What is the denial rate?

Here’s a payer contracting question that doesn’t get enough attention:

How difficult is it to actually collect the reimbursement we’re negotiating?

A fee schedule can look attractive on paper.

But if claims routinely encounter:

• Authorization issues
• Medical necessity denials
• Eligibility problems
• Coding disputes
• Documentation requests
• Timely filing issues
• Payment discrepancies

…the contracted rate may not tell the whole story.

Consider two payers:

Payer A reimburses $150 per service but requires significant denial management and follow-up.

Payer B reimburses $130 but pays clean claims consistently with substantially less administrative intervention.

Which payer produces the better financial result?

It depends on the net revenue after the cost of getting paid.

This is why leadership should be asking for more than the fee schedule.

Look at:

Clean claim rate.
Denial rate.
Days to payment.
Appeal volume.
Administrative labor.
Actual collections.

The negotiated rate is what the payer agrees to pay.

The collection rate is what the organization actually realizes.

Those aren’t always the same thing.

If leadership isn’t looking at both, they’re only seeing part of the economics.