanding where, in practice, errors happen. The most frequent causes repeat across hospitals of different sizes and specialties, and most originate in process failures that can be corrected before the claim is submitted.

Prior authorization failures

A missing or invalid prior authorization is among the main causes of denials, with greater financial impact in high-complexity specialties. In oncology, for example, a single claim can exceed R$ 2 million in medications, and any discrepancy in the original authorization can invalidate the entire payment.

The most frequent errors: admitting a patient for an elective procedure without a properly validated pre-authorization; failing to regularize urgent and emergency care with the payer within 24 hours; and failing to request new authorizations when complications arise during treatment.

Practical example: a hospital admits a cancer patient with authorization for a specific chemotherapy protocol. During treatment, the patient’s weight changes and the dose needs to be adjusted. The clinical team updates the prescription but does not request a new authorization from the payer. Result: the claim reaches billing with items outside the original authorization, and the denial is automatic.

Incomplete or incorrect documentation

Incomplete or poorly documented clinical information prevents the payer from validating the need for the procedure. Missing reports, missing signatures, superficial clinical records and inconsistency between what was requested and what was performed are the most recurrent causes in this category.

Practical example — Denial 3052:this code, linked to errors in TISS documentation, is one of the most frequent in the industry. It occurs when the information sent on the form does not match what is recorded in the medical record, or when mandatory fields are missing. The most common situation: the physician performs a procedure, the billing specialist codes it correctly, but the report justifying the clinical indication was not attached. The payer denies the item for lack of supporting documentation.

Registration and eligibility errors

Incorrect data at patient admission, such as name, CPF (Brazilian taxpayer ID), member card number or health plan code, generate administrative denials that a simple check at the front desk would prevent. The same goes for eligibility: performing a procedure without confirming that the patient has active coverage for that item means taking an unnecessary risk.

Practical example: a patient arrives at the emergency department and the receptionist records the member card number with one wrong digit. Care proceeds normally, but the claim is sent with a member code the payer does not recognize. The denial is immediate, and the correction requires rework at every stage of billing.

Value and price table discrepancies

Brasíndice, Simpro, contract packages and payer-specific agreements change frequently. When the hospital applies an outdated price table or uses the wrong reference value for a given payer, the claim arrives with a value discrepancy.

Practical example — Denial 1708:this TUSS table code refers to “No value for the surgical procedure.” It occurs when the amount sent to the payer does not match what is contracted for that procedure. The most common cause is the use of an outdated price table or the incorrect application of the current contract with that specific payer.

Late claim submission

Each payer sets contractual deadlines for submitting bills, and missing those deadlines can result in a direct denial, regardless of the technical quality of the claim. According to data from Anahp (National Association of Private Hospitals), the average time to payment at Brazilian hospitals reached 79 days, part of which is consumed before the claim even leaves the hospital.

Practical example: an inpatient claim is held up in the internal audit department because of excess demand. When it is finally sent to the payer, the contractual submission deadline has already expired. The payer denies the items as untimely, and the hospital loses the right to be paid for care that was technically correct and well documented.

How to identify denials at the hospital

Many hospitals only realize the real volume of losses from denials when they do a detailed financial reconciliation, and the number that shows up is usually higher than expected. Identifying denials systematically turns a reactive operation into a preventive one.

The indicators every manager needs to track

The starting point is defining which metrics will be monitored and how often. Four indicators are essential for any hospital that serves health plans:

Initial denial rate:the percentage of total billing rejected by the payer in its first review. It reveals the volume of disputes and serves as a warning of problems in billing and documentation processes.

Accepted denial rate:the percentage that was actually not paid after appeals and negotiations. It is the indicator that measures the real financial impact of denials on the hospital’s results.

Denial recovery rate:of the total denied, how much the hospital managed to reverse through appeals. A low rate may indicate failures in the appeal process, missed deadlines or insufficient supporting documentation.

Average resolution time:the interval between identifying the denial and its final resolution. It directly affects cash flow, because revenue stuck in a dispute is revenue that does not come in.

How to map by payer, type and department

An aggregate analysis of the denial rate hides valuable information. The data that really guides management is the cross-analysis of three dimensions: payer, denial type and department of origin.

By payer, the mapping reveals specific audit behaviors: a recurring denial from a given payer on the same type of procedure may indicate a contractual discrepancy that needs to be discussed formally.

By denial type, technical, clinical or administrative, the hospital identifies at which stage of the revenue cycle errors are concentrated and which team needs more attention or training.

By department of origin, the mapping connects the denial to the exact point where it originated: operating room, ICU, emergency department, oncology. Departments with a high denial rate indicate specific operational bottlenecks that call for targeted action.

The problem of managing without real‑time visibility

The lack of up-to-date information on claim status is one of the main factors that make denial management reactive. When the manager only discovers the volume of denials at month-end close, the appeal window has already narrowed, some deadlines have already expired and the impact on cash flow is already done.

