25 Questions to Ask Before Hiring a Denial Management Company

Quick Answer

Before hiring a denial management company, ask about five things: proven recovery rates in your specialty, how their workflow connects to your EHR and clearinghouse, who actually works your claims, how they price their work, and what happens to root-cause data after a denial is overturned. A vendor that answers all 25 questions below without hesitation is worth shortlisting. A vendor that stumbles on pricing or staffing questions usually has something to hide.

Denials are not a paperwork problem. They are a revenue problem that compounds. Industry surveys put initial denial rates between 10 and 15 percent of claims, and roughly two thirds of denied claims are recoverable, yet most never get worked because staff run out of hours before they run out of denials. That math is why denial management companies exist, and it is also why choosing the wrong one costs twice: once in fees, and again in the appeals that expire while the vendor learns your payors.

This checklist comes from the questions revenue cycle leaders actually ask during vendor evaluations, plus the ones they wish they had asked before signing. Use it as an interview script. Send it ahead of a demo. Any serious vendor has heard most of these before and will respect you for asking.

Track Record and Results (questions 1 to 5)

1. What is your overturn rate, and how do you calculate it?

Every vendor quotes a recovery number. The follow-up matters more: is that overturned dollars divided by dollars appealed, or by total denied dollars received? The first number flatters vendors who cherry-pick winnable claims. Ask for both, and ask for the figure specific to your provider type.

2. Can you share results for organizations like mine?

A vendor that shines with a 900-bed academic center may sink at a 25-bed critical access hospital, and the reverse is just as true. Ask for two or three references matched to your size, specialty mix, and payor mix, then actually call them.

3. Which payors and denial types do you work most often?

Clinical denials, authorization denials, coding denials, and timely filing issues each require different skills. A shop built around Medicare Advantage medical necessity appeals may have thin experience with your dominant commercial payor. Ask them to break down their volume by denial category and payor.

4. What is your average time from denial receipt to first appeal submission?

Appeal windows close fast. Some commercial payors allow 90 days or less, and a vendor that averages 45 days to first touch has already burned half your runway. Get the number in writing and ask how they prioritize claims as the deadline approaches.

5. Have you ever been terminated by a client, and why?

An honest answer here tells you more than any case study. Every established vendor has lost accounts. The ones worth hiring can explain what went wrong and what changed afterward.

Process and workflow (questions 6 to 10)

6. Walk me through the life of one denied claim in your system.

Make them narrate it start to finish: intake, triage, assignment, appeal drafting, submission, follow-up, and closure. Vague answers at any step usually mean that step is manual, inconsistent, or outsourced again to someone else.

7. How do you decide which denials not to work?

No vendor works everything, and that is fine. What you want is a documented threshold logic (balance floors, expected value scoring, deadline proximity) rather than analyst discretion. Their write-off recommendations should come back to you for approval rather than disappear.

8. Who writes your clinical appeals, and what are their credentials?

Medical necessity appeals live or die on clinical argument. Ask whether appeals are written by nurses or physicians, whether they hold coding credentials such as CCS or CPC, and whether the person who writes the appeal for a cardiology denial actually has cardiology chart experience.

9. How do you handle second-level appeals and peer-to-peer reviews?

Plenty of vendors stop after one appeal letter because second-level work is expensive. If peer-to-peer scheduling, external review filings, or state insurance department complaints are out of scope, you need to know that before signing, not after your first batch of upheld denials.

10. What do you need from my team, and how many hours a week will it take?

Denial vendors always need something: medical records, itemized bills, system access, coder input. A vendor that says they need nothing from you is either not being straight or plans to work only the easy claims. Get the expected internal effort in hours to budget for it.

Technology and integration (questions 11 to 14)

11. How do you connect to my EHR and clearinghouse?

The answer separates real integration from swivel-chair work. Direct interfaces or payer portal automation beat nightly spreadsheet exports. If they say remote access to your Epic or Cerner environment, ask who provisions accounts, how access is audited, and what happens when their staff turn over.

12. Where does my data live, and who can see it?

Ask about hosting location, encryption at rest and in transit, offshore access if any, and their most recent SOC 2 report. Request the report itself, not a statement that one exists.

13. What role does automation or AI play in your appeal process, and where does a human review it?

Automated appeal drafting is now common and can be a strength. The question is oversight. Payors are increasingly pushing back on templated appeals, and a boilerplate letter with the wrong patient details can compromise the claim. Ask what percentage of appeals ship without human review. The right answer is zero.

14. Will my team have live visibility into claim status, or do we wait for reports?

A portal or shared worklist beats a monthly PDF. You should be able to see any claim's status, appeal history, and next action date without emailing your account manager.

