Blog Categories: Medical Billing

In 2025, healthcare providers continue to experience a rise in prior authorization denials—impacting both patient access and provider revenue. With denial rates climbing and payer expectations becoming more complex, the role of utilization management has become a central focus in ensuring both clinical and financial outcomes.

While many healthcare organizations monitor utilization-related data, very few fully leverage it to drive strategic improvements.

At Revesolv, we work closely with providers to identify and act on the utilization management key performance indicators (KPIs) that truly make a difference across clinical performance, compliance, and revenue cycle optimization.

Why Utilization Management KPIs Are Essential in 2025

Healthcare continues its shift toward value-based models, but authorization delays and denials remain a barrier to both treatment and timely payment.

Recent regulatory updates now require faster responses to urgent care requests, clearer denial communications, and increased involvement from medical professionals in decision-making. In this environment, tracking the right metrics allows providers to:

• Detect potential revenue loss before it occurs

• Align clinical and billing teams around shared goals

• Prevent denials through informed documentation

• Improve payer relationships with evidence-based negotiation

• Optimize both patient outcomes and operational performance

The 7 Utilization Management KPIs That Matter Most

1. Prior Authorization Denial Rate

This KPI tracks how many authorization requests submitted to insurance payers are denied. Every denial not only delays treatment but also increases administrative workload and impacts revenue.

High denial rates usually indicate one or more of the following:

• Missing or unclear documentation

• Submission errors or outdated processes

• Inconsistent understanding of payer-specific requirements

Breaking this metric down by payer, provider, and service type helps uncover patterns and target specific issues for correction.

2. Medical Necessity Denial Rate

One of the most frustrating reasons for claim denial is when a procedure is deemed “not medically necessary.” Often, the care was appropriate – but the documentation did not match the language or standards required by the payer.

Improving this KPI requires:

• Collaboration between clinical, coding, and billing teams

• Regular review of denied claims to understand common failures

• Staff training on how to align clinical notes with payer expectations

When done well, improving this metric not only reduces denials but also strengthens internal documentation practices.

3. Appeal Success Rate

This metric measures how often your organization successfully overturns denied claims through the appeal process. A high appeal success rate may indicate that many initial denials could have been avoided.

By studying successful appeals, healthcare organizations can:

• Learn what additional information or documentation influenced the reversal

• Adjust original submissions to avoid the need for appeals

• Train teams to strengthen first-pass approval rates

Appeal success rate is a powerful tool to identify hidden weaknesses in initial claim preparation and address them proactively.

4. Concurrent Review Compliance

This KPI measures how consistently your organization performs clinical reviews throughout a patient’s hospital stay—not just at the time of admission or discharge.

Delayed reviews often lead to denials on the day of discharge—when there’s little time left to correct the issue. Proactive reviews during the patient’s stay help:

• Identify potential denial risks early

• Improve coordination between clinical and administrative teams

• Ensure that care being delivered is both appropriate and authorized

Instead of reviewing all cases equally, successful organizations prioritize complex, high-cost admissions where early intervention makes the biggest impact.

5. Utilization Management Cost per Case

Many organizations spend significantly on managing the utilization process—through staff, technology, and outsourced partners—but few know the average cost per patient case.

This KPI reveals:

• Where manual processes are driving up costs

• Whether technology investments are delivering expected savings

• If resource allocation is appropriate for the complexity of cases being reviewed

Lowering the cost per case without compromising quality is key to sustainable operations in a high-volume healthcare environment.

6. Impact on Length of Stay / Avoided Length of Stay

Utilization management plays a critical role in how long a patient remains admitted. This KPI tracks whether utilization management efforts are helping to reduce unnecessary length of stay without compromising care.

By monitoring this metric, providers can:

• Improve patient flow and avoid capacity issues

• Set up alerts for extended admissions based on care benchmarks

• Measure the cost savings of earlier discharges driven by proper reviews

This KPI ties the administrative side of utilization management to measurable clinical and financial outcomes.

7. Utilization Management Automation Rate

Manual utilization management processes—like faxing, logging into multiple payer portals, and phone calls—consume significant staff time and increase errors.

This KPI tracks what percentage of utilization management workflows are handled automatically through digital systems.

