Howard Speaks: The Denied Dollar by Dr. Howard Farran, DDS, MBA

Where does the money go after a claim is rejected?

by Dr. Howard Farran, founder, CEO and editor-in-chief of Dentaltown magazine

Each Howard Speaks article is written by Dr. Howard Farran with the assistance of AI. Every piece is developed, reviewed, and refined under Farran’s direction to ensure it reflects his authentic voice, insights, and experience.

A dental office submits a claim. The treatment is complete, the code entered, the documentation attached. Then the claim comes back denied. For most practices, this happens so routinely that denials have become part of the background noise of dentistry. But federal transparency data reveal something worth examining. Some dental plans report remarkably large numbers of denied claims while reporting almost no formal appeals.

The easy conclusion is that insurers are denying enormous amounts of legitimate dentistry and dentists are simply accepting it. The data do not prove that. What they reveal may be more important. Dental insurance generates enormous administrative friction, and we know surprisingly little about how much legitimate practice revenue disappears inside it.


What does a 30% denial rate mean?
Delta Dental of Arizona provides a useful example. In its Affordable Care Act transparency disclosure for 2025, Delta reported receiving 49,171 in-network claims and denying 14,651, approximately 29.8%. Nearly three out of every 10 sounds extraordinary. But “denied” does not mean “unnecessary treatment.”

The Centers for Medicare & Medicaid Services uses a broad definition. Denials can include duplicate claims, incorrect billing, patient ineligibility, partial denials, and other administrative problems. Delta Dental of Arizona says its figures also include noncovered benefits and claims exceeding annual maximums. CMS reporting can also operate at the individual service line level. A claim containing several procedures can therefore contain both paid and denied services.

So a 30% denial rate does not mean Delta determined that 30% of clinically appropriate dentistry should not be performed or paid. But that does not make the number harmless.

Every rejection consumes resources. Someone must interpret the EOB, find documentation, correct the claim, upload a radiograph, call the insurer, resubmit it, bill the patient when permitted, appeal when appropriate, or eventually write off the balance. Multiply that friction across thousands of claims and even technically legitimate denials become a serious practice management problem.


What happens after the denial?
The Arizona numbers become more interesting when followed downstream. Delta reported 14,651 in-network denials and 3,111 resubmissions, but only 25 formal internal claim appeals. Seven of those appeals were overturned. Delta also reported one external claim appeal, which was overturned. That does not mean dentists challenged only 25 denials.

A corrected claim is not necessarily an appeal. Neither is submitting a missing radiograph, fixing eligibility information, calling provider relations, or resubmitting documentation.

CMS defines formal appeals much more narrowly than it defines denials. The denial bucket is broad. The appeal bucket is narrow. That makes statements such as “Delta denied thousands of claims and nobody appealed” potentially misleading. The better question is what happened between denial and final disposition.

How many claims were corrected and paid? How many were legitimate exclusions? How many became patient responsibility? How many became contractual provider write-offs? Most importantly, how many otherwise payable claims were abandoned because another hour of staff time was not worth chasing another $100? The federal data cannot tell us. That is the missing number.


Coverage is not diagnosis
Dentists and patients frequently interpret an insurance denial as a clinical judgment. Often it is not.

Delta Dental of Nebraska makes this distinction clear in its transparency materials. The insurer determines whether a procedure qualifies as a covered benefit under the patient’s contract. The dentist determines appropriate treatment.

A crown can be clinically necessary while producing no insurance benefit. The same applies to periodontal treatment, implants, prosthetics, and other procedures.

“The insurance company says you don’t need this crown” is therefore very different from “Your insurance contract does not provide a benefit for this crown under these circumstances.” The first gives the insurer authority over diagnosis. The second accurately describes a financial contract. That distinction matters in every treatment presentation.


When the dentist gets stuck with the bill
An unpaid insurance claim does not always become a patient balance. Sometimes the patient owes it. Other times the service is genuinely noncovered, or the participating provider agreement requires the dentist to absorb the loss. This becomes particularly complicated when clinical criteria and insurance criteria diverge.

A dentist may diagnose periodontitis based on probing depths, clinical attachment loss, bleeding, radiographic findings, and risk factors. An insurer may require narrower documentation or benefit criteria before paying for scaling and root planing.

The dentist can be clinically justified in treating the disease while the patient’s insurance contract provides no benefit. The dangerous moment occurs when the patient mistakes lack of insurance coverage for lack of disease. The dentist still owns the diagnosis.


Sometimes the system really is wrong
A high denial rate alone does not prove misconduct, but a regulatory investigation can. In December 2024, the Washington state Office of the Insurance Commissioner announced enforcement action against Delta Dental of Washington and its health care benefit manager, Wyssta.

Regulators found claims had been processed using time and frequency limitations that were not contained in approved insurance contracts. The investigation identified 23 claims affecting 17 people, while seven service types had processing limitations involving 50 billing codes. The claims systems were subsequently corrected, and the two companies were fined a combined $130,000.

This was limited in scale and cannot reasonably be extrapolated across Delta nationally, since the independent Delta companies operate under different contracts and policies.

But the Washington case establishes something important. Claims processing rules can be wrong. That is why documentation and appeals matter. One disputed claim can reveal a processing problem affecting many patients and practices.


Start tracking the denied dollar
Most dental offices manage denials one patient at a time. Practices should instead treat them as data. Which CDT codes generate the most denials? Which carriers generate them? Why? How often does resubmission result in payment? How much staff time does recovery require? How much money ultimately gets written off?

Without those numbers, dentists can make opposite mistakes. They can blame insurers for problems caused by their own eligibility verification, coding, documentation, or follow-up. Or they can assume denials are simply part of doing business and quietly abandon collectible revenue. The useful metric is the final disposition of the denied dollar, not the initial denial rate.


The real question
Delta deserves scrutiny because of its enormous reach. Delta Dental Plans Association represents 39 independent Delta Dental companies and describes the system as the nation’s largest dental benefits provider, with approximately 152,000 participating dentists.

But the bigger investigation should extend beyond Delta. Using identical CMS definitions, researchers should compare dental insurers by carrier, state, year, procedure, and denial reason. If Delta consistently produces substantially higher denial rates than comparable carriers, that matters. If most dental insurers show similar patterns, then dentistry has uncovered something larger than a Delta problem. It has uncovered a structural problem in dental benefits administration.

The provocative statistic is that some dental plans initially deny close to 30% of reported claims. The more important question comes afterward. What happened to the money?

Some denials are legitimate. Some are office errors. Some are corrected and paid. Some become patient responsibility. Some are contractual write-offs. Regulators have demonstrated that some can result from improper claims processing.

What nobody seems to know is how much legitimate revenue disappears because recovering it costs more than the payment itself. Perhaps that is the number dentistry should start measuring.

How much money does your practice write off each year simply because fighting for it costs more than collecting it?