Staffing and account management (questions 15 to 18)

15. Who exactly will work my account, and where are they located?

The team in the sales demo is rarely the team on your account. Ask for names, locations, and tenure of the people assigned to you, and whether work is performed onshore, offshore, or blended. Offshore models can perform well; the problem is hidden offshore models.

16. What is your analyst turnover rate?

Denial work is specialized and payor-specific knowledge walks out the door with every departure. Turnover above roughly 30 percent a year means you will be retraining your vendor's staff on your own payors indefinitely.

17. How many other clients does my account manager carry?

An account manager spread across 20 clients cannot know your payor mix. Ask for the ratio and ask what triggers an escalation to leadership on their side.

18. How do you train your team on my specific payor contracts and local coverage rules?

Generic appeal knowledge only goes so far. Strong vendors build client-specific playbooks that capture your contract terms, your payors' behavior patterns, and your documentation quirks. Ask to see a sanitized example.

Pricing and contract terms (questions 19 to 22)

19. How do you charge, and what exactly counts as a recovery?

Contingency pricing sounds aligned until you read the definition of recovery. Does a claim that would have been paid on resubmission anyway count? Does a partial payment trigger a full fee? Get the definition in the contract, with examples.

20. Are there minimums, setup fees, or charges for claims you do not collect?

Some agreements carry monthly minimums that quietly turn a contingency deal into a retainer. Others bill for effort on lost appeals. Neither is automatically wrong, but both should be visible before you compare vendors on price.

21. What is the termination clause, and who owns the work in progress?

You want a 60 or 90-day exit without penalty, and clear language that open appeals, documentation, and root-cause data transfer back to you at no charge. Vendors who resist this are telling you how the relationship will end.

22. Will you put a performance guarantee in the contract?

Not every vendor will, and a refusal is not disqualifying on its own. But asking surfaces how confident they are in the numbers from question 1. Some will commit to a floor overturn rate or a fee reduction if targets are missed. That is worth negotiating for.

Reporting and prevention (questions 23 to 25)

23. What does your standard reporting package include, and can I see a sample?

You are looking for overturn rate by payor and denial category, dollars recovered against dollars denied, aging of open appeals, and trend lines over time. A sample report shows you in five minutes what a sales deck hides.

24. How do you feed root-cause findings back to my front-end teams?

Working denials forever is a business model. Preventing them is a partnership. Strong vendors deliver quarterly root-cause analyses that identify the registration errors, authorization gaps, and documentation patterns that generate your denials, and they present them directly to your patient access and CDI teams.

25. If you succeed, my denial volume should shrink. How does your model handle that?

This is the quiet conflict of interest at the center of denial management. A vendor paid per recovery has no financial reason to reduce your denials. The best answer includes prevention services, advisory work, or pricing that evolves as volume falls. Any vendor who looks puzzled by the question has never thought about your long-term interest.

How to use this checklist

Send the full list to shortlisted vendors before demos and ask for written answers. Written responses do three things: they become contract exhibits, they make vendors easy to compare side by side, and they surface the ones who will not commit to anything on paper. In the demo, spend your time on the answers that were vague.

If you are running a formal procurement process, these questions map directly into an RFP structure. RCR|HUB's RFP Access Network lets hospitals and health systems issue RFPs to vetted denial management companies in one place, and the directory lists denial management vendors alongside 94 other revenue cycle categories, so you can build your shortlist and your question set from the same starting point.

Frequently Asked Questions

• How much do denial management companies charge?

  Most work on contingency, typically between 15 and 35 percent of recovered dollars depending on claim age, denial type, and volume. Flat-fee and hybrid models exist, usually for larger health systems. The percentage matters less than how the contract defines a recovery.

• What overturn rate should I expect from a denial management vendor?

  Well-run programs commonly overturn 40 to 60 percent of appealed claims, though results swing widely by denial category and payor mix. Be skeptical of any vendor quoting a rate above 80 percent without explaining which claims they decline to work.

• Should denial management be outsourced or kept in-house?

  It depends on volume and staffing. Organizations with steady denial inventory and available RN or coder time often keep first-level appeals internal and outsource complex clinical appeals or aged inventory. Full outsourcing fits teams that cannot hire or retain appeal-writing talent.

• How long does it take to see results after hiring a denial management company?

  First recoveries usually occur within 60 to 90 days, driven more by payor response times than by vendor speed. Judge the vendor in the first month by implementation quality: system access, workflow setup, and how quickly aged claims are triaged before deadlines pass.