Key automation opportunities include:

• Routine prior authorizations for high-volume procedures

• Real-time eligibility verification

• Automated tracking and status updates

• Seamless integration of authorization responses into clinical systems

Higher automation rates result in faster turnarounds, fewer denials, and reduced workload on administrative teams.

Turning KPIs into Action

Metrics are only powerful when they lead to decisions. To get the most out of your utilization management KPIs:

• Investigate unusual spikes or dips—these often signal workflow or payer issues

• Connect related metrics—for example, high denial rates and low automation often go hand in hand

• Involve both clinical and financial leaders in regular reviews

• Set realistic, measurable improvement goals for each KPI

• Use technology to close gaps without overburdening your team

Final Takeaway

In 2025, utilization management has evolved from a back-office task to a strategic function that influences care delivery, payer relationships, and financial outcomes.

Healthcare providers that focus on the right utilization management KPIs consistently see:

✅ Fewer denials and faster approvals
✅ Stronger documentation and cleaner claims
✅ Reduced administrative burden
✅ Improved financial performance
✅ Better patient care access

At Revesolv, we help transform utilization management from a compliance necessity into a performance advantage. Through targeted metric tracking, denial prevention strategies, and automation, we empower healthcare organizations to gain control over their revenue cycle.

Let’s uncover the story your data is telling – and turn it into results.

Top CARC Codes and Proven Strategies for Claim Accuracy

The financial stability of a healthcare organization hinges on one critical factor – getting paid accurately and on time. Yet, denials continue to challenge even the most efficient practices.

According to the American Hospital Association:

• 78% of healthcare organizations report worsening experiences with commercial payers

• 84% face increasing administrative burdens to meet insurer requirements

• 95% confirm that staff time spent on prior authorizations has significantly risen

These are not just operational inefficiencies – they directly impact your revenue cycle, staffing, and patient experience.

Why Understanding Denials Is More Than a Billing Issue

A denied claim is more than a delay; it’s a breakdown in process. Every denial means:

• Lost revenue if not followed up correctly

• Increased workload for staff to investigate and appeal

• Patient dissatisfaction if financial responsibility shifts unexpectedly

• Delays in cash flow, affecting day-to-day operations

By understanding Claim Adjustment Reason Codes (CARC) and applying targeted strategies, organizations can reduce denial rates, improve claim accuracy, and safeguard their bottom line.

What Are CARC Codes

CARC codes are standard identifiers issued by payers to explain why a claim has been denied, reduced, or adjusted. They help uncover the root cause of payment issues and guide providers in correcting and preventing similar errors.

According to the American Medical Association (AMA), 8 – 10% of healthcare claims are denied, and a large portion of these can be traced to common CARC codes – errors that are often avoidable with the right systems and strategy.

Top 10 CARC Codes – and How to Avoid Them

Below are ten of the most frequently encountered CARC codes, along with actionable strategies your team can use to prevent them:

1. Missing/Incorrect Modifier (Denial Code 4)

A modifier indicates how a service was performed or altered. Missing or incorrect modifiers result in claim denials and delayed payments, especially for bundled services or same-day procedures.

Strategy:

• Stay updated on payer-specific modifier requirements

• Use coding software with validation rules to flag missing/invalid modifiers

• Train coders regularly on modifier usage and payer policies

2. Missing or Incomplete Information (Denial Code 15)

Claims are submitted with missing or incomplete information. This oversight can lead to claims being rejected, delaying reimbursements and potentially disrupting your revenue cycle. Addressing these gaps efficiently minimizes processing delays and repeated denials.

Strategy:

• Train your team to thoroughly review payer-specific requirements to ensure all required information is included in claims.
• Utilize advanced RCM systems to flag incomplete or missing data prior to claim submission.
• Implement regular quality checks and audits of your claims process to ensure accurate and complete documentation.

3. Age Conflict (Denial Code 6)

This occurs when a procedure code doesn’t match the patient’s age, such as a pediatric code used for an adult.

Strategy:

• Validate patient demographics at registration and prior to service

• Use software that flags age-inappropriate procedures

• Train front-desk teams to catch demographic mismatches early

4. Expenses Incurred After Coverage Terminated (Denial Code 27)

Billing for services rendered after a patient’s insurance has lapsed leads to immediate denial.

