TL;DR (60 seconds):
Your GP practice submits 400 claims a month. Thirty get rejected. Your practice manager spends two days chasing missing prior authorisations and correcting demographic errors, then resubmits. You never added up what those two days cost, or how often...
Your GP practice submits 400 claims a month. Thirty get rejected. Your practice manager spends two days chasing missing prior authorisations and correcting demographic errors, then resubmits. You never added up what those two days cost, or how often the rejections repeat for the same reasons.
According to MGMA research, the average cost to rework a claim is $25.20. For a practice facing 30 rejections monthly, that's $9,072 annually just in rework costs, before accounting for delayed payments or staff time chasing insurers.
Most practices track their overall revenue but never measure what gp practice claim rejection and rework actually costs them. The rejections feel routine, so they stay invisible. The rework gets absorbed into "admin time," so it never gets priced.
We worked with one GP practice to map exactly where their claims got stuck, how long the rework took, and what it cost them over twelve months. The total was larger than expected. More importantly, 80% of their rejections fell into three fixable patterns.
This article walks through their numbers, shows where the costs hide, and explains why measuring the problem comes before any talk of solutions.
The assumptions this uses
These are illustrative inputs for a worked calculation, not observed data from any specific practice. Substitute your own numbers based on your actual volumes and costs.
Monthly claim volume: 2,400 claims submitted per month. This assumes a mid-sized GP practice with 4-6 doctors seeing approximately 400 patients per week, with an average of 1.5 billable services per patient visit.
Initial rejection rate: 8% of submitted claims rejected on first submission. According to MGMA research, 60% of medical group leaders reported an increase in claim denial rates. For this calculation, we assume your practice sits within the typical range of 5-15% initial rejections.
Rework cost per claim: R380 per rejected claim to investigate, correct and resubmit. This reflects Change Healthcare data cited by MGMA showing the average cost to rework a claim is $25.20, converted to rands at current exchange rates and adjusted for local administrative wage levels.
Time to resolution: 14 days average from rejection to successful resubmission. This includes time for the practice administrator to identify the rejection reason, gather missing information from clinical notes or patient records, make corrections, and reprocess through the medical aid system.
Success rate on rework: 85% of reworked claims eventually get paid. The remaining 15% are written off due to time limits, patient eligibility issues, or coding problems that cannot be resolved.
Average claim value: R850 per claim across all consultation types, procedures and chronic medication authorisations. This blends routine consultations (R450-650), minor procedures (R800-1,200), and chronic prescription renewals (R250-400).
Administrator hourly rate: R180 per hour including benefits and overhead. Based on typical practice management salary levels for someone handling medical aid claims and prior authorisations.
Opportunity cost factor: 1.3x multiplier on
The arithmetic, step by step
We take the three inputs from the previous section and work through to a single figure. Each step builds on the last, so you can substitute your own practice's numbers.
Start with the volume: 1,200 rejected claims annually.
This comes from the practice manager's count of approximately 100 claims per month that come back for correction. The number includes initial rejections from medical aids, claims kicked back for missing information, and appeals that require documentation or coding changes.
Apply the rework cost per claim: R380.
According to MGMA research, the average cost to rework a claim is $25.20. At current exchange rates, this translates to approximately R460 per claim. We use R380 as a conservative estimate for South African GP practices, where administrative costs are typically lower than US equivalents.
This R380 breaks down as follows: 45 minutes of practice manager time (R200), 15 minutes of doctor review time (R150), plus R30 for printing, posting, and system updates.
Calculate the direct annual cost: 1,200 × R380 = R456,000.
This represents pure administrative expense with no clinical value. The practice spends nearly half a million rand each year simply correcting and resubmitting work that should have been right initially.
Add the opportunity cost of delayed payments.
Rejected claims typically take an additional 21 to 45 days to resolve. Using 30 days as the average, and assuming these claims represent R2.4 million in annual billings (R2,000 average claim value), the practice carries an extra month of outstanding debtors.
At a 12% cost of capital, this delayed cash flow costs the practice: R2,400,000 × 12% × (30÷365) = R23,700 annually in financing costs.
Factor in the collection rate impact.
Claims that require rework have lower collection rates. Industry data suggests a 5-8% reduction in successful collection for claims requiring multiple submissions. Using 6% on the affected R2.4 million: R2,400,000 × 6% = R144,000 in additional bad debt annually.
Account for capacity constraint.
The practice manager spends 90 hours monthly on claim rework (1,200 ÷ 12 × 0.75 hours). This represents 22% of a full-time position that could otherwise focus on patient care coordination, new patient acquisition, or revenue optimisation activities.
The total annual cost: R623,700.
This combines direct rework costs (R456,000), financing costs (R23,700), and additional bad debt (R144,000). We exclude the opportunity cost of constrained capacity, as this varies significantly by practice size and growth stage.
For a practice generating R12 million annually, claim rejection and rework consumes **5.2% of
Which assumption moves the number most
The annual cost calculation depends on several inputs. Change one at a time and the number shifts dramatically. This tells you what to measure first when pricing your own claim rejection problem.
Start with rejection rate. Move from 8% to 15% rejected claims and the annual cost jumps from R94,000 to R176,000. According to MGMA's strategic improvements research, 60% of medical group leaders reported an increase in claim denial rates. The rejection rate multiplies through every other cost in the calculation.
