Revenue Cycle Management

RCM Vendor Evaluation Criteria for Independent Practices

Practices need vendors built for 2024's denial environment, not yesterday's metrics.

Altair Health 31 August 2026

Choosing a billing vendor on 2019 criteria means evaluating against the wrong decade.

Initial claim denials reached 11.81% of claims in 2024, per Kodiak Solutions data drawn from more than 2,100 hospitals and 300,000 physicians. Kodiak also notes payers ultimately pay roughly 90% of claims, which suggests initial denials work partly as a cash-flow lever rather than a coverage judgment.

A vendor that performs well against that environment is doing different work than one that performed well five years ago. Six things are worth testing.

The metric problem: why vendor numbers cannot be taken at face value

Every vendor reports a denial rate. Almost none define it the same way.

The first question is what counts. Some vendors report only hard denials and exclude clearinghouse rejections, which never reached the payer. A vendor advertising a low single-digit rate on that narrower basis can have a functional rate several times higher once rejections fold back in.

The second is what the denominator is. A rate calculated on submitted claims differs from one calculated on billed encounters, and the gap is where dropped claims hide.

The third is timing. A denial rate measured at 30 days looks better than the same book measured at 90, because the slow denials have not landed yet.

Ask for the definition in writing before comparing anything. Then ask for clean claim rate alongside it, since a vendor can suppress a denial rate by submitting fewer claims.

Where denials originate, and the front-end checks that separate preventive vendors from reactive ones

Most denials start as something preventable rather than as a coverage dispute. A vendor whose value is working denials after they land is selling rework rather than prevention.

The front-end questions are specific. Does the vendor verify eligibility more than once, or only at scheduling? Does it check the authorization against the exact procedure, date range, and rendering provider being billed? Does it scrub against the payer's current policies, and how does it learn that a policy changed?

Experian Health's 2025 State of Claims survey found that 26% of providers trace at least one in ten denials to intake errors. The same survey found 68% of providers saying clean claims are harder to submit than a year ago. Front-end capability is where a denial rate actually gets decided. Our claims scrubbing guide covers what a complete pre-submission check includes.

What real-time visibility means, and why month-end reporting is too late

Ask when the vendor sees a denial, not whether it reports one.

A vendor that ingests the 835 on arrival classifies the denial the same day. A vendor that posts remittances in batches finds it days later, with the appeal clock already running.

The appeal evidence comes from prior authorization rather than claims, but the pattern is stark. Medicare Advantage insurers denied 4.1 million prior authorization requests in 2024, and only 11.5% of those prior authorization denials were appealed, with 80.7% of the appeals overturned, per KFF. KFF notes these are service determinations rather than payment decisions on care already given. Four in five challenged denials still failed to survive the challenge, and most were never challenged.

Commercial claims tell a similar story. A 2022 Premier survey of 516 hospitals found that 54.3% of private payer denials were eventually overturned, at an average of $43.84 per claim in appeal labor.

The second question is who can see it. If the owner has to request a report and wait for someone to run it, that is a reporting relationship, not a transparent one. Ask whether the owner sees every claim and every dollar as it moves.

Payer-specific memory as a vendor asset

The same denial code does not mean the same thing at every payer, and the fix that clears it at one insurer can do nothing at another.

Payer behavior varies more than most evaluations assume. KFF found HealthCare.gov insurers denied 19% of in-network claims in 2024, with Oscar Health at 25% and Elevance at 8%. A vendor that handles every payer the same way underperforms on the hard ones.

So ask where that knowledge lives. In most billing operations it sits in one staffer's head, and it leaves when they do.

The question to put to a vendor is concrete: when a payer changes a documentation requirement, how does the next claim to that payer find out? If the answer involves someone remembering, the practice is buying a person rather than a system.

Our payer guides cover the requirements payer by payer, which is a reasonable baseline for what a vendor should already know.

How AI changes what a vendor can do, and what it does not replace

Automation handles volume well. Eligibility checks at scale, claims checked against current policies, denials classified the moment the remittance lands, deterministic corrections sent back without a person touching them.

It runs into limits at the edges. Ambiguous plan language, a policy change the payer's own system has not propagated, a documentation judgment that needs reading rather than pattern matching.

The failure modes on both sides are worth naming. A vendor selling pure automation writes off the cases its model cannot resolve, without telling you which those were. A vendor selling pure staffing will work those cases well and lose the volume game, because the reason denials go unworked is attention, not skill.

Ask which decisions the software makes alone, which a human reviews, and what happens to a claim the automation cannot resolve. A vendor that cannot answer that has not thought about it.

Integration requirements that protect existing workflows

The last criterion is what the practice has to change.

A vendor requiring a new EMR, practice management system, or clearinghouse is charging a migration on top of the service. Migrations are where practices lose months of clean revenue.

Ask whether the vendor works with the systems already in place. Then ask what staff still do daily once it is live. Software the front desk operates is not a service. It is a tool with a subscription.

Altair works with every EMR, practice management system, and clearinghouse on the market, and the practice hires no one and manages no one. See how Altair compares against named vendors.

Six things worth testing, and the question that tests them

Common questions