U.S. Healthcare Denial Management Market - Focused Insights 2025-2030

MARKET INSIGHTS

The U.S. healthcare denial management market was valued at USD 5.13 billion in 2024 and is expected to reach USD 8.93 billion by 2030, growing at a CAGR of 9.67% during the forecast period. The market has witnessed exponential growth in recent and upcoming years due to the growing healthcare expenditure, rising claim denials, and technology advancements accelerating the demand for denial management solutions in the healthcare industry.

Denial management in healthcare is the procedure of identifying why insurance claims get denied by insurance payers and then handling and resolving claim denials and preventing them from happening again. This process ensures that healthcare providers get paid on time for the services they offer. This encompasses the management of existing health claims denials and the prevention of future denial to optimize the provider's cash flow. There are several reasons for claim denial, including incorrect patient information, missing documentation, not verifying insurance coverage, duplicate claims, late submission, etc.  

RECENT VENDORS ACTIVITIES

1. In 2022, United HealthGroup’s Optum division acquired one of the largest market players Change Healthcare with a $13 billion transaction. This is one of the major acquisitions registered in the market and it strengthens the market position of United HealthGroup.
2. In 2023, Allscript Healthcare changed its name to Veradigm LLC.
3. In 2021, Kareo – a comprehensive healthcare software provider company is officially merged and rebranded under the Tebra name.
4. In 2021, MRO acquired Cobius Healthcare Solutions which was a pioneer in the development of healthcare denial management solutions.

KEY TAKEAWAYS

1. Market Growth: The U.S. healthcare denial management market was valued at USD 5.13 billion in 2024 and is expected to reach USD 8.93 billion by 2030, growing at a CAGR of 9.67% during the forecast period.
2. By Denials Type: The soft denials hold the largest market share in 2024. The segmental growth is due to an increase in claim submission/billing errors, duplicate claims and lack of documentation.
3. By System Type: The integrated segment shows the highest growth of 9.93% due to integration with EHRs, billing, and practice management, which increases the demand for integrated solutions.
4. By Delivery Mode: The web & cloud-based segment holds the largest market share. Cloud-based systems streamline the claims procedures by automating the submission and tracking of claims, thus helping segmental growth.
5. By End-Users: The healthcare providers segment holds the largest market share. In the U.S., healthcare provider groups are highly seeking healthcare denial management solutions due to the increasing denial rate and associated significant costs of them.
6. By Regions: The Northeast region shows the highest growth of 10.20% due to the highest cost of living, the presence of a significant elderly population, and high-class and advanced hospitals.
7. Growth Factor: The U.S. healthcare denial management is set to grow due to a surge of new technologies in healthcare denial management and attention toward a patient-centric approach to denial management.

MARKET TRENDS & DRIVERS

Health Information Exchange is an Emerging Trend

Healthcare denials often hinder people’s healthcare and result in a loss of revenue for providers. Healthcare Information Exchange (HIEs) become crucial for enhancing claim accuracy and supporting denial management. Sharing patient data across health organizations allows the interoperability of health systems. This unique collaboration enables timely access to accurate patient records, which is important for coding practices and informed billing. By allowing HIEs, health providers can easily verify patient eligibility in real-time, minimizing the chance of incomplete documentation and coding errors. HIEs are also enabling smoother communication pathways between insurers and providers and making it easy to correct discrepancies. It indicates that HIEs have huge potential to reduce claims denials due to inaccurate or incomplete patient information.

Surge of New Technologies in Healthcare Denial Management

In the U.S., healthcare systems face significant challenges in managing healthcare denials from insurance claims. These conditions often lead to financial difficulties for hospitals and medical practices. However, recent advantages in technology, especially Artificial Intelligence (AI) are changing how health organizations approach claim accuracy and denial management. As of 2024, around 45% of U.S. hospitals are using AI in their revenue cycle management (RCM) practices. Denial management is one of the essential parts of RCM. AI supports and automates aspects of claim processing and reduces the burden of administrative tasks for hospitals. AI can analyze vast volumes of claims data to identify patterns and predict likely denials. In addition, by using machine learning (ML), healthcare professionals/providers can proactively identify issues before they arise. AI-driven predictive analytics help to evaluate claims’ chances of denial based on historical data and allow the administrative task force to correct documentation issues and coding errors in advance.

Attention Toward Patient-Centric Approach for Denial Management

Patient information-related denials ranked among the most common hospital claim denials, and they pose a significant burden on patients and their health, as well as cause revenue drain for hospitals. Where patient centricity becomes a leading factor that supports to decline rate of healthcare claim denials. This approach becomes the primary focus for claim denial management for the hospital’s revenue recovery and reputation with patients. According to the State of Claim Survey 2023, missing or inaccurate data is one of the top reasons behind claim denials in the U.S. healthcare claim sector. Missing or inaccurate data is the number one operation challenge responsible for the increase in medical billing claims denials reported by 46% of respondents in the State of Claims 2024 survey in the U.S.

