One in Five Patients Denied Care: Why This Matters to Every Medical Practice

By Elena Pak, Credentialing Department, WCH

A new survey from the Commonwealth Fund found that one in five privately insured Americans reported that they or a family member had been denied coverage for physician-recommended care within the past year. While the finding has generated headlines, the more important question for healthcare providers is this: What happens after the denial?

For medical practices, denial-related delays are no longer just a patient satisfaction issue. They affect clinical outcomes, staff productivity, revenue cycle performance, and ultimately the financial stability of the organization.

The Growing Gap Between Clinical Judgment and Coverage Decisions

The Commonwealth Fund survey examined two types of denials:

• Prior authorization denials, which occur before care is delivered.
• Claims denials, which occur after services have already been provided.

Among privately insured adults, 13% experienced a prior authorization denial and 8% experienced a claim denial. While these numbers may appear manageable on paper, the consequences are significant. Forty-one percent of patients whose care was denied through prior authorization reported treatment delays, and 28% said their health condition worsened as a result.  For providers, these statistics confirm what many practices already experience daily: administrative review processes increasingly influence clinical timelines.

When insurers override or delay physician recommendations, practices often find themselves serving as intermediaries between patients and health plans. Staff spend hours gathering documentation, responding to requests for additional information, scheduling peer-to-peer reviews, and managing appeals. The result is a growing administrative burden that rarely generates reimbursement.

The Hidden Revenue Cycle Cost of Denials

Most discussions about denials focus on patient access to care. However, the operational impact on providers may be just as significant.

Every denied authorization or claim triggers additional work:

• Eligibility verification reviews
• Medical necessity documentation requests
• Coding audits
• Appeal preparation
• Follow-up communications with payers
• Patient billing inquiries

What makes this particularly frustrating is that many denials are eventually overturned.

According to the Commonwealth Fund survey, only about half of affected patients appealed a denial. Yet among those who did, more than half ultimately received some form of coverage approval, either for the originally recommended service or an alternative treatment.

For providers, this raises an important question: if a substantial percentage of denied services are eventually approved, how much administrative effort is being spent processing decisions that may not have been appropriate in the first place? Many revenue cycle leaders now view denial management as a permanent operational function rather than an exception-handling process.

Patients Are Feeling the Financial Impact

The study also highlights a growing financial consequence of claim denials. Nearly 70% of patients who experienced a claim denial reported increased household expenses, while 43% said the denial contributed to medical debt that they were still paying off.  This trend has direct implications for provider organizations.

Patients facing unexpected bills are more likely to:

• Delay future care
• Cancel appointments
• Enter payment plans
• Become self-pay balances
• Generate additional customer service interactions

In other words, denials often create downstream revenue challenges that extend far beyond the original claim. For practices already struggling with rising accounts receivable and patient collection difficulties, denial prevention becomes increasingly important.

Why Appeals Remain Underutilized

One of the most revealing findings from the survey is not the denial rate itself, but the low appeal rate. Approximately half of patients who received a denial never challenged the decision. Common reasons included confusion about the appeals process, uncertainty regarding their rights, and skepticism that an appeal would be successful.  Providers encounter similar obstacles.

Many smaller practices simply lack the staffing resources necessary to pursue every questionable denial. When reimbursement amounts are relatively small, organizations often face a difficult choice: spend staff time on an appeal or absorb the loss and move on. Unfortunately, this dynamic can create a cycle where avoidable denials become normalized.

What Practices Can Do Now

While providers cannot eliminate payer denials entirely, they can reduce their impact through a more proactive strategy. Several approaches are becoming increasingly important:

Strengthen front-end verification Many denials originate from eligibility, authorization, or documentation issues that can be identified before services are rendered.

Track denial patterns by payer Aggregating denial data can reveal recurring trends associated with specific health plans, service lines, or authorization requirements.

Standardize appeal workflows Creating templates, documentation checklists, and escalation protocols can improve efficiency and increase overturn rates.

Educate patients Patients who understand their appeal rights are more likely to participate in the process and support necessary documentation efforts.

Invest in denial analytics Practices that monitor denial root causes often identify operational improvements that prevent future revenue leakage.

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The Commonwealth Fund findings arrive at a time when scrutiny of prior authorization practices is intensifying across the healthcare industry. Policymakers, provider organizations, and patient advocates continue to call for greater transparency and standardization in coverage determinations.

Whether regulatory reforms materialize or not, one reality is already clear: denials are no longer isolated administrative events.

They affect patient outcomes, create financial hardship, increase operational costs, and place additional strain on provider organizations already facing workforce and reimbursement pressures.

For medical practices, denial management is no longer simply a revenue cycle concern. It has become a clinical, financial, and patient experience issue that requires organization-wide attention.

Sources

1. Commonwealth Fund. How Health Insurance Coverage Denials Affect Americans: Findings from the 2025 Affordability Survey and Focus Groups (June 2026).
2. Healthcare Dive. 1 in 5 U.S. Adults Denied Doctor-Recommended Care: Commonwealth Fund (June 2026).
3. HR Dive. 1 in 5 U.S. Adults Denied Doctor-Recommended Care, Commonwealth Fund Finds (June 2026).
4. American Hospital Association News. Survey Finds 1 in 5 Privately Insured Adults Reported Coverage Denials for Doctor-Recommended Care (June 2026).
5. Healthcare Finance News. Coverage Denials Tied to Medical Debt Among Privately Insured Adults (June 2026).