Your Claims Aren’t Being Denied. They’re Being Taken Back.

Why lower denial rates may be hiding a new revenue-cycle problem for medical practices

Here’s a number that should stop any revenue cycle team mid-scroll: hospitals and physician practices saw lower claim denial rates in the first half of 2026. Initial denial rates fell. Final denial rates fell. By the metric most practices have spent years optimizing for, things improved.

Cash flow didn’t.

That’s the finding at the center of a new Kodiak Solutions analysis published September 15, drawing on claims and financial data from more than 2,300 hospitals and 375,000 physicians on the Kodiak Platform, comparing the first half of 2026 to the same period in 2025. Initial and final denial rates both declined. But that progress didn’t translate into better cash performance — because more money was being recouped later in the cycle.

Where the Money Actually Went

The gap sits after the claim gets paid. Kodiak’s analysis found insurers clawed back 1.57% of accounts receivable through takebacks in the first half of 2026, up from 1.38% in the same period a year earlier — a 13.8% increase. A takeback, in Kodiak’s framing, is money an insurer already paid on a claim and later recoups.

That trend held across every payer type and every care setting Kodiak analyzed — it wasn’t concentrated in one line of business.

At the same time, providers got less back when they fought those recoupments. Recoveries after appeal fell to 2.21% of accounts receivable in the first half of 2026, down from 2.48% a year earlier — a 12.2% decline. Put those two numbers together and you get the actual story: insurers are pulling more money back after the fact, and practices are winning less of it back on appeal.

Medicare Advantage Shows a Different Pattern

The analysis found a meaningful gap between how Medicare Advantage plans and traditional Medicare treat claims that, on paper, are supposed to follow the same coverage rules. According to Kodiak, MA plans showed higher initial and final denial rates than traditional Medicare, and more than double the rate of takebacks.

Commercial plans — often run by the same companies that operate Medicare Advantage products — showed a related pattern. The initial denial rate for commercial claims actually fell between the two periods. But the final denial rate rose 9.1%, to 2.89% of accounts receivable, and commercial takebacks rose 12%, to 2.25% of accounts receivable, in the first half of 2026.

Read that carefully, because it’s the part practices are most likely to miss: a payer can look like it’s improving on the metric everyone tracks — initial denials — while getting worse on the metrics fewer people are watching closely.

Why This Matters for Your Practice, Not Just Your Hospital’s CFO

Kodiak’s data set spans both hospitals and practice-based physicians, and the takeback pattern isn’t described as a hospital-only phenomenon. If your practice measures revenue cycle health primarily by denial rate — the number most dashboards lead with — this analysis is a direct challenge to that habit. A falling denial rate can coexist with a worsening cash position, and the difference only shows up if someone is tracking what happens to a claim after it’s paid, not just whether it was paid.

As Matt Szaflarski, Kodiak’s vice president of revenue cycle intelligence, put it in the release, the real question for revenue cycle leaders isn’t just what came in the door — it’s “how much of what we collected did we keep.”

For medical practices, this is where revenue integrity becomes more than a denial-rate metric. WCH helps healthcare providers analyze payer behavior, identify reimbursement risks and strengthen revenue-cycle processes — including the issues that surface after a claim has already been paid.

What to Actually Do About It

Track takebacks as their own line item, not folded into denials. If your billing software or revenue cycle vendor reports denial rate as the headline metric and buries post-payment recoupments in a footnote, you’re looking at half the picture. Ask specifically for a takeback rate as a percentage of accounts receivable, broken out by payer.

Audit your appeal win rate on recoupments separately from your appeal win rate on denials. These are different fights with different evidence requirements. A takeback involves an insurer recouping money after the original claim payment, sometimes following a retrospective review or a coding dispute. If your appeals team’s playbook was built around pre-payment denial appeals, it may not be calibrated for arguing against a claim that was already paid and is now being reopened.

Pay closer attention to Medicare Advantage claims specifically. Given the gap this analysis found between MA and traditional Medicare, practices with a meaningful MA population may want to periodically compare their own takeback experience across payers rather than assuming uniform treatment because the coverage rules are nominally the same.

Don’t treat a falling denial rate as proof the payer relationship is improving. It’s a reasonable leading indicator, but this analysis is a concrete example of it decoupling from what actually lands in the bank. The only way to know your real yield is to track collections net of takebacks over time, not just at the point of initial payment.

Sources