Strategy:

• Verify coverage before every visit or procedure

• Use real-time eligibility checks through your RCM software

• Implement a workflow to update insurance info during scheduling

5. Diagnosis/Procedure Mismatch (Denial Code 11)

This happens when the diagnosis code does not support the medical necessity of the procedure performed.

Strategy:

• Use ICD-CPT crosswalk tools to verify alignment

• Educate billers on clinical documentation improvement (CDI)

• Perform post-bill audits to catch recurring mismatches

6. Claim/Service Lacks Information (Denial Code 16)

Generic denials like this mean some element of the claim—CPT code, diagnosis, provider ID—is missing or inaccurate.

Strategy:

• Automate claim integrity checks before transmission

• Create a pre-submission checklist for billers and coders

• Enable real-time error alerts in your RCM platform

7. Coordination of Benefits (COB) Issue (Denial Code 22)

If multiple insurances are not listed or prioritized correctly, the claim is denied.

Strategy:

• Ask patients to verify all active insurance policies

• Automate COB rules and sequence validation in your system

• Re-train front-office staff on COB best practices

8. Charge Exceeds Maximum Allowable (Denial Code 45)

The billed amount exceeds what the payer allows, often leading to partial reimbursement or full denial.

Strategy:

• Cross-check services with the payer’s fee schedule before billing

• Inform patients about potential out-of-pocket costs upfront

• Offer pre-service financial counseling to manage expectations

9. Deductible Not Met (Denial Code 97)

Payers deny or reduce payment because the patient hasn’t met their annual deductible.

Strategy:

• Verify deductible balances before the visit

• Inform patients of their financial responsibility clearly and early

• Implement point-of-service collections for smoother cash flow

10. Adjustment Due to Overpayment (Denial Code 197)

The payer reduces current payments to compensate for a previous overpayment.

Strategy:

• Reconcile payments regularly to catch overpayment trends

• Contact payers proactively to resolve discrepancies

• Inform patients of adjustments if their balances are affected

Denial Management Is a Strategic Necessity

According to the Journal of Health Information Management, healthcare organizations that implement automated denial management and training programs can see up to 20% fewer denials.

Proven Strategies That Drive Down Denials:

Automate Early Validation
Implement smart RCM platforms that flag missing demographics, incorrect codes, or expired insurance before the claim is sent.

Educate Continuously
Billing and front-office teams must stay updated with ever-changing payer policies. Invest in ongoing, structured training.

Use Denial Analytics
Track CARC trends by payer, department, and procedure to identify systemic gaps in your processes.

Streamline Eligibility & Authorization Workflows
Make pre-checks and pre-authorizations part of your standard operating procedure.

Maintain Transparent Payer Communication
Proactively resolve issues through timely follow-ups and clear documentation.

How Revesolv Helps You Stay Ahead

At Revesolv, we understand that managing revenue cycle complexities can be overwhelming and time-consuming for healthcare providers. That’s why we offer expert strategic support, guiding you through every challenge related to claim denials, eligibility checks, and reimbursement processes.

Our team works behind the scenes to handle these critical but intricate tasks efficiently, so your staff can dedicate their full attention and energy to what truly matters – caring for your patients. By partnering with Revesolv, healthcare organizations can reduce administrative burdens, improve cash flow, and enhance overall operational efficiency without diverting focus from patient care.

Our goal is to help you minimize preventable denials, accelerate payment cycles, and strengthen your financial health –building a resilient revenue cycle that supports sustainable growth.

With Revesolv’s strategic guidance and industry expertise, you gain a trusted ally who navigates the complexities of revenue management alongside you, turning potential revenue disruptions into opportunities for success.

What Is Telemedicine?

Telemedicine uses video or telephone communication to connect patients with a medical professional for the exchange of information electronically. As a patient, you can see your provider in this manner instead of an in-person visit. During a telemedicine visit, the physician can evaluate, diagnose, and treat the patient, including dispensing prescriptions, lab orders, or other orders deemed necessary in the patient’s care. This can all occur over an electronic device such as a smartphone, computer or tablet. The telemedicine visit occurs with the same level of quality and care as it would in person. It is important to keep in mind that outpatient telemedicine visits are not used for emergency-related health concerns such as strokes or heart attacks.

