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Medical billing breakdowns can delay or reduce reimbursement, consume staff time in repeated claim work, and leave patients confused about what they owe. They can start before a claim is coded—with inaccurate insurance details or missed authorization requirements—and continue through documentation, payer edits, appeals, payment posting, and collections. The remedy is to identify where errors enter the process and address their causes, rather than treating every denial as the same problem.
How billing problems spread beyond a denied claim
A billing issue rarely stays confined to one transaction. An incorrect insurance entry or outdated demographic detail can undermine an eligibility check, distort a cost estimate, and create extra work after the claim is submitted. Missing authorization evidence, incomplete documentation, or a coding mismatch can then prompt a payer edit or denial. If follow-up is delayed, the practice may face more rework and a harder path to payment; patients may meanwhile receive confusing or inaccurate balance information.
That burden is not limited to provider mistakes. MGMA reports that practices also encounter payer errors and policy changes, alongside internal problems involving documentation, coding, eligibility, and follow-up. A useful response distinguishes what the practice controls from what depends on payer rules or processing.
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Registration, eligibility, and authorization
Errors can begin at the front desk: inaccurate insurance information, outdated demographics, incorrect benefit details, or failure to account for retroactive coverage terminations. Referral and prior authorization requirements add another handoff. Inconsistent collection of copays can also complicate estimates and later collections. These problems are easier to address before the visit or claim than after a balance becomes disputed.
Documentation and coding
The record must support the services and codes reported. CMS advises that records be complete and legible, document the encounter and care plan, and support the CPT, HCPCS, and ICD-10-CM codes on a claim or billing statement. For evaluation and management services, CMS identifies medical necessity as a key payment criterion and says the documented record should support the reported service level. Its guidance is direct: “Make sure the documentation in the patient’s medical record supports the CPT, HCPCS, and ICD-10-CM codes reported on the claim form or billing statement.”
CMS reported a 10.3% improper payment rate for Medicare E/M codes in the 2024 reporting period, with a projected improper payment amount of $3.9 billion. Among those improper payments, CMS attributed 49.1% to incorrect coding, 34.1% to insufficient documentation, 13.1% to no documentation, and 3.7% to other errors. These figures concern Medicare E/M improper payments—not all medical practices, all claims, or denial rates—and improper payments are not synonymous with fraud. See CMS’s E/M services guidance.
Claim submission and payer response
Untimely filing, incorrect modifier use—including Modifier 25—eligibility or ID errors, insufficient documentation, and authorization disputes can all contribute to claim problems. Payer concerns may also involve medical necessity, non-covered services, bundling, utilization management, coordination of benefits, credentialing, or implementation of policy changes. A denial therefore needs a reason-specific review: correcting a registration error is different from appealing a disputed coverage decision.
Denial follow-up, posting, and patient balances
Denials and appeals consume staff capacity through investigation, documentation gathering, resubmission, and follow-up. Delayed charge capture, incomplete appeal tracking, payment-posting errors, high patient responsibility, failed payment plans, or outdated collection processes can add further friction. MGMA’s findings describe reported patterns, not a diagnosis that applies to every practice.
What the reported figures do—and do not—show
MGMA’s Jan. 6, 2026 poll, with 288 applicable responses, asked about revenue-cycle leakage categories. Respondents identified denials and appeals most often, followed by front-end issues, billing and collections, coding, and charge posting. These are shares of poll responses, not measured shares of dollars lost:
| Category identified | Share of applicable MGMA poll responses |
|---|---|
| Denials and appeals | 48% |
| Front-end issues | 23% |
| Billing and collections | 14% |
| Coding | 13% |
| Charge posting | 2% |
In a separate MGMA poll conducted March 5, 2024, 60% of 235 applicable respondents said their medical group’s claim denial rate had increased in 2024 compared with the same period in 2023; 29% said it was about the same and 11% said it had decreased. This is a dated report of respondents’ experience, not a current industry-wide denial rate. MGMA’s denial-reduction article discusses the poll and reported practice responses.
