Most people think hospitals just treat you and send a bill. The reality is far more complicated—and far more adversarial.

Between your care and your bill, there’s often a battle happening that you never see: hospitals going to war with insurance companies who deny claims, delay payments, underpay, or suddenly reverse approvals they already gave.

This fight costs hospitals billions. But when they win, it means you don’t get stuck with a bill you should never have seen in the first place.

Two Stories That Show Why This Fight Matters

Dean Peterson fainted one day because his heart was beating 300 times per minute. Doctors performed an emergency procedure—one his insurance company had preapproved. The bill was $143,206.

The insurer denied it anyway. The denial letter cited a bizarre reason: it claimed Dean had requested coverage for spinal injections, something he never asked for. Months of phone calls and a patient advocate later, the claim still wasn’t resolved.¹

Chloë Jones, a kindergartner in Missouri, needed eye surgery to correct ptosis—a drooping eyelid that could eventually interfere with her vision. Her mother requested a network gap exception because there were no in-network pediatric specialists nearby. UnitedHealthcare approved it and sent a prior authorization letter.

Then the bill came: more than $13,000. The insurer claimed there was no record of the approval—even though the family had letters on UnitedHealthcare’s own letterhead. One representative actually questioned whether the approval letter was legitimate.

It took intervention from a state senator’s office before the insurer finally reprocessed the claim and paid in full.²

These cases eventually got resolved. But countless others don’t—unless someone fights back.

The Hidden Battle Hospitals Fight Every Day

Here’s what most patients don’t realize: when an insurance company denies or underpays a claim, hospitals don’t just shrug and send you the balance. They fight.

According to a national survey of more than 500 hospitals:³

Nearly 15% of all claims are denied the first time insurers receive them.

More than half of those denials are eventually overturned—but only after multiple rounds of appeals.

Hospitals spent an estimated $19.7 billion in 2022 fighting these denials.

That’s not a typo. Nearly $20 billion—just in one year—spent arguing over claims that insurers should have paid from the start.

What That Fight Actually Looks Like

Behind the scenes, hospital billing and revenue cycle teams are doing work that patients rarely see:

• Appealing denied claims — often through multiple rounds of review, each taking 45-60 days
• Correcting coding and documentation issues — insurers frequently deny claims over technicalities that have nothing to do with whether care was needed
• Tracking down “lost” paperwork — authorizations that insurers claim they never received or have no record of
• Negotiating with payers — pushing back on underpayments and demanding insurers honor contracted rates
• Escalating cases — involving medical directors, legal teams, or external review when insurers won’t budge
• Pursuing legal action — in cases of systematic bad faith denial practices

The goal is simple: get insurers to pay what they’re contractually obligated to pay—so the patient isn’t left holding a bill that was never theirs to pay.

Why This Should Matter to You

Every time a hospital wins one of these fights, a patient is protected from financial harm. That denied claim doesn’t become a surprise bill. That underpayment doesn’t become a collections notice.

But hospitals can’t catch everything. And the system is stacked against patients who try to fight alone.

That’s why it helps to understand what you’re actually responsible for—and what you’re not.

What You’re Actually Responsible For

You agreed to pay:

✔ Copays

✔ Deductibles

✔ Coinsurance

✔ Services your plan explicitly excludes

You did NOT agree to pay:

✘ Insurance processing errors

✘ Wrongful denials

✘ Underpayments

✘ Retroactive denials (insurance says yes, then no)

✘ Delayed or ignored claims

Those problems come from the insurance side—not the patient side. And in many cases, the hospital is already fighting them on your behalf.

What You Can Do If a Denial Reaches You

Sometimes a wrongful denial slips through. If you receive a bill that doesn’t seem right:

1. Don’t pay immediately. Many denials are overturned on appeal.
2. Call the hospital’s billing department or patient advocate. They may already be working on it—or can start.
3. Request the denial in writing from your insurer. Ask for the specific policy language they’re citing.
4. Document everything. Keep records of every call, email, and letter.
5. File an appeal. You have the right to an internal appeal, and in most states, an external independent review.
6. Contact your state insurance commissioner or elected officials. Sometimes outside pressure is what breaks the logjam.

The Bottom Line

Hospitals aren’t just places that provide medical care. They’re also part of the shield that protects patients from a system that doesn’t always work the way it should.

That $19.7 billion hospitals spend fighting denials? It’s not just an administrative cost. It’s money spent keeping wrongful bills from landing in your mailbox.

Stories like Dean’s and Chloë’s remind us that even with preapproval, even when you do everything right, the system can still fail you. But they also remind us why having advocates—whether it’s a hospital billing team, a patient advocate, or sometimes even an elected official—matters so much.

No patient should have to carry that fight alone.

Sources

¹ KFF Health News. “Denials of Health Insurance Claims Are Rising—And Getting Weirder.” May 2023. kffhealthnews.org

² KFF Health News. “An Insurer Agreed To Cover Her Surgery. A Politician’s Nudge Got the Bills Paid.” August 2025. kffhealthnews.org

³ Premier Inc. “Trend Alert: Private Payers Retain Profits by Refusing or Delaying Legitimate Medical Claims.” March 2024. premierinc.org