10 Tips

1. Choose your tech. It is helpful to decide ahead of time what device you may use for your telemedicine visit. It can be a computer, laptop, smartphone, or tablet. It may also matter if it is Apple, Google, Windows, or Android-based. Having a reliable internet connection is also important.

2. Set up prior to your appointment. Make sure you ask your physician’s office about any technology setup that may need to occur ahead of your telemedicine visit. This may include downloading an app or creating a new account. You should also ask for a contact number in case there is a problem during your telemedicine visit. Doing this will reduce the stress of managing new technology during the actual telemedicine visit.

3. Choose a quiet, private place. Find a place for your appointment that is quiet so you can hear your physician, and they in turn can hear you. This will reduce distractions and interruptions, making your appointment more productive.

4. Prepare your medical history. Just as in an in-person visit, having an accurate medical history available is helpful for your physician during their evaluation. This would include any personal or family history, environmental history, lifestyle, and job history. Having this information available ahead of time will make for an efficient telemedicine visit and give your physician important information to give you the best care possible. Sometimes your provider’s office may contact you in advance of the visit to obtain some of this basic information.

5. Prepare paperwork ahead of time. You may receive paperwork containing information to complete ahead of your telemedicine visit. This may include a list of medications you take, your primary physician contact, pharmacy contact, insurance information, consent for telemedicine, or payment information.

6. Obtain vital signs. If you can, it is helpful to obtain vital signs prior to your appointment. If you have an electronic blood pressure cuff, you can obtain blood pressure and heart rate. You can take your weight and temperature as well at home and report during your telemedicine visit. You can also take pictures of any rashes or conjunctivitis you have questions about. This information will be helpful as your doctor evaluates you during your telemedicine visit.

7. Be prepared for co-pays. It is important to be aware that most insurance companies consider a telemedicine visit comparable to an in-person visit and are therefore possibly subject to the same co-pays and payments.

8. Write down questions ahead of time. The stress of a new type of visit can be a distraction when trying to remember all the things you may want to ask your physician. Writing down important questions you have for your physician ahead of time will help you remember them during your visit.

9. Review your treatment plan. You should review your treatment plan with your physician during your telemedicine visit so you both understand the next steps. It is also helpful to write it down, so you do not forget the plan. Ask any questions about the plan during this time with your doctor.

10. Set up the follow-up. At the end of your telemedicine visit, set up a follow-up visit as necessary.

The Laws are the same for employees and Business Associates working from home

In the past 10 years, the number of employees working remotely in the United States has increased by 115 percent. And with the COVID-19 pandemic requiring many employees to work from home, that number is increasing at a rapid pace. Many of us are suddenly finding ourselves working from home for the first time. The pandemic does not mean we are off the hook with HIPAA privacy and security requirements. On the contrary, we are just as liable as if we were working in the office.

Create a HIPAA-Compliant Work-space

Although certain HIPAA sanctions are being waived during the current health crisis, that does not excuse us from mishandling patients’ protected health information (PHI. We must take the same physical and security measures to safeguard the PHI we are trusted with within our work.

Here are some best practices to follow:

• Ensure your home wireless router traffic is encrypted and password protected.
• Change default passwords for wireless routers.
• Encrypt and password protect personal devices you may use to access PHI such as cell phones and tablets.
• Computer programs containing patient information should be closed and logged out of when not in use. Lock your screens when walking away from your computer.
• Do not share sensitive PHI with others who shouldn’t have access, including co-workers and personal acquaintances.
• Only access a patient’s record if needed for work.
• Avoid printing PHI; however, if necessary, keep all PHI, such as patient paperwork, charts, and records, locked away and out of view.
• Never leave patient information out where unauthorized persons may see it.
• Minimize the ability for others to overhear patient information, for example, saying a patient’s whole name out loud within hearing distance of others.
• Do not allow friends, family, etc., to use your devices that contain PHI.
• Limit email transmissions of PHI to only those circumstances when the information cannot be sent another way. At a minimum, use encryption tools (most businesses provide tools to send encrypted emails).
• Never share passwords between staff or family members.
• Immediately dispose of information containing PHI when no longer needed by shredding paper files.
• Use a privacy screen on your monitor(s).