SEGMENTATION INSIGHTS

INSIGHTS BY DENIALS TYPE

The U.S. healthcare denial management market by denials type is segmented into soft denials and hard denials. The soft denials hold the largest market share in 2024. Soft denial is a major type of healthcare denial management. It refers to the temporary rejection or denial of a patient’s health claim, which can be reversed by the provider correcting and resubmitting the claim. Managing soft denials requires identifying the reasons for the denial, making the necessary corrections, and resubmitting the claim to the insurance company. Common causes of soft denials include incorrect or missing information, coding errors, lack of documentation, and charge discrepancies. In the U.S., the frequent occurrence of soft healthcare denials due to these issues drives significant demand for denial management services.

INSIGHTS BY SYSTEM TYPE

The U.S. healthcare denial management market by system type is categorized into integrated and standalone. The integrated system shows significant growth with the fastest-growing CAGR of 9.93% during the forecast period. Denial management integrated with advanced software can significantly enhance denial recovery and workflow efficiency. It leads to noticeable improvements in payment processing and a rapid increase in cash flow. Integrated software enables hospitals to improve cash flow, maximize reimbursements, and reduce administrative burdens. These solutions come equipped with features such as automated reminders, denial classification, AI tools, and other functionalities designed to minimize errors before denials occur. Integrated denial management systems assist providers in coding claims accurately and submitting them on time, either error-free or with resolved issues. Additionally, these solutions reduce the extra cost burden associated with system integration for hospitals and healthcare providers by offering a centralized platform for managing and tracking denials. With comprehensive visibility into denial trends and partnerships, integrated software empowers healthcare professionals and hospitals to implement targeted interventions, further enhancing operational efficiency and financial outcomes.

INSIGHTS BY DELIVERY MODE

Based on the delivery mode, the web & cloud-based segment accounted for the largest share of the U.S. healthcare denial management market. In the healthcare sector, efficient claim management is highly demanded by healthcare providers to ensure timely reimbursements. Cloud-based systems streamline the claims process by automating the submission and tracking of claims. Additionally, web-based systems feature built-in validation checks that help identify missing patient information or errors before claims are submitted, reducing the burden of rework and minimizing the likelihood of claim denials. Web-based denial management systems also facilitate seamless integration with other healthcare systems and tools, reducing the workload of healthcare workers and significantly decreasing the chances of late claim submissions and denials. For instance, web-based medical billing systems often include denial management features designed to pinpoint the root causes of claim denials. The growing preference for web and cloud-based solutions is driving demand for denial management software, making these systems a critical component of modern healthcare operations.

INSIGHTS BY END-USERS

Based on the end-users, the healthcare providers segment holds the largest share of the U.S. healthcare denial management market. Healthcare providers are major end-users that demand solutions. In the US, healthcare provider groups are highly seeking healthcare denial management solutions due to the increasing denial rate and associated significant costs of them. In the healthcare providers segment, including hospitals, clinics, physician’s offices, home health agencies, and other health provider-based groups such as ambulatory care centers, nursing homes, and assisted living facilities. These healthcare settings are increasingly focusing on payment denials by insurance companies. The hospital segment holds the largest market share of 40% in 2024 of the healthcare providers segment. Hospitals are major revenue contributors to the market growth. Around 6,100 hospitals are present in the country and more than 95% of them offer complete healthcare claim services. Hospitals in the US are highly digitalized and have their IT departments. This led to increased demand for denial management systems and software.

REGIONAL ANALYSIS

The Northeast region shows prominent growth, with the fastest-growing CAGR of 10.20% during the forecast period. The Northeast region is one of the leading areas with significant spending on healthcare services and insurance. Factors such as the high cost of living, a substantial elderly population, advanced hospitals, and high operating expenses have driven the increasing demand for denial management solutions. As of 2024, the region is home to more than 1,000 hospitals that offer services for healthcare claims. The majority of these hospitals are highly developed and technologically advanced, driving the demand for automated denial management solutions and creating significant revenue growth opportunities in the coming years.

COMPETITIVE LANDSCAPE

The U.S. healthcare denial management market report consists of exclusive data on 60 vendors. There are several leading, growing, and emerging market players are present across the country. Leading market players are majorly competing against small, medium, and emerging market players. Vendors are also constantly coming up with new technologies to develop, acquire, and market new services and solutions to access a new set of consumers in the market. United HealthGroup, McKesson, eClinicalWorks, Experian, and Veradigm LLC, are some of the leading companies that accounted for major market share in the U.S. healthcare denial management market. These vendors are continuously focused on expanding their portfolio meet to clients' requirements, and international regulations, increasing the efficiency of their products, and strengthening their market position.