What is denial management?
Denial management is the set of routines, owners and metrics a hospital uses to handle each denial and keep it from happening again. It starts with the health plan's statement and ends when the cause is fixed at the source.
A denial is a health plan's (operadora's) refusal to pay all or part of an item or a claim submitted by the hospital. In Brazil it covers what US teams call denials, underpayments and line-item adjustments. The concept, the types and the rules are in the pillar guide Claim denials. This guide covers the process: who does what, in what order and how to measure it.
The process in six steps, from the remittance to the root cause
Denial management has six linked steps, and each one feeds the next. The flow uses the messages of the TISS standard (Troca de Informação de Saúde Suplementar, the health plan data exchange standard), which Brazil's National Supplementary Health Agency (ANS), the health plan regulator, makes mandatory for data exchange between hospitals and health plans [1].
See the steps as a table
| Step | What happens |
|---|---|
| 1. Review and reconcile | TISS claim review statement checked against what was billed and paid |
| 2. Triage | Items sorted by health plan, reason (table 38), amount and deadline |
| 3. Analysis | Administrative: billing · Clinical: physician or nurse auditors |
| 4. Appeal | TISS appeal message, with protocol number |
| 5. Follow-up | Response, payment of reversed amounts, write-off of accepted denials |
| 6. Root-cause fix | Recurring reason goes back to the source area (front desk, authorization, medical record, billing), with an owner and a deadline |
- Review and reconcile. The claim review statement (demonstrativo de análise de conta) lists the claims in the batch and, for those reviewed, only the denied items, each with a reason code from table 38 of TUSS (Terminologia Unificada da Saúde Suplementar, the standard's unified terminology) [1][7]. The team checks it against what was billed and against the payment statement.
- Triage. Each item is sorted by health plan, reason, amount and appeal deadline. A valid denial (the hospital's error) is fixed and not appealed; the rest are ranked by amount and due date.
- Analysis. Administrative denials (registration, authorization, code, price, deadline) go to billing; clinical ones (medical necessity) go to physician or nurse auditors. The output is a decision to appeal or accept, with the evidence gathered.
- Appeal. The hospital appeals item by item through the TISS standard, which provides four messages (appeal, protocol, status request and response); the protocol number proves receipt [1]. See the guide Denial appeals. When a clinical denial goes to a meeting with the payer's auditor, the agreement only counts if it is recorded in signed minutes and goes back into the TISS appeal. The guide How to negotiate with the payer's auditor covers the technique and a minutes template.
- Follow-up. Status checked, response logged and reversed amount matched to payment. What is not reversed is written off as accepted denial, with the decision on record.
- Root-cause fix. Each recurring reason goes back to the area where it started, with an action plan, an owner and a deadline.
Who does what? The owner matrix
Each step needs someone who does the work and someone who decides. The split between administrative and clinical denial, a market convention rather than an ANS definition, shapes how roles are split. The guide Types of denials covers each type.
The matrix is illustrative and should be adapted to each hospital. R = responsible; A = approves or decides; C = consulted; I = informed.
| Step | Billing | Physician audit | Nurse audit | Front desk and authorization | Revenue cycle lead | Legal and contracts |
|---|---|---|---|---|---|---|
| 1. Review and reconcile | R | A | ||||
| 2. Triage | R | C | C | A | ||
| 3. Administrative analysis | R | C | A | C | ||
| 3. Clinical analysis | I | R | R | A | ||
| 4. Appeal | R | R (clinical) | R (clinical) | A | C (across-the-board or contractual) | |
| 5. Follow-up | R | I | I | A | C (appeal with no response) | |
| 6. Root-cause fix | R (billing) | C | C | R (registration and authorization codes) | A | R (contract clauses) |
Two practices make the matrix work. First, one owner per health plan, from statement to payment, so no appeal gets lost between teams. Second, clinical audit by the right professional: Resolution 720/2023 of the Federal Nursing Council (Conselho Federal de Enfermagem, Cofen) lists denial appeals among the nurse auditor's activities [8], and physician audit follows the rules of the Federal Council of Medicine (CFM), covered in the guide Physician audit. When the reason is an incomplete medical record, the fix depends on clinical staff, and a denials committee is often the forum for it.
Deadlines: what RN 503/2022 requires and how to build a calendar
RN 503/2022 sets no deadlines in days. Its art. 14 requires the contract to set out the audit routine, the cases that allow a denial, and the periods to appeal, to respond and to pay after a reversal, with the appeal period equal to the health plan's response period [2].
It also forbids blocking access to the reasons for each denial or blocking the appeal (art. 5, V and VI), when billing follows the current TISS version [2]. Details are in the guide Denial appeal deadlines.
