It’s only February, yet revenue cycle teams are already feeling the heat from rising claim denials. And it’s not just the quantity of denials that’s increasing. In 2025, the average amount denied per claim rose by nearly 20% year over year, making the case for better (read: proactive) denials management.
Medical necessity denials are especially pervasive, requiring the expertise of certified coders, nurses, physicians, and others to be successfully reworked and appealed. With staffing strained and margins thin, RCM teams can no longer afford to tackle these errors retroactively.
IMO Health’s Product Manager of Medical Necessity, Holly Ridge, BSN, RN, CPC, CPMA, explores this topic in our 2026 insight brief, Preventing medical necessity denials in a strained revenue cycle. In it, she breaks down the role of medical necessity, the costs of these denials, and the argument for proactive, upstream guidance.
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Stopping medical necessity denials at the source
The key to improving revenue cycle reimbursement is to identify potential errors upstream, before claims are submitted, rather than reacting after the fact. According to The Advisory Board’s 2024 report, Denial Prevention in the Era of Automation, early prevention can save as much as $10 million per $1 billion in patient revenue.
For many organizations, this means reducing reliance on manual research and policy tracking while adopting denial-reduction technology designed to support – not replace – human expertise. However, not all tech is created equal. The most successful platforms are HIPAA-compliant and provide real-time, clinician-friendly alerts that flag coding errors for review and suggest more accurate ones, rather than making automatic decisions.