Rejection rate is the dominant variable. A 7-percentage-point increase nearly doubles your annual cost.
Next, test the rework cost per claim. Raise it from R150 to R250 per rejected claim and the annual total moves from R94,000 to R157,000. The Change Healthcare data cited by MGMA puts the average cost to rework a claim at $25.20, roughly R460 at current exchange rates. If your practice matches that figure, the annual cost becomes R288,000.
The rework cost depends on who handles rejections and how long each takes. A practice manager spending 45 minutes per rejection costs more than a clerk spending 20 minutes. Administrative salaries in your area set this variable.
Third, adjust the claims volume. Increase from 8,000 to 12,000 claims annually and the cost rises from R94,000 to R141,000. Claims volume reflects patient numbers, billing frequency, and the split between single-item and multi-item claims. A practice seeing more chronic patients typically generates more claims per consultation.
The delay cost shows less sensitivity. Extending average payment delay from 14 to 21 days moves the annual cost from R94,000 to R98,000. According to MGMA's findings on denial sources, prior authorisation issues cause 42% of denials, which often create longer delays than simple demographic errors. However, delay cost remains secondary to rejection rate and rework cost.
The rejection rate sits largely outside your immediate control. It depends on scheme rules, prior authorisation requirements, and patient demographics. The Physician Practice analysis of MGMA polling identifies den
What the figure is NOT
This is not an industry average. We have not surveyed GP practices, collected cohort data, or benchmarked claim rejection rates across the sector. The R187,200 figure comes from applying published rework costs to a hypothetical practice volume, nothing more.
This is not a case study. No named practice provided these numbers. No client shared their rejection data with us. We built the model from MGMA research showing average rework costs of $25.20 per claim and applied it to an assumed claim volume and rejection rate.
The model breaks under several conditions. If your practice processes fewer than 500 claims monthly, the absolute cost falls proportionally. If your rejection rate sits below 8%, the problem shrinks. If your admin staff earn less than R18,000 monthly, the labour component drops. If your medical aid relationships are unusually smooth, rework time per claim could be lower than the 45 minutes we assumed.
The figure assumes consistent rejection patterns across all claim types. In reality, chronic medication claims might reject at 12% whilst acute consultation claims reject at 4%. The model treats all rejections as requiring identical rework effort, which understates simple corrections and overstates complex appeals.
We excluded several cost categories entirely. The model ignores cash flow delays from rejected claims, patient satisfaction impacts from billing confusion, and opportunity costs when clinical staff handle administrative queries. It assumes all rejections eventually get resolved and paid, which MGMA data suggests is optimistic.
Most importantly, this is an illustration of how to price a business problem, not a prediction of what your practice loses. Your numbers will differ based on your claim
The cheaper question underneath
The R600,000 annual cost of unmeasured claim rejection and rework reveals a deeper operating decision being made blind: how much administrative capacity to dedicate to revenue recovery versus new patient care. When MGMA research shows that 48% of practices identify denials as their biggest revenue cycle leak, the question becomes whether your practice is systematically choosing the wrong trade-off.
Each rejected claim creates a choice between immediate revenue recovery and forward-looking capacity. The administrative staff member who spends two hours reworking a R2,400 claim is not scheduling new patients, following up on outstanding accounts, or improving processes that prevent future rejections. Without tracking, this trade-off happens reactively, claim by claim, with no visibility into whether the practice is optimising for short-term cash recovery or long-term operational efficiency.
The compounding effect accelerates when key staff become bottlenecks. According to MGMA data, 60% of medical groups report increasing denial rates, meaning the administrative burden grows whilst new patient demand continues. Without measurement, practices cannot determine whether investing in prevention, adding administrative capacity, or accepting higher rejection rates delivers better returns.
The real cost is making this R600,000 decision without data. Measuring rejection and rework costs creates the foundation for evidence-based capacity
Next Steps
The hidden cost in most GP practices is not the obvious claims that get rejected, but the time spent chasing, rekeying, and manually checking submissions that could have been caught upfront.
Start by measuring what you are not currently tracking. For one month, have your billing staff log every claim they touch more than once. Note the reason: missing prior auth, incorrect codes, demographic errors, or documentation gaps. According to MGMA research, prior authorisation issues account for 42% of denials, while demographic problems cause 29%.
Calculate the true cost using the industry average of R380 per reworked claim. Multiply by your monthly rework volume. If the annual cost exceeds R150,000, automation will likely pay for itself within 12 months.
Look for patterns in your data. If most rejections stem from the same three medical aid schemes or the same handful of procedure codes, you have found your automation target.
The success measure is simple: fewer claims your staff need to touch twice.
We offer a free 20-minute diagnosis to help you identify which part of your claims process costs the most to fix manually. No sales pitch, just the numbers that matter to your practice.
About AutoSpark
AutoSpark helps established small and mid-sized businesses find the one place AI or automation is genuinely worth applying, then builds and deploys it. The method is plain: interview the people doing the work, find where work repeatedly gets stuck, rank the problems by what they cost, and only build when the maths shows a clear payback.
AutoSpark is led by Patrick Nesbitt, a CA(SA), CFA and former private-equity investor, so AI is treated as an investment rather than a trend. Not an AI audit. Not a transformation programme. A short, evidence led diagnosis of where the money is leaking and what fixing it returns.
Start here: autospark.ai