What Is a Good First-Pass Claim Rate for a Medical Practice?
It's Thursday afternoon. The remittance file comes in, and there it sits again: a claim from three weeks ago, denied because the patient's insurance changed in January and nobody caught it at check-in. Your biller fixes it in four minutes. The money shows up a month late, if it shows up at all.
Multiply that by a few dozen claims a month and you start to see why billing teams watch one number closer than any other: the first-pass claim rate.
What is a good first-pass claim rate?
A good first-pass claim rate is 95% or higher. At 95%, at least 95 of every 100 claims your practice submits get paid on the first try, with no corrections, resubmissions, or appeals. Below 90%, rework starts eating your biller's week. The strongest billing teams run at 98% or better.
What does the first-pass claim rate measure?
Your first-pass claim rate tracks the share of claims a payer accepts and pays the first time you send them. The formula:
First-pass claim rate = claims paid on first submission ÷ total claims submitted × 100
If you sent 1,200 claims last month and 1,104 went through without a touch, your rate is 92%.
You'll hear two close cousins of this number. Your clean claim rate counts claims that clear the clearinghouse and payer edits without a rejection. Your first-pass resolution rate goes a step further and counts only claims the payer paid in full on the first adjudication, so it runs a little lower. Pick one definition, write it down, and measure it the same way each month. After six months of consistent tracking, you'll know whether your fixes are working.
Where does your practice stand?
First-pass claim rate | What it means |
|---|---|
Below 85% | A process problem at the front desk or in coding. Cash arrives late, and rework fills your biller's calendar. |
85% to 94% | Workable, with room to improve. Sort your denials by reason code and start with the biggest group. |
95% to 97% | You meet the benchmark most revenue cycle standards use. |
98% and up | Top-tier billing. Denials get rare enough to work one at a time. |
What does a denied claim cost your practice?
More than the claim itself. Change Healthcare's Revenue Cycle Denials Index, cited by MGMA, put the average cost to rework a single claim at $25.20. That figure covers staff time: pulling the chart, fixing the error, resubmitting, and following up. Our guide to claims denial management walks through the full appeal process once a denial lands.
Run the numbers for a practice that submits 2,000 claims a month:
90% first-pass rate | 99% first-pass rate | |
|---|---|---|
Claims that come back | 200 | 20 |
Rework cost at $25.20 each | $5,040 | $504 |
Staff hours, if each takes 15 minutes | 50 | 5 |
The 90% practice spends about $4,500 more each month in staff time, and that's before you count the claims your team never gets to. Change Healthcare's research has found that as many as 65% of denied claims never get resubmitted. Your practice earned that money and walks away from it.
The same research found that 86% of denials are potentially avoidable. You can prevent most of that cost before a claim ever leaves your office.
Why do claims fail on the first pass?
The Denials Index broke down where denials start. Registration and eligibility errors caused 27% of them. Missing authorizations caused another 11.6%, and services the plan didn't cover made up 10.6%. About half of all denials trace back to the front end of the visit, before a provider ever walks into the exam room.
A wrong member ID. A plan that changed on January 1. A referral that expired last Tuesday. Your front desk can catch each of these in under a minute at check-in, and your biller needs weeks to chase them after the fact.
How can you raise your first-pass claim rate?
You don't need new software to move this number. You need a few habits your team repeats every day:
Verify eligibility before every visit. Run it 24 to 48 hours ahead, then confirm the card at check-in. Coverage changes most often at the start of the year and when patients change jobs.
Confirm prior authorizations before the service. Keep a list of the procedures and payers that require one, and match the authorization number to the scheduled date.
Scrub claims before they go out. Your practice management system or clearinghouse can check each claim against payer edits. Turn those edits on and fix what they flag.
Code with certified coders. Coding errors cut both ways. Undercoding leaves money on the table, and overcoding invites audits. See what certified coding specialists do for the details.
Review denials by reason code every week. Sort the report by reason and fix the biggest group first. If eligibility denials top the list, start at the front desk.
Work that report every week and fix the root cause along with the claim. When your front desk changes how it checks insurance cards, watch next month's report for the eligibility line to shrink.
How does TRACT keep claims clean on the first pass?
TRACT started as a private billing group. Physician groups in Tulsa built it to run their own billing, and for more than 30 years they paid for denied claims out of their own revenue. When a denied claim costs you your own money, you learn to stop it before it leaves the office.
Our coders hold AAPC, CIRCC, and RCC certifications. Our staff works claims follow-up and denial management by hand, an area many larger billing firms overlook. When you have a question, you call a manager at our office on East 41st Street, and you won't sit in a phone tree to reach one.
If your first-pass rate sits below 95%, or you don't know your number yet, we'll walk through where your denials come from and what it would take to fix them. Call us at (918) 747-4975 or request a consultation. And if you're in Tulsa, come see us. We give tours.
Frequently asked questions
Is first-pass claim rate the same as clean claim rate?
The two overlap. Clean claim rate counts claims that pass clearinghouse and payer edits without a rejection. First-pass resolution rate counts only claims the payer paid on the first submission, so it runs a little lower. You can track either one, as long as you measure it the same way each month.
How do I calculate my first-pass claim rate?
Divide the number of claims paid on first submission by the total number of claims submitted in the same period, then multiply by 100. For example, 1,104 claims paid out of 1,200 submitted gives you a 92% first-pass rate.
What is a good claim denial rate?
If 95% or more of your claims pass on the first try, your combined rejection and denial rate stays at 5% or less. Treat a denial rate above 10% as a signal to review your front-end process and your coding.
How often should a practice review its first-pass rate?
Review the rate monthly and your denials by reason code weekly. The monthly number shows your trend. Use the weekly denial report to pick your next fix.
Does outsourcing medical billing improve the first-pass rate?
It can, if the billing company verifies eligibility, codes with certified staff, and works denials by hand. Ask any billing company you're considering for its first-pass rate, how it measures it, and what it does with the denials that come back. For the other numbers to require from a partner, read how to outsource revenue cycle management without losing control.
Sources: Change Healthcare 2020 Revenue Cycle Denials Index, as cited by MGMA (denial causes, 86% of denials potentially avoidable, $25.20 average rework cost); Change Healthcare research on unworked denials (65% never resubmitted); HFMA MAP Keys (clean claim rate definition).