As coders, billers, auditors, compliance officers, managers, or other healthcare providers, it’s a blessing to live in an age of technology in which we can work from home. Take the time to review your organization’s HIPAA Privacy and Security policies. Work with your IT department to ensure your home office is HIPAA compliant. Be safe and live well.

Diagnostic provider leadership teams understand the importance of revenue cycle management (RCM) for maximizing reimbursement promptly. Submitting clean claims is one of the most important ways that a diagnostic organization can ensure payment in a timely manner from both private and government insurance payors. Receiving the maximum reimbursement the first time a claim is submitted is crucial to achieving desired operating margins.

How diagnostic providers define a clean claim varies significantly. Some consider claims clean even when they have no apparent errors on the front end even though they may ultimately result in denials in the back end. Allowing claims to be labeled as “clean” when they contain errors means that an organization will never have the analytical insights necessary to improve the quality of the claim information they receive. In its simplest form, a clean claim should be defined as one that has no errors or omissions and can be processed without additional information or verification of information by a human, third-party service, or automation.  A clean claim contains all of the following correct information:

• Each procedure code has a supporting diagnosis code that is not expired or a deleted code
• There are no potential issues or questions regarding medical necessity
• The patient’s coverage was in effect on the date of service
• The patient’s insurance covers the service provided
• The claim submission includes all the required patient information such as full name, mailing address, and date of birth
• The claim identifies the payer, including the correct payer identification number, group number, and mailing address
• All required claim information is in the correct field
• The claim is submitted within the timely filing window

To measure how a diagnostic organization is performing when it comes to RCM, an important metric to track over time is the “clean claim rate.” This measure quantifies the rate at which insurance claims have been successfully processed and reimbursed the first time they were submitted. This means it contained no errors, rejection, or need for manual input of additional information. To achieve a high clean claim rate, organizations have traditionally had to work claims manually to:

• Retrieve missing patient information
• Correct errors or information in the wrong fields
• Validate insurance eligibility
• Follow up with physician offices for supporting information.

Submitting clean claims means the claim spends less time in accounts receivable, less time at the payer, and the laboratory or other diagnostic provider gets paid faster. Experts across the industry agree that a clean claim rate should exceed 90 percent. However, based on an analysis performed by XIFIN, specific to laboratory claims, approximately 35 percent of all diagnostic procedures have errors that need correction before they can be reimbursed. This translates to upwards of $20 billion per year in either delayed or permanently lost reimbursement in the US alone. XIFIN also found that 12 percent to 20 percent of all requisitions lack a payer-specific ICD-10 or other information resulting in partial or full claim denial. Many organizations choose to write off these uncollected claims rather than incur the labor costs associated with achieving a clean claim. In contrast, leading organizations are maximizing their clean claim rates and reducing their bad debt without an increase in labor costs by leveraging automation. Real-time connectivity and error correction, integrated patient demographic and insurance discovery, automated supporting document attachment, and portal-enabled patient and client communications all improve clean claim rates without human intervention.

Above and beyond clean claim rates, laboratory and other diagnostic provider leadership teams will find it exceedingly valuable to have analytical insights that:

• Indicate the most significant financial impact or anomalies (either negative or positive) based on a month over month change in allowed amounts by payer and volume
• Demonstrate the number of claims being processed without human intervention as compared to the claims that had errors that required manual intervention
• Identify which team members are performing or (underperforming) on specific actionable error codes and how the fixes are impacting reimbursement rates
• Highlight which physicians and ordering clients are causing the most issues in the billing process due to missing or invalid information that was needed for the claim

Another critical measure of a diagnostic organization’s revenue cycle performance is its “write-off rate.” Write-offs happen when the amount collected for a claim is lower than the contracted pay rate. Under current accounting rules, the amount of those discrepancies should be recorded as bad debt, thus reducing revenue by the unpaid amount. Many legacy billing systems, however, incorrectly attributed the discrepancies to contractual allowance. Consequently, these organizations saw a falsely low bad debt rate and failed to identify potentially recoverable revenue. Relegating under- and non-payments to contractual allowance is not only against current accounting rules but also erases the opportunity to attempt recovery. So while no organization enjoys a higher bad debt rate, the good news here is that correctly identifying these amounts as (potentially recoverable) bad debt, rather than the contractual allowance, enables a laboratory to take steps to recover this otherwise lost revenue.

