Many consumers are already confused by medical billing, insurance rules, and claim decisions. New industry data suggests providers are feeling just as much strain. A new vendor analysis released this week shows that hospitals and physician groups are facing significantly higher denial amounts, more payer audits, and growing administrative pressure tied to coding, medical necessity, and missing information.
The findings come from an MDaudit benchmark analysis covering the first three quarters of 2025 and include real-world data from more than 1.2 million providers and 4,500 facilities. The report echoes what many revenue cycle executives have been saying for more than a year: payer pushback is increasing, and the financial impact is accelerating.
Denied Claim Amounts Climb Across Care Settings
The average value of a denied hospital claim rose sharply this year:
- Hospital inpatient denied amounts increased 12%.
- Hospital outpatient denied amounts rose 14%.
- Medicare Advantage denials increased 22.4%, averaging about $1,000 per claim.
Professional claims fared slightly better, with a modest decline of 1.3%, but coding-related issues, missing information, and documentation gaps continued to fuel preventable denials.
Denials tied to requests for information or medical necessity were especially costly. The average amount tied to these denials increased by 70% to roughly $450. Telehealth-related denials rose even faster at 84% year over year.
Payer Audits Becoming More Frequent and More Expensive
External payer audits saw a substantial jump:
- At-risk amounts increased 30% per customer year over year.
- Average at-risk amounts reached about $17,000 in hospital settings and $1,172 in professional settings.
- Commercial payers accounted for 45% of all at-risk dollar volume.
Hospitals most commonly faced audit requests tied to coding errors, medical necessity, and billing mistakes. In professional settings, missing information was the leading driver.
Coding Problems Continue to Escalate
Outpatient coding-related denials increased 26% compared to 2024, compounding last year’s 126% spike. Diagnosis coding errors, incorrect modifiers, and insufficient medical record support were the biggest contributors.
Given ongoing coding shortages and increased use of autonomous coding tools, the report warns that weak governance over emerging technologies may create additional financial risk.
