Notes on payer behavior
Denial recovery companies: what they do, and how to choose one
A denial recovery company works the insurance claims your practice was denied for a fixable reason: missing information, an authorization that was on file, a late-filing denial you can prove. The better ones also check the payments that looked fine, where underpayments and downcodes hide. Choose on three things: what they find, who files, and what you get to see.
Denials are the pain every practice feels. Industry-wide, about one claim in nine is denied on first submission (Experian Health measured 11.8% in 2024), and providers report nearly 15% of claims to private payers denied at first (Premier). Most of those are administrative, not clinical. Premier also found private payers overturned more than half of the denials providers fought. The problem is the fighting: someone has to build each case, file it before the deadline and chase the answer. That's the work a denial recovery company takes on.
What a denial recovery company actually does
- Sorts the denials. Separates the fixable, administrative ones (registration, authorization, coding and bundling, timely filing) from true coverage limits and clinical disputes.
- Builds the case. The authorization number and approval date, the acceptance report that proves the claim went in on time, the insurer's own policy for that date of service.
- Files and follows up. Appeals and corrected claims go in before each insurer's deadline, then get tracked to a decision and a payment.
- Looks past the denials (the good ones). Paid claims that came in short, or a visit paid a level down, never show up as denials. They close at zero balance and look finished. See the zero-balance problem, and what a payment audit, as opposed to a coding audit, checks.
Four ways practices handle denials
| Option | Works well when | Watch for |
|---|---|---|
| Your billing team or billing company | Denials are few and the team has time to appeal them | Older and smaller denials get written off when the queue is long. Ask them these six questions about underpayments |
| Denial software | You have staff to work what the software flags | Software finds and drafts; someone on your side still files and follows up |
| Outsourced AR or denial team | A larger group wants extra hands on its existing queue | They work the list you give them; they don't look for what nobody flagged |
| Done-for-you recovery firm | Nobody has time to fight denials and short payments | Ask who files, under whose name, and what you can see |
Seven questions to ask any denial recovery company (including us)
- Which denials do you work? Administrative only, or clinical too? Get the list in writing.
- Do you find problems, or only work the list we hand you? The money nobody flagged is usually the bigger pool: underpayments and downcodes on claims that look paid.
- Who files, and under whose name? A firm acting as your authorized representative files in the practice's name. You should approve the scope first.
- What will we see, and how often? Every finding, every appeal filed, every insurer response and every dollar that lands, with the paper trail. Ask for a sample of the dashboard or report.
- What do you cite? The strongest appeals cite the insurer's own policy in effect on the date of service, plus your contract or fee schedule.
- How do you handle deadlines? Windows differ by payer and plan type. Medicare's first-level appeal is due within 120 days of the initial decision (42 CFR 405.942); commercial windows vary, and in Florida, a claim for underpayment must reach the payer within 12 months after it paid the claim (section 627.6131; see Florida's 12-month underpayment rule). Our working table: Florida payer appeal deadlines.
- How are you paid, and on what? A share of what they recover, a percentage of all collections, per claim or a subscription. Make sure the fee applies to money they recovered, not money you'd have collected anyway.
Signs a firm isn't the right fit
- It won't sign a business associate agreement before any data moves.
- It can't show you what it will report, or how often.
- It wants a long contract for what is really a one-time cleanup.
- It files without your approval of the scope.
Where Clearia fits
Our team starts with the denials piling up, then checks every payment against your contracts and fee schedules for underpayments and downcodes. We file as your authorized representative, in the practice's name, and track every case to a decision. You get your own dashboard and a short morning email, so nothing goes out that you can't see. It starts with a complimentary diagnostic: findings in dollars, by insurer and category, and what's still inside each appeal window. How it works: the process, step by step.
Questions people ask
What does a denial recovery company do?
It works the insurance claims your practice was denied for a fixable reason, such as missing information, an authorization that was on file, or a late-filing denial you can prove. It builds the appeal or corrected claim, files it and follows it to a decision. Some also check paid claims for underpayments and downcoding.
How much does denial recovery cost?
Most firms charge a share of what they recover, a percentage of collections, a per-claim fee or a subscription. Compare what each model charges on: money the firm actually recovered, or money your team would have collected anyway.
Can a denial recovery company work alongside my billing company?
Yes. A good one takes the denials and short payments your biller has no time to chase, works from the same payment files, and leaves claim submission and posting where they are.
Which denials can't be recovered?
Denials past the insurer's appeal deadline, and true coverage limits such as a service the plan excludes. Medical-necessity disputes need clinical review, which many recovery firms, including ours, don't take on.