It is clear that a low level of clean claims directly contributes to higher write-off rates and, thus, lower revenue, profit, and margin. It is a challenge for labs and other diagnostic providers to be promptly reimbursed if they lack accurate patient data. Too often, labs write off balances if they don’t have all of the information needed to get the claim paid, especially if it is a low-value claim. This can be particularly impactful for laboratories associated with hospitals and health systems. More laboratory claims tend to be written off in these cases because the average value of each claim is quite low when compared to other hospital- or health system-related claims.

To ensure that claims are getting handled correctly to maximize timely cash collection, billing and finance leaders can start by asking their revenue cycle management team, the following key questions about write-offs:

• What percentage and dollar amount of my claims end up written off (i.e., what is our write-off rate)?
• Are our claims subject to automated write-offs based on a dollar amount threshold set in the system?
• Are automated write-offs of our claims categorized as bad debt, since no effort to collect has been attempted?

Finally comes the question: Are we using the best RCM system to maximize our clean claims, minimize write-offs, and thus optimize our revenue, profit, and margin? Here are a few questions to ask on that front:

• Does our RCM system automate the correction and completion of patient demographic data?
• Does our RCM system has automated insurance discovery that corrects and completes insurance information?
• Does our RCM system allow the automatic attachment of supporting documentation to minimize denials?

Only by maximizing the clean claims rate and minimizing the write-off rate can a laboratory or other diagnostic provider maximize revenue. A goal of zero percent write-offs is not practical, however. For some very small claims or unpaid balances, the effort to reclaim the reimbursement outweighs the value of the outstanding balance. But an optimized RCM solution with proper automation will help laboratories and other diagnostic providers cost-effectively maximize clean claims and minimize write-offs. This is one of the very best ways to thrive in today’s challenging healthcare landscape.

Primary care practices are at serious risk of closing as patient volume and Revenue continue to decline during the Covid 19 Pandemic.

Primary care practices are facing significant financial challenges as a result of the COVID-19 pandemic, leaving 20% of practices without the resources they need to remain open beyond the next four weeks.

Close to 46% of the over 2,600 primary care physicians, nurse practitioners, and physician assistants surveyed were unsure if their practice will have enough cash to keep their practices open for the next four weeks. About 42% also reported concerns about layoffs and furloughed staff, with an overwhelming majority 85% noticing sharp decreases in patient volume.

Primary care practices are hoping to receive external financing support to keep their businesses open. Practice is likely to apply for a Small Business Administration loan in the next four weeks.

The Small Business Administration also reported that it is no longer able to accept new applications for the Payroll Protection Program. The program was a key effort from the federal government to keep small businesses operating during the COVID-19 pandemic.

Policymakers are currently devising a fourth coronavirus stimulus package, which could include $450 billion for small businesses and hospitals hurt by COVID-19, national news sources reported earlier this week.

However, primary care practices also need help with virtual care in order to survive the economic hit from COVID-19, the survey showed.

In the survey, 65% of respondents reported having patients who cannot use virtual health because they lack a computer or internet access.

Additionally, full-scale use of virtual platforms is still limited, with just 34% relying on the majority use of video, 15% on e-visits, and 19% on patient portal use. In comparison, 48% of primary care clinicians conduct the majority of visits by phone, the survey found.

Overall, 22% of practices reported no use of video visits, 42% reported no use of e-visits, and 28% does not use patient portals.

But even practices leveraging virtual care to alleviate patient volume challenges during the pandemic are unsure they will get paid for the services, they were uncertain they will receive reimbursement for virtual care.

About 44% of respondents were also unsure if their practice would get reimbursed for conducting visits over the phone.

Medicare has lifted restrictions related to virtual visits for physicians during a national emergency. But Medicare’s decision to reimburse practices for virtual care for beneficiaries does not guarantee reimbursement among private payers.