New research from Inovalon, a leading provider of data and solutions empowering data-driven healthcare, reveals that many of healthcare’s most costly revenue cycle problems begin before a claim is ever submitted. The first two installments of Inovalon’s six-part research series draw on a national survey of more than 400 revenue cycle management (RCM) leaders. This research examines the upstream drivers of claim denials and prior authorization delays and identifies opportunities to improve financial performance by preventing problems earlier in the care journey.

Revenue cycle leaders trace denied claims primarily to front-end workflow challenges

Inovalon’s Claim Denials: Prevention Strategies whitepaper highlights the persistent challenges and emerging strategies shaping denial management, reflecting both the scale of the issue and where organizations are focusing their efforts to reduce denials and improve performance.

Key findings include:

  • Claim denials are felt at every level of the organization: 46% of executives and 38% of managers cited denials as a top revenue cycle challenge, showing both the financial toll leadership feels and the operational strain on teams managing denials day to day.

  • Front-end workflows remain the top driver of denials, but the specific culprit shifts by setting: eligibility (33%) and patient registration (19%) for ambulatory organizations, eligibility (28%) and prior authorization (23%) for acute care organizations, and missing or invalid claim data (22%), prior authorization (21%), and eligibility (18%) for post-acute care organizations.

  • Predictive intelligence is shifting denial prevention upstream: RCM leaders increasingly see predictive AI as an opportunity to prevent denials before submission through earlier workflow intervention, smarter claim preparation, and connected decision support.

Provider organizations still manage prior authorization manually by phone or fax

Prior authorization remains one of the largest sources of revenue cycle friction and is a leading contributor to denied claims. Inovalon’s Pain to Promise: Prior Authorization Automation whitepaper found that many organizations are still relying on manual processes that depend on phone calls, fax machines, and staff familiarity with complex, shifting payer requirements. The findings suggest the industry’s greatest opportunity is to go beyond simply automating prior authorization and focus resources on reducing the operational friction surrounding this process.

Key findings include:

  • Prior authorization has become an executive-level concern: 70% of C-suite and VP leaders now call it a significant operational issue. It is a top or secondary challenge for 56% of revenue cycle leaders overall — rising to 85% among acute hospital leaders.

  • Manual workflows dominate: 93% of organizations rely on phone, fax, or payer portals to manage authorizations. Only 7% use dedicated prior authorization software. Two-thirds handle the process entirely on-site.

  • The impact spans finance, staff, and patient care: 56% of leaders cite inconsistent requirements across health plans as the core difficulty (73% among hospitals), and the single greatest impact is financial loss from uncompensated or cancelled care (37%).

“Our research reinforces a broader shift happening across revenue cycle management,” said Karly Rowe, President of Inovalon’s Provider Business Unit. “Providers are spending too much time fixing problems after a denial occurs. The greater opportunity is shifting left by preventing issues before they become denials through connected patient access, eligibility, authorization, and predictive intelligence embedded directly into provider workflows.”

These reports are the first two releases in Inovalon’s six-part research series, with future reports analyzing workforce staffing, patient safety, and perceptions of AI across healthcare. Together, the findings suggest that improving revenue performance increasingly depends on preventing operational friction before it reaches the claim.

Download the full findings to learn more: Claim Denials: Prevention Strategies and Pain to Promise: Prior Authorization Automation That Works for Providers.

About Inovalon

Inovalon is a leading provider of data and solutions empowering data-driven healthcare. We bring together national-scale connectivity, real-time primary source data access, and advanced analytics into a sophisticated platform empowering improved outcomes and economics across the healthcare ecosystem. The company’s analytics and capabilities are used by over 50,000 active, licensed customers, and are informed by the primary source data of more than 99 billion medical, pharmacy, and lab events across 1.1 million clinicians, 736,000 clinical settings, and 461 million unique lives. For more information, visit www.inovalon.com.

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