Your Denials Are Getting Worse While the Rate Fight Got Better
By Dr. Devon Boswell, DBA
Last summer, home health operators built their 2026 budgets against a proposed 6.4 percent Medicare rate cut. What arrived in November was minus 1.3 percent. The industry fought for five months, organized every association in the sector, and clawed back more than five points of rate.
That fight was worth fighting. But here is the math nobody wants to do: what your agency banks is the rate, times your volume, times the share of billed care you actually collect. The first got five months of national argument. The second is a referral problem. The third is decided in your own office, every week, and it is getting worse.
Denials are climbing while nobody watches
First-pass denial rates have risen from 7.5 percent in 2023 to 9 percent through July of this year, and home health runs highest of all at 13 percent, according to McKnight’s Home Care. Those are claims the payer rejected on first submission. Every one of them is cash you delivered care for and have not been paid for yet, if you get paid at all.
Put that next to the rate fight. Getting from minus 6.4 to minus 1.3 took a coalition. Moving your own denial rate down four points takes a daily huddle and someone who owns the intake checklist. One of those costs you nothing. The other one you already paid for.
The payers deny, you do not appeal, and then you write it off
Medicare Advantage is the hard edge of this. KFF analyzed the federal data and found that Medicare Advantage plans denied 3.4 million prior authorization requests in 2022, 7.4 percent of all requests, a larger share than in any recent year. Then the striking part: only one in ten of those denials was ever appealed. Of the appeals filed, 83.2 percent resulted in the denial being overturned.
Read that again. More than eight out of ten appealed denials get reversed, and nine out of ten are never appealed at all. In my professional judgment, that is not a payer problem. That is an office problem. Agencies are leaving collectible money on the table because nobody owns the appeal workflow.
Most of the errors are yours, and that is good news
CMS reported a 6.7 percent improper payment rate for home health in the 2024 reporting period, representing a projected $1.1 billion. Of those improper payments, 51.4 percent traced to insufficient documentation and another 33.7 percent to medical necessity. An improper payment does not mean fraud. It means the payer could not confirm the claim was payable from what the record showed.
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That is actually the encouraging part. More than half of the improper payments come down to documentation, which is entirely inside your control. The note said the patient was homebound but never explained why leaving home takes considerable effort. The plan of care was stated but not properly supported. The skilled need was real, but the clinical reasoning connecting the patient’s condition to the service never made it into the record. The reviewer cannot supply context that was never recorded.
Denials do not start at submission
Here is the uncomfortable truth this whole problem is built on, and I see it in my consulting work constantly: denials do not start at submission. They start upstream, in the eligibility check that was skipped, the authorization that expired, the notice of admission that went out late, or the code that did not match the visit notes. By the time the denial arrives, the error is weeks old.
Five moves that put the work upstream, where it actually prevents denials:
- Audit claims before they go out, not after they come back. Run a 20-point pre-submission check on every batch: eligibility, authorizations, NOA dates, coding against visit notes. The check that catches a 20-point error before submission costs minutes. The same error caught at appeal costs weeks.
- Log every denial the day it arrives. Classify the root cause and track the appeal deadline. A denial log is how you find out your denials are not random, they are the same three payer-rule errors repeating. In my experience, most agencies are surprised by what the first month of honest logging shows them.
- Track authorizations and NOAs in one place. Every active authorization with an expiry flag. Care should never go on hold because paperwork lapsed. If your authorization tracker lives in someone’s head, it does not exist.
- Make appeal the default, not the exception. With 83.2 percent of appeals overturned, not appealing is a financial decision you are making without doing the math. File with evidence, follow up, and track your recovery rate.
- Give credentialing a pipeline owner and a weekly follow-up rhythm. New agencies sit in credentialing limbo, fully staffed and ready to serve, unable to bill. A pipeline tracker with red, yellow, green flags on quiet payers turns “we submitted it months ago” into a managed process.
None of this requires a bigger budget. It requires a system.
The uncomfortable comparison
The rate went from minus 6.4 to minus 1.3 through collective effort, and that was real. But your denial rate is yours alone, nobody else can fix it, and right now it is drifting the wrong direction at 13 percent first-pass for home health. That is the number to watch. It is also the number you can move.
I built The Payer Credentialing and Denial-Prevention Kit around exactly this discipline: a credentialing pipeline tracker, a pre-submission billing audit, a denial log and appeal tracker, an authorization and NOA tracker, and an A/R aging dashboard, with a plain-language playbook and a seven-day quick start. The trackers show value in the first week. The denial patterns take about a month of honest logging to emerge.
Your rate is negotiated. Your volume is marketed. Your collection rate is managed. Manage it.
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