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AI, Lawsuits, and Power Plays. Why the Payer-Provider War Just Got More Dangerous for Healthcare CFOs.

Analysis  |  By Amanda Norris  
   March 17, 2025

The payer-provider war is entering a new phase, and the financial fallout is devastating. CFOs are no longer just balancing budgets—they are the last line of defense against aggressive payer tactics.

Welcome to the HealthLeaders March 2025 cover story. Each month, our editors dive into the topics that matter most—such as healthcare innovation, leadership strategies, and patient care—delivered in a dynamic, engaging format.

What did we look at this month? It’s all about the escalation of the payer/provider war.

Seventy percent. That’s how much payer-provider disputes have surged in just the last two years.

Contract terminations, lawsuits, and drawn-out reimbursement battles have become the new normal, and hospitals are bleeding cash as a result.

Providers now spend nearly $20 billion annually on claim denials—half of it wasted on disputes that should never have happened. That’s $10 billion that could have gone toward patient care, medical innovation, or staff retention. Instead, it’s being siphoned away in an endless cycle of bureaucratic gridlock.

But this war is evolving. Payers are using AI-driven denials to reject claims at unprecedented rates. Legal battles over reimbursement are intensifying. Patients, caught in the crossfire, are angrier than ever. And yet, policymakers remain largely disconnected from the financial devastation unraveling in hospitals across the country.

If this battle remains an “I win, you lose” game, providers will continue losing billions, patients will suffer, and health systems will collapse under the weight of financial instability. The system is unsustainable—but it’s not unfixable.

CFOs are in a rare position to rewrite the rules of engagement. By standing at the intersection of finance, operations, and policy, they can wield hard data to expose payer tactics, drive regulatory changes, and force a shift in how contracts are negotiated. But to do that, they must step beyond the walls of their own health systems and enter the policy arena.

This month, CFO editor Marie Defreitas writes about how CFOs can stop reacting and start leading. 

Read the story here.

“Unless there are regulatory or legal changes to simplify the administrative burden of prior authorizations and claims adjudication, it is possible we could end up in a future state of a battle of the bots and AI-based standoffs ... ”

Amanda Norris is the Director of Content for HealthLeaders.


KEY TAKEAWAYS

Healthcare CFOs must step up as strategic leaders to bridge the growing financial and operational divide between payers and providers.

Health systems spend billions annually battling payers—CFOs have the power to turn financial losses into policy-driven reform.

To drive real change, CFOs must move beyond financial strategy and into policymaking to advocate for fair reimbursement and operational sustainability.


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