The contract deadline becomes an internal calendar. An illustrative example, for a hypothetical contract with 30 days to appeal:
| Internal milestone | Day, counted from the statement |
|---|---|
| Review and reconcile | By day 3 |
| Triage, with each item's deadline | By day 5 |
| Analysis and evidence | By day 20 |
| Appeal sent, with protocol number | By day 25 |
| Follow up on the response | End of the response period (equal to the appeal period) |
Missing the deadline has its own code in TUSS table 38: 2909, “appeal deadline expired” [7]. The ANS is discussing a new rule on contracts (Public Consultation 170/2026, closed on July 3, 2026); as of October 17, 2026, the final resolution had not been published [9].
Which KPIs to track, and what each source measures?
The KPIs measure how much is denied, how much is recovered and how long the money is held up. Benchmarks only compare when the numerator and denominator match the source.
| KPI (source of the definition) | Formula | Benchmark |
|---|---|---|
| Initial denial, management basis (Anahp [4]) | Amounts denied and still under negotiation ÷ amounts receivable from health plans | 15.89% (2024) and 15.93% (2025) [3][4] |
| Accepted denial (Anahp [3]) | Denial accepted as a loss ÷ gross health plan revenue | 1.72% (2025); 1.61% in Q1 2026, vs. 1.66% in Q1 2025 [3][10] |
| Initial and final denial (ANS [5]) | First (or last) denied amounts on closed claims ÷ amount billed on them × 100 | By health plan |
| Average time to payment (ANS [5]) | Average days between the billing protocol and the last payment of each closed claim | By health plan |
| Claims with no response after 30 days (ANS [5]) | Claims with nothing paid or denied 30 days after the protocol ÷ claims sent × 100 | By health plan |
| Denial ratio (ANS, rating program indicator 4.4, base year 2024 [6]) | 0.75 × (amount denied ÷ amount billed) + 0.25 × (providers with denials ÷ providers exchanging TISS data) | Top score at or below the 15th percentile of the segment |
| Reversal rate (internal) | Amount recovered ÷ amount appealed, only once appeal deadlines have closed | Target from own history |
| Missed-deadline rate (internal) | Denial past the deadline with no appeal ÷ initial denial | Should trend to zero |
| Repeat rate by reason (internal) | Denial with the same table 38 code this month ÷ average of the 3 prior months | Measures the effect of step 6 |
For the ANS, a closed claim is one where paid plus denied is equal to or greater than the amount billed. The ANS does not receive the denial reason, so the dashboard does not separate administrative from clinical denial [5].
Do not divide the figures of the National Association of Private Hospitals (Associação Nacional de Hospitais Privados, Anahp): the bases differ, and in 2022 the accepted denial used total net revenue [3]. The real loss is higher than the accepted denial, because hospitals also accept discounts in settlements [3]. Formulas and targets are in the guide Denial rate; the timing of each measure, in Initial and final denials; industry figures, in Industry data.
The root-cause fix closes the loop
Without step 6, the hospital appeals the same failure every month. The rule is to link each table 38 code to the area where the error starts, with an owner and a target.
| TUSS table 38 code [7] | Source area and owner | Fix at the source |
|---|---|---|
| 1001 — Invalid member ID number | Front desk | Check the ID card and eligibility at scheduling and admission |
| 1414 — Authorization code expired | Authorization team | Expiry alert and extension request before the deadline |
| 3292 — Quantity above the authorized amount | Authorization and nursing | Check the authorized quantity before use |
| 3217 — Missing or insufficient justification | Physicians and nursing | Record the clinical justification at the point of care |
| 3209 — Duplicate procedure or item | Billing | System edit before submission |
| 3214 — Billed outside the contract deadline | Billing | Track the submission deadline by health plan |
See Common denial reasons and TISS denial codes. A contractual reason, such as an across-the-board denial, is fixed in negotiation (RN 503/2022: what the payer contract must say).
What we see in operations
At Accrua, denial management starts at the remittance statement and ends at the source, as this guide describes. Agents reconcile each statement with the claim sent, classify the denial by its TUSS table 38 code and queue the work by the dispute deadline set in the contract, so no appeal is left behind because time ran out.
In the ownership matrix, the split is written into the contract with the hospital. Agents draft the appeal with the evidence the health plan asks for and track status and response deadlines. Accepting the denial or dropping the appeal is a biller's or auditor's decision, made with everything gathered and sourced: clause, price table, health plan rule and the relevant part of the medical record. Every action, by an agent or a person, stays in an audit trail.
The loop closes with a fix at the source. When the same code keeps coming back, the rule behind it becomes a pre-submission check, matching the claim against that health plan's contract and history. What we learn in one appeal feeds the next claim.
Where to start
- Map the current flow across the six steps and flag where no owner exists.
- Build the owner matrix, with one owner per health plan.
- Turn each contract's deadline into an internal calendar, with a buffer before the appeal deadline.
- Pick five KPIs with written formulas: initial denial, final denial, reversal rate, missed-deadline rate and repeat rate by reason.
- Take the three costliest reasons of the month to their source area, with an action plan and a deadline.