Lab Claim Denials Rose to 11.2% in 2025: What the XiFin Report Means for Molecular and Genomic Labs
Short answer: A new XiFin report finds the denial rate for clinical lab, molecular, and genomics claims reached 11.2% in 2025, up from 8.0% the year before. Prior authorization accounted for 27.6% of denials for genetic and molecular tests. The data is vendor-reported, so labs should compare it against their own claim history.
What does the XiFin report actually say?
On October 8, 2026, XiFin released its 2026 Payor Denial Impact Report: Diagnostics Edition. The company says the analysis covers more than 30 million diagnostic claims with 2025 dates of service, processed through its Empower RCM solution, which it says serves 11 of the 15 largest U.S. laboratories. The segments include clinical laboratories, hospital outreach laboratories, molecular and genomic providers, and anatomic pathology providers.
The headline number is a denial rate of 11.2% for clinical lab, molecular, and genomics claims in 2025, compared with 8.0% in 2024. XiFin describes that as a 40% increase that erased two years of improvement. Denials rose across every insurer type, and Traditional Medicare had the lowest rate at 3.4%.
One caution belongs up front. The release is a paid press release from a company that sells AI-based appeals software, and the figures come from its own customer data. They have not been independently verified. That does not make the numbers wrong, but it does mean a revenue cycle leader should treat them as a directional signal and test them against internal data.
Why are prior authorization denials growing for molecular tests?
XiFin reports that prior authorization denials for genetic and molecular tests now account for 27.6% of all denials in its dataset, up from 13.1% in 2021. In other words, the share roughly doubled in four years. For a molecular lab this matters more than the blended rate suggests, because a prior authorization denial often means the test was never cleared before the specimen was run.
The report also points to payer automation. It cites the National Association of Insurance Commissioners as finding that 84% of insurers use AI in daily operations, a figure dated May 20, 2025. The report does not claim that AI caused the rise in denials, and neither should a lab. What it does suggest is that payer review is increasingly systematic, so a missing code, a mismatched indication, or an absent authorization number is more likely to be caught at scale.
Labs that want the front-end view can start with our guide to prior authorization for genetic testing, and with the regulatory side in CMS-0057-F and prior authorization APIs.
How much of the problem is bundling?
For clinical lab claims, XiFin says bundling edits, shown on remittances as Procedure Not Paid Separately, are the top denial reason at 59%, up from 33% in 2018. For hospital outreach labs, bundling represented more than 61% of denials. These denials are different from prior authorization problems. They are often rooted in code pairing, modifier use, and payer edit logic rather than in whether the test was approved.
That distinction affects who owns the fix. Prior authorization problems usually start with ordering and intake. Bundling problems usually start in claim scrubbing and payer-specific edit tables. A lab that tracks both under one denial label will struggle to assign work to the right team. Our article on duplicate lab test denials and modifier 91 shows how one narrow edit can generate repeated rejections.
What does a denial cost once it is denied?
The report puts numbers on appeal economics. XiFin states that successful appeals in 2025 recovered an average of $1,684 for molecular and genetic claims, $235 for pathology, $171 for clinical, and $48 for hospital outreach. It adds that winning an appeal often takes two or three attempts, each requiring more than 20 minutes of trained staff time.
The spread explains why appeal triage matters. At $48 per recovery, a hospital outreach appeal may not justify repeated manual effort, while a molecular appeal at $1,684 usually does. Figures like these are averages, so individual test types and payers will differ. Even so, they support a simple policy: rank appeals by expected recovery and by the likelihood the denial reason can be corrected.
Patient responsibility is a second cost. XiFin reports that the patient share of the bill rose to 30% in 2025 from 26% in 2023, while the share of patient balances collected fell to 9% from 12%. For labs, a larger share of revenue sits in a segment that collects poorly.
What should lab and revenue cycle teams do with this?
First, split your own denial rate by payer, test family, and root cause before drawing conclusions from any outside benchmark. A blended rate hides the difference between a prior authorization problem and a bundling problem. Second, document the denial reason at the point of the first rejection, not after the second appeal. Third, check whether authorization is verified before the specimen is accessioned for tests that your major payers regularly require it for.
Fourth, set an appeal threshold. Decide which denials justify staff time based on expected recovery, then route low-value denials to a faster, lighter process. Fifth, review the evidence behind each recurring denial with the ordering clinician, since documentation gaps are a common thread across payers. Our overview of genetic testing denials covers common documentation causes, and teams that want policy checks built into the order-to-claim workflow can learn more at ScreenMyGene.
Frequently asked questions
How much did lab claim denials rise in 2025?
XiFin reports the denial rate for clinical lab, molecular, and genomics claims reached 11.2% in 2025, up from 8.0% the year before, a 40% increase. The figures come from more than 30 million claims with 2025 dates of service. They are vendor data and not independently verified.
What share of denials come from prior authorization?
According to XiFin, prior authorization denials for genetic and molecular tests made up 27.6% of all denials, up from 13.1% in 2021. Prior authorization is therefore a growing driver for molecular labs, though it is only one of several causes of denial that labs should track separately.
Why are bundling edits a problem for labs?
XiFin identifies bundling edits, shown as Procedure Not Paid Separately, as the top reason for clinical lab denials at 59%, up from 33% in 2018. For hospital outreach labs, bundling exceeded 61% of denials in the report, so edit logic deserves its own owner.
Is an appeal worth the effort for molecular tests?
XiFin reports an average recovery of $1,684 per successful molecular or genetic appeal, versus $235 for pathology and $171 for clinical claims. It also notes that winning often takes two or three attempts, each needing 20 or more minutes of trained staff time.
Can labs rely on this report as a benchmark?
Use it as one reference, not a standard. XiFin sells appeals software, and its figures come from its own customer base, which includes 11 of the 15 largest U.S. laboratories. Compare your own denial rate by payer and cause first.
This article is educational and intended for laboratory, clinical, and revenue cycle professionals. It is not legal, coding, clinical, or reimbursement advice and does not replace payer or CMS documents. The statistics cited are vendor-reported and have not been independently verified. Verify all requirements against current payer policies before billing.
Sources: XiFin, Inc., "2026 Payor Denial Impact Report: Diagnostics Edition," Business Wire press release, October 8, 2026 (as republished by Yahoo Finance); National Association of Insurance Commissioners (May 20, 2025) and Commonwealth Fund (2025 survey), as cited in the XiFin report.