Why Denials Are Increasing and How Hospitals Can Get Ahead of 2026 Trends

Across the country, hospitals and provider groups are experiencing a steady rise in claim denials. These increases are driven by payer policy changes, documentation gaps, new CMS requirements, and rapidly evolving utilization controls. As organizations prepare for 2026, improving denial prevention strategies is becoming essential for financial stability.

Prior Authorization Requirements Are Expanding

Payers continue to add prior authorization requirements for imaging, outpatient surgeries, specialty care, behavioral health, and emerging treatment pathways.

Common root causes include:

• Missing or mismatched authorization numbers

• Unapproved settings of care

• Incomplete clinical justification

• Delays in communication between teams

Organizations that centralize authorization workflows see significantly fewer downstream denials.

Medical Necessity Standards Are Becoming Stricter

Payers are adopting more specific definitions of medical necessity, often tied to clinical pathways or benchmark guidelines. This can lead to denials when notes are:

• Too general

• Missing required elements

• Not clearly connected to the diagnosis or treatment plan

Clearer documentation reduces this risk immediately.

Documentation Gaps Are Creating Avoidable Denials

Many denials stem from missing or unclear clinical notes, particularly in:

• Outpatient surgeries

• Behavioral health integration

• Chronic care management

• Emergency department visits

• Ancillary services like PT/OT/ST

Teams benefit from standardized templates and cross-department training.

Eligibility and Plan Changes Are More Frequent

With redeterminations and updated verification policies across states, more patients are shifting plans or losing coverage temporarily.

This results in:

• Eligibility-related denials

• Out-of-network surprises

• Incorrect payer routing

Real-time eligibility checks remain critical.

Payer Behavior Is Changing Faster Than Teams Realize

Payers adjust turnaround times, appeal windows, and adjudication patterns regularly — often without notice.

Hospitals need tools that show:

• Payment delays

• Underpayments

• Denial spikes by code or service line

• Trends across payers

This is where technology, like RevNav, becomes essential.

How Hospitals Can Get Ahead

A proactive strategy includes:

• Daily denial pattern monitoring

• Standardized documentation practices

• Early identification of payer outliers

• Stronger communication between provider, billing, and compliance teams

• Technology that tracks payer performance and highlights emerging issues

With denials rising across the industry, organizations that respond early protect cashflow, reduce administrative burden, and improve patient financial experience.

MRS can help your team identify root causes, strengthen workflows, and use data to prevent future denials.