Hospitals that operate without real-time visibility into care costs, denial indicators and claims in processing make decisions with delayed data, which systematically increases losses. Preventive denial management depends on information available at the right time, not after the damage has been done.

The financial impact of denials on the hospital

A denial is a financial problem with a direct impact on cash flow, revenue predictability and the hospital’s ability to invest. The industry’s numbers show that this impact has grown rapidly in recent years.

In 2024, Brazilian private hospitals had R$ 5.8 billion in payments withheld by payers through denials, equivalent to 15.89% of the total they should have received for the services provided, an increase of four percentage points over 2023, according to an Anahp survey of 85 institutions.

To get a sense of the acceleration: historically, the denial rate hovered between 3% and 5%. In 2022, it reached 9%. In 2023, 11.8%. In 2024, it hit almost 16%.

The ripple effect on the revenue cycle

The financial impact of denials goes beyond the amount directly denied. Each denial creates a chain of indirect costs that rarely appear in reports: the billing team’s time spent on analysis and appeals, the cost of reprocessing claims, the legal effort in cases of deadlock with payers and the impact on the contractual relationship with health plans.

When a denial is not appealed within the deadline, the amount is lost for good. When it is appealed without proper documentation, the chance of reversal drops significantly. And when the appeal process is slow, revenue remains on hold for weeks or months, eroding the hospital’s working capital.

Why the problem tends to get worse

The rise in denials is not an isolated phenomenon. It reflects a combination of structural factors: growing care complexity, constant updates to payer rules, stricter audits and cost pressure across the industry. Without a structured denial management process, the problem is likely to get worse every year, silently eroding the hospital’s margin.

The good news is that a significant share of denials is preventable and recoverable, as data from the Anahp Observatory clearly show.

Initial and accepted denials: what the numbers reveal

There are two numbers every hospital manager needs to know, and the difference between them is where the opportunity lies.

The first is the initial denial rate:the percentage of total billing that the payer rejects in its first review of the claim. In the first quarter of 2025, this indicator reached 17% at Anahp member hospitals, the highest level on record. This means that, for every R$ 100 billed, R$ 17 were rejected in the payer’s first review.

The second is the accepted denial rate,also called the final denial rate: the percentage that actually goes unpaid after appeals and negotiations. In the same period, this number stood at 2.09%.

The difference between these two indicators reveals something central to hospital management: most initial denials can be disputed and reversed. The hospital is entitled to payment, and in most cases the payer recognizes that after the appeal. The problem lies in the operational cost of that path.

The hidden cost between initial and accepted denials

Bringing a 17% denial rate down to 2.09% is not free. The process consumes the time of auditors, billing specialists and lawyers, mobilizes documentation, requires deadline tracking and creates rework at every stage. And while the appeal is under way, revenue is held back: the average accounting time to payment reached 73.51 days in the first quarter of 2025, according to Anahp.

In practical terms, the hospital provides the service, issues the claim, waits for the payer’s review, receives the denial, prepares the appeal, waits for the re-review and only then receives payment, weeks or months after care was delivered. Each cycle consumes working capital and operational capacity that could be applied elsewhere.

How to appeal a denial: the appeal step by step

Once the denial has happened, the appeal is the way to recover the amount. Hospitals that structure this process well manage to reverse between 60% and 80% of the amounts initially denied. But the success of an appeal depends on organization, documentation and strict compliance with deadlines.

When it is worth filing a denial appeal

Not every denial is worth disputing. Before filing an appeal, the billing team needs to assess three factors: the probability of reversal based on the available arguments, the amount involved relative to the operational cost of the appeal, and that payer’s history with that type of denial.

Denials with a solid technical basis, complete documentation and a significant amount are the priority candidates for appeal. Denials on items with a systematic history of refusal by the same payer, with no change in documentation or argument, tend to have a low reversal rate and a high processing cost. Sometimes it costs more to dispute the denial than to accept it.

What an administrative appeal must include

The quality of documentation is the main success factor in a denial appeal. A well-structured appeal must contain: complete patient identification, the denial protocol number, a clear technical justification for paying the disputed item and supporting documents that back up that justification.

The most relevant documents vary by type of denial, but generally include:

• the complete medical record with progress notes, prescriptions and nursing records;

• reports and technical opinions that prove the clinical indication;

• up-to-date clinical protocols and guidelines that support the course of action taken;

• regulations from the ANS (Brazil’s National Supplementary Health Agency) that support the case, when applicable.

ANS deadlines and rules for appeals

The ANS regulates the deadlines and conditions for disputing denials in private healthcare. The hospital must check the contractual deadlines set with each payer and the ANS regulations in force, because missing a deadline makes the appeal unviable regardless of the quality of the arguments. Obtaining proof that the payer received the appeal is mandatory: without a protocol number, there is no way to track the process or challenge the refusal at later stages.

