Feb 27
2025
Surging Audit and Denial Rates Signal Need to Prioritize Continuous Financial Risk Monitoring in 2025
By Ritesh Ramesh, CEO, MDaudit.
Amid a 125% rise in coding-related denials and a 140% increase in inpatient medical necessity denials, 2025 will see healthcare providers deploying real-time financial risk monitoring as a cornerstone of stability.
Adding to the urgency around overhauling revenue cycle management (RCM) strategies to prioritize revenue optimization and risk mitigation is a fivefold increase in total “at risk” dollars to $11.2 million and a doubling of external audit volume in 2024 over 2023—including a sizable increase in pre-payment audits and their propensity to exacerbate cash flow issues and expose providers to potentially higher denial rates.
These headwinds, coupled with slower reimbursement timeframes, tempered any gains from improved revenues and operating margins in 2024 and threatened healthcare providers’ financial stability—a backdrop of challenges that are among the key findings of the recently released 2024 MDaudit Annual Benchmark Report.
The annual report’s findings elevate the transformation of RCM into a strategic imperative for health systems in 2025. They highlight the pressing need to continuously monitor financial risk to proactively mitigate issues before they impact operations.
Impending Financial Risks
The Benchmark Report is a comprehensive examination of real-world data representing the first three quarters of 2024 collected from a network of more than 650,000 providers and over 2,200 facilities that provide data to MDaudit for auditing, charge analysis, and denial assessment. It encompasses insights from more than $8 billion in audited professional and hospital claims and more than $150 billion in denials by commercial and government payers. Over 5 billion claims and remits were used for benchmarking.