A separate example shows why billing controls can matter to patients as well as practices. In a 2026 audit covering services billed for 2021 and 2022, HHS OIG found Medicare improperly paid physicians $922,524 for 9,749 procedures with emergency-department procedure codes billed using nonemergency place-of-service codes. OIG also identified $14.2 million in potentially improper hospital payments in the audited scenario; that amount was described as potentially improper, not as a final finding that all of it was improper. The audit also identified possible improper Part B deductibles for patients. It is a narrow emergency-department billing scenario, not an estimate of losses across medical practices. See the HHS OIG audit.
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- Map errors by stage and reason. Separate registration and eligibility, authorization, documentation and coding, filing deadlines, payer processing, payment posting, and patient balances. Track each issue by reason and payer so recurring causes are visible instead of treating every affected claim as an isolated case.
- Strengthen front-end checks. Confirm current insurance and demographic details, eligibility and benefits, and referral or authorization requirements. Retain evidence of checks and approvals in a place staff can retrieve during claim review.
- Make documentation support the claim. Record the encounter and care plan clearly and promptly, then check that reported codes match the clinical record. Training should improve accuracy, not encourage unsupported detail or higher coding than the record warrants.
- Track submission and response deadlines. Monitor timely-filing limits, payer edits, authorization status, denial reasons, appeal outcomes, and underpayments. Assign responsibility for follow-up so an unresolved claim does not disappear into a queue.
- Review trends and retrain where needed. Use denial categories to decide whether the fix belongs in front-desk procedures, coding education, documentation practices, payer-rule updates, or escalation of suspected payer errors. MGMA reports that practices seeing fewer denials cited front-desk training, focused denial teams, additional coding staff, and training or certification.
MGMA’s overview of revenue-cycle leakage discusses front-end, denial, and collection problems and includes the Jan. 2026 poll. MGMA Senior Editor Chris Harrop wrote, “The plumbing of a medical practice’s revenue cycle is rarely without a defect somewhere.” The practical implication is not that every process is broken, but that routine monitoring can catch failures before they become repeated work or confusing bills.
Best Value
When automation or outsourcing may help
Technology or an outside partner can support a defined weak point, but it cannot make a poorly understood workflow disappear. First identify the failing stage and whether the cause is internal, payer-related, or shared. Then assess specialty and payer complexity, fit with the existing EHR and practice-management systems, access to claim-level data, audit rights, staff workload, and effects on the patient experience.
MGMA identifies billing companies, clearinghouses, EHR and practice-management providers, bad-debt agencies, analytics vendors, patient-payment platforms, eligibility and benefits services, and coding or auditing services among possible partner types. These categories do not establish that one option is best for every practice. In a Nov. 19, 2024 MGMA poll of 352 applicable respondents, 36% said their organization would outsource or automate part of revenue-cycle management in 2025, 50% said no, and 14% were unsure. That poll measured intentions for 2025, not current adoption.
Any arrangement should make performance visible through agreed measures, clear reporting, and a process for investigating exceptions. MGMA consultant Kem Tolliver, FACMPE, CPC, CMOM, said, “The relationships that we have with our RCM vendors are the ones that either make or break our financial performance.” Tolliver also warned: “The worst outcome is to have an RCM vendor hide information due to fear of reprisal.” The practice should be able to see the work, understand the results, and raise problems without losing access to the underlying data. See MGMA’s discussion of automation and outsourcing.
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Measure operational impact without inventing a universal price tag
There is no single established dollar figure for what billing breakdowns cost a typical practice. Instead, leaders can assess local impact using measures tied to the workflow: denial and appeal volume by reason, time from service to clean submission, aging of unresolved claims, timely-filing losses, payment-posting corrections, underpayments identified, staff hours spent on rework, and patient billing inquiries or disputes. Read those measures together: a lower denial count is not a complete success if unresolved balances, rework, or patient confusion are rising.
Review measures by payer, service line, and process stage where the data allow. That helps distinguish an isolated mistake from a recurring registration gap, a documentation pattern, an implementation of payer policy, or a processing issue. It also gives the practice a concrete basis for deciding whether to change an internal workflow, escalate a payer problem, or evaluate a service partner.
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