After submission, the hospital must stay in active contact with the payer to check the status of the review and provide additional information if requested. Appeals abandoned after submission have a significantly lower reversal rate than those followed up systematically.

Learn more about the ANS Denials Dashboard.

Denial 1708: a practical example of how to build the appeal

Denial 1708, whose TUSS table code refers to “No value for the surgical procedure,” is a concrete example of how to structure the appeal. The first step is to check what was sent to the payer regarding the procedure’s value and compare it with what is in the contract between the provider and the payer for that specific case.

If there is a value discrepancy due to incorrect application of a table, the appeal must present the table in force at the time of care and the contract that references it. If the discrepancy is due to the absence of a contracted value for that procedure, the appeal must demonstrate the legal or contractual basis that justifies the charge.

In more complex cases, guidance from a lawyer specializing in health law can be decisive for the success of the appeal.

How Rivio helps prevent denials at every stage of the revenue cycle

Appealing denials is necessary, but the most efficient management is the one that reduces the volume of denials before they happen. Prevention starts long before billing: it is built stage by stage, from patient admission to sending the XML to the payer.

At admission and eligibility

Admission is the first barrier against administrative denials. Errors made here, incorrect registration data, eligibility not checked, missing mandatory documents, travel through the entire revenue cycle and reach billing with no simple fix left.

The practices that most reduce denials at this stage: checking the member’s eligibility in real time before any procedure; validating the patient’s registration data against the payer’s system; collecting all mandatory documents at admission; and correctly recording name, CPF, member card number and health plan code from the first contact.

At prior authorization

Elective procedures should only be scheduled with a properly validated pre-authorization. For urgent and emergency cases, care can begin without authorization, but regularization with the payer must occur within 24 hours. A specific protocol for this flow, with a designated owner and a deadline alert, drastically reduces denials for invalid authorization.

Complications during treatment that require additional procedures, dose adjustments or a change of protocol must trigger a new authorization request. The clinical team needs to be trained to activate this flow whenever the course of care changes from what was originally authorized.

In care records and clinical documentation

Clinical documentation is the hospital’s main line of defense against a clinical denial. The fundamental practices: making sure every procedure performed is described in the medical record with a clear clinical indication; ensuring reports and opinions are signed and attached to the claim before billing; and keeping what was requested, what was authorized and what was actually performed consistent.

In billing and coding

Standardizing the coding process based on the updated TUSS table, carrying out internal claim audits before submission and continuously training the billing team on each payer’s specific rules are the practices with the greatest impact on the technical denial rate. Each payer has its own criteria: what one accepts, another may deny.

When sending the XML

Automatic validation of the XML before submission, with compliance checks against each payer’s rules, significantly reduces the rejection rate at intake. Claims that reach payers with formatting errors are returned before they are even reviewed, restarting the processing clock and delaying payment.

Rivio automates the most critical stages of this cycle: claims auditing, clinical documentation validation, XML submission and generation of denial appeals based on contractual and clinical evidence. From audit to payment, our specialists in technology, healthcare and billing take care of the entire process so that the hospital receives 100% from health plans, guaranteed by contract.

Frequently asked questions about hospital claim denials

What is a hospital claim denial?

A hospital claim denial is the total or partial refusal of payment by a health plan after reviewing the claim submitted by the provider. When an item on the bill does not meet the payer’s required criteria, whether clinical, technical or administrative, it is excluded from payment. The hospital provided the service, but payment is denied.

What are the main types of hospital claim denials?

Denials fall into three types: technical, originating in coding and filling errors on the TISS form; clinical, related to missing or inadequate care documentation justifying the procedure; and administrative, resulting from operational failures such as invalid authorization, incorrect registration data or a missed submission deadline.

What is the average denial rate at Brazilian hospitals?

According to the Anahp Observatory, the initial denial rate reached almost 17% of total billing in the first quarter of 2025, the highest level on record. The accepted denial rate, which represents the real financial impact after appeals and negotiations, stood at 2.09% in the same period.

How do you appeal a health plan denial?

A denial appeal must include complete patient identification, the denial protocol number, the technical justification for paying the disputed item and supporting documents, such as the medical record, reports and physician opinions. Submission must meet the contractual deadlines and the ANS regulatory deadlines, and the hospital must obtain proof of receipt to track the process.

What is the difference between a technical denial and a clinical denial?

A technical denial originates in errors in filling in and coding the claim, such as using an incorrect TUSS code or missing mandatory fields on the form. A clinical denial questions the merits of care: the payer assesses whether the procedure performed had an appropriate clinical indication and whether the documentation proving that indication is present and complete. Clinical denials are generally harder to reverse because they involve a judgment about medical conduct.