Can Better Notes Cut Claim Denials? The Documentation Angle
By Patient Square Team · · 5 min read
Better notes can cut the denials that turn on documentation, and only those. Initial claim denials hit 11.81% in 2024, and two of the fastest-growing categories, medical necessity and requests for more information, trace straight back to whether the record supports the claim. A complete, legible note gives your biller what a payer asks for. We'll be precise about what a scribe touches here, and what it doesn't, because overclaiming on revenue is where this topic usually goes wrong.
To be clear up front: an AI scribe is not a billing tool. It doesn't submit claims, doesn't adjudicate them, doesn't integrate with your clearinghouse. What it does is improve the note that every one of those downstream steps depends on. That's a real lever, narrowly.
Key takeaways
- Initial denials hit 11.81% of claims in 2024, up 2.4%, per Kodiak Solutions (2,100+ hospitals, 300,000 physicians). About 1 in 8 claims bounces first time.
- Two rising denial categories, medical necessity and requests for more information, are documentation-dependent.
- A better note helps the documentation-driven denials only; it does nothing for eligibility, authorization, or timely-filing denials.
- An AI scribe improves the note, not the billing workflow. It does not submit, code, or integrate with claims systems.
initial claim denial rate in 2024, up 2.4% (Kodiak Solutions)
claims denied on first submission, 2024
rising denial categories tied to documentation: medical necessity and requests for more information
How big is the claim-denial problem in 2024?
It's getting worse, and the numbers are first-party from a large dataset.
Kodiak Solutions, analyzing claims from more than 2,100 hospitals and 300,000 physicians, reported that the initial denial rate rose to 11.81% of claims in 2024, an increase of 2.4% over the prior year. Roughly one in eight claims now gets denied on first submission. That's not the final write-off rate, plenty of denials get overturned, but each one is rework, delay, and cost before the money arrives.
What's driving the increase matters for our question. Kodiak found that even as providers cut authorization-related denials by 7.7%, denials tied to medical necessity and requests for more information rose by 5% and 5.4% respectively, more than making up the difference. Those two categories are the documentation-sensitive ones. A payer questioning medical necessity or asking for more information is, in effect, saying the record didn't make the case on its own.
Which denials does documentation actually affect?
Not all of them. This is the distinction that keeps the claim honest.
| Denial type | Documentation-driven? | Can a better note help? |
|---|---|---|
| Medical necessity | Yes | Yes, a note that captures clinical justification |
| Request for more information | Yes | Yes, a complete note answers the question upfront |
| Insufficient documentation | Yes | Yes, directly |
| Eligibility / coverage | No | No, that's a front-desk/verification issue |
| Prior authorization | No | No, that's a process step before the visit |
| Timely filing | No | No, that's a submission-deadline failure |
The pattern is simple: documentation helps where the note is the evidence, and does nothing where the failure happened somewhere else in the process. If your denials are mostly eligibility and authorization, a better note won't move your numbers, fix the front-desk and pre-auth workflow instead. If they're medical necessity and information requests, the note is squarely in play.
How does a better note reduce documentation-driven denials?
By giving the biller and the payer the clinical story, complete and legible, the first time.
A denial for medical necessity or a request for more information is usually a gap: the claim asserted something the record didn't fully support, or the documentation was too thin to stand on its own. The fix is upstream, a note that captures the clinical reasoning, the relevant findings, and the plan clearly enough that the justification is visible without an appeal. When the note is complete, the coder has what they need to bill it cleanly, and if a payer does push back, the record is there to defend it.
This is where an ambient scribe helps, and we'll state the mechanism exactly. AI Scribe by Patient Square is an ambient AI medical scribe that listens during the visit and hands back a structured SOAP note, ICD-10 suggestions, and a prescription draft, ready to review and sign about two minutes after the visit. A note written at consultation pace, while the details are fresh, tends to be more complete than one reconstructed from memory at 9pm, and completeness is what the documentation-driven denial turns on. The ICD-10 suggestions are exactly that, suggestions for your coder to confirm, not a coding engine. The note quality that makes this work is something you can grade yourself with our SOAP-note rubric, and the buyer's view is in how to evaluate an AI medical scribe.
What a scribe does not do for your denials
Here's the boundary, drawn plainly, because this is the part vendors blur.
It doesn't submit or adjudicate claims. AI Scribe by Patient Square has no connection to your billing system, clearinghouse, or payer. It drafts notes. Your existing revenue-cycle process does the rest.
It doesn't code your claims. ICD-10 suggestions speed your coder; they don't replace one, and a scribe that claims to "code your bills" is overselling. We make that distinction at length in how accurate are AI medical scribes.
It doesn't fix process denials. Eligibility, authorization, and timely-filing denials are workflow failures upstream or downstream of the note. A better note can't touch them, and we won't pretend it can.
So the honest framing is narrow and real: an AI scribe improves documentation, documentation is a growing driver of denials, and a more complete note is easier to bill and to defend. That's the lever. It's not a revenue-cycle platform, and you shouldn't buy it as one.
See the note quality before you bank on the billing benefit
The denials benefit is downstream of one thing: whether the note is actually more complete on your visits. That's testable.
Book a demo to see a structured note appear about two minutes after a sample visit, then run the 7-day free trial and check whether your notes come out more complete than your current end-of-day reconstructions. If they do, the documentation-driven denials are the ones that benefit. For the time-and-money side, see the real ROI of an AI scribe; for the after-hours angle that ties into note completeness, beating pajama time; and for the full documentation-burden picture, the pillar on cutting charting time. The receipts on security and data handling are on our security page.
Common questions
What is the current claim denial rate?
Initial denials hit 11.81% of claims in 2024, up 2.4% from the prior year, according to Kodiak Solutions' analysis of more than 2,100 hospitals and 300,000 physicians. Roughly one in eight claims now bounces on first submission, and the categories tied to medical necessity and requests for more information are rising.
Do bad notes cause claim denials?
They contribute. Two of the fastest-growing denial categories are medical necessity and requests for more information, both of which trace back to whether the record supports the claim. A note that clearly documents the clinical justification gives the biller what they need; a thin note creates the gap a payer questions.
Can an AI scribe reduce claim denials?
Indirectly, by improving the documentation a denial often turns on. A complete, legible note that captures the clinical reasoning and the plan is easier to bill cleanly and to defend on appeal. An AI scribe does not submit, code, or adjudicate claims; it improves the note that those downstream steps rely on.
Does an AI scribe integrate with my billing or claims system?
AI Scribe by Patient Square does not. It drafts the clinical note and offers ICD-10 suggestions for your coder to confirm; it does not connect to claims systems, submit claims, or replace your revenue-cycle workflow. The value here is upstream: a better note for whatever billing process you already run.
What denial reasons can better documentation actually help?
Mainly the documentation-dependent ones: medical necessity, insufficient information, and requests for additional records. It does not help with eligibility, authorization, or timely-filing denials, which are process failures, not documentation gaps. Target the note where the note is the problem.