Eligibility Denials: A Major Challenge for Hospitals and Health Systems

[SSI Preventing Eligibility Denials Series: Part 1 of 3]

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March 13, 2023

Denials are one of the most expensive revenue cycle issues, posing major concerns to revenue cycle leaders throughout the country. Today, one in five medical claims are denied or delayed leading to unnecessary operational costs and delays in reimbursements for hospitals and health systems, and confusion and frustration for patients. Let’s take a look at some of the statistics.

There is no single root cause for denials, nor is there one single trouble area. Problems that lead to denied claims occur throughout the revenue cycle but routinely point to eligibility.  

Registration/eligibility denials are the number one cause of medical claim denials. To prevent eligibility-related denials, hospitals must prioritize insurance eligibility verification.



Hospital denial rates have increased by more than 20% over the past five years, reaching 10% or more on average. 1


It costs $25 – $118 to rework a single denial, according to various studies.


85% of denials are preventable. 2


21% of denials are registration/eligibility-based. 3

Effectively preventing denials can yield upwards of 5 million in additional revenue for a typical hospital. 4

1. Mckeon, Jill. Over Third of Hospital Execs Report Claim Denial Rates Nearing 10%. RevCycle Intelligence. Xtelligent Healthcare Media, June 7, 2021
2. https://www.healthcarefinancenews.com/news/more-30-hospitals-are-near-danger-zone-denial-rates.
3. The SSI Group, LLC and other industry data. 2022
4. HFMA, https://annual.hfma.org/2019/Custom/Handout/Speaker0_Session1155_1.pdf



SSI Eligibility eBook cover

The Definitive Guide to Preventing Eligibility Denials

This comprehensive guide from SSI is a must-read for hospitals and health systems looking to improve their eligibility verification process and reduce claim denials related to eligibility issues. It covers the claim denial problem, the state of eligibility solutions in healthcare, and the importance of eligibility verification in denial prevention strategies. Discover best practices for effective eligibility verification and real-world examples, as well as how technology can streamline the process.

Provide your email to get the eBook.

What is Insurance Eligibility Verification?

Insurance eligibility verification refers to the process of checking the status of a patient’s insurance coverage and verifying their eligibility for the requested treatment. This allows healthcare organizations to confirm which payer(s) to send a claim to, closely estimate what a patient will owe for medical services and secure the appropriate payment at the time of service.

Eligibility verification is one of the most critical steps of your revenue cycle management process, heightening your overall financial security. When eligibility verification is not performed correctly or at key points in the cycle, healthcare services and payments can be delayed, and claim denials can occur. If you provide healthcare services without a comprehensive eligibility verification process, you will likely lose money from the start. Additionally, proper network status verification helps you stay compliant with all No Surprises Act rules.

Eligibility verification also benefits patients, allowing them to plan for their financial responsibility, reducing the chance of a surprise, and minimizing unnecessary stress. It helps them better plan for their healthcare services and allows them to seek out other providers if necessary.

Coverage information obtained through insurance eligibility verification typically includes:

  • Patient demographics
  • Status of patient’s policy (active or inactive)
  • Policy effective start and expiration dates
  • Type of plan and coverage details
  • Payable benefits
  • Out-of-pocket expenses (co-pays, coinsurance, and deductibles)
  • Plan exclusions
  • Claims mailing address and electronic payer ID


Benefits of Insurance Eligibility Verification

Insurance eligibility verification is a crucial process for healthcare providers as it offers a range of benefits:

  1. Identifying unknown Medicaid and commercial insurance coverage for self-pay patients
  2. Accurately determining patient responsibility, including co-pays and coinsurance
  3. Managing patient benefits throughout the revenue cycle
  4. Protecting healthcare providers from inactive coverage
  5. Decreasing claim denials and rejected claims
  6. Reducing accounts sent to collections
  7. Avoiding unauthorized services
  8. Increasing patient satisfaction
  9. Accelerating reimbursement
  10. Increasing clean claim rates
  11. Improving staff efficiency
  12. Avoiding bad debt


An effective eligibility verification solution is essential to denial prevention. Talk with a specialist today about your current eligibility verification process and learn how SSI can help reduce claim denials and maximize reimbursements for your hospital or health system.

Download our new eBook, The Definitive Guide to Medical Claim Denial Prevention, to read more about the claim denial problem, real-world results of eligibility verification, and proven eligibility verification solutions.