After passage of legislation that could see provider revenues fall by up to $1 trillion, the AHA is vowing to continue the fight. AHA President and CEO Rick Pollack discussed how the hospital industry advocate is preparing for upcoming legislative battles.
American Hospital Association President and CEO Rick Pollack called the recent passage of the One Big Beautiful Bill Act (OBBBA) "extremely disappointing," but vowed to continue fighting to mitigate the impact on providers and patients.
The Medicaid cuts included in the bill, along with the expiration of Affordable Care Act tax credits, could cause provider revenues to fall by as much as $1 trillion, according to an estimate from the Urban Institute and the Robert Wood Johnson Foundation.
"Despite months of clearly demonstrating the implications that these Medicaid proposals would have on the patients and communities we serve, particularly vulnerable populations, Congress enacted these significant cuts," Pollack said during a conversation with AHA Chair Tina Freese Decker. The result will be the displacement of 11.8 million people from healthcare coverage.
Small wins prevented further harm
While the outcome was not what the hospital industry had hoped for, Pollack emphasized that the AHA was successful in preventing an even worse scenario. The association established key priorities, including preventing the implementation of block grants or per capita caps and preserving the core structure of provider tax and state-directed payment programs.
AHA advocacy also resulted in some crucial concessions. The effective dates for the cuts to provider taxes and state-directed payments were delayed until 2028, and the reductions will be phased in over several years to avoid an abrupt financial shock for providers.
"One of the small wins, I think it's actually a big one, was preventing it from even being worse," Pollack said, noting that his team successfully killed a "very dangerous amendment" that would have further cut federal matching funds to states.
Looking ahead to the next legislative battle
With the bill now law, the AHA’s immediate focus is twofold: helping its members manage the new reality and preparing for the next round of legislative battles. The association is developing guidance to help hospitals understand the law’s implications and is working to share best practices on revenue cycle improvements and operational efficiencies to help providers absorb the financial impact.
Pollack expects the upcoming legislative fight over a government funding bill will serve as the vehicle for several other critical healthcare provisions, including the extension of telehealth waivers, the renewal of the hospital-at-home program, and the prevention of looming Medicaid Disproportionate Share Hospital cuts.
"We’ve got to make sure that the government funding package, which is really the forcing event, includes these important issues and they're going to want to offset the cost of this," Pollack warned. "We’ve got to make sure that site neutral and 340B doesn't creep in as an offset."
For Pollack, the path forward relies on grassroots advocacy from hospital leaders. He stressed that when legislators don't hear from their constituents, they assume everything is OK.
"Grassroots is king. Grassroots is absolutely king," he said, urging leaders to continue telling the stories of how these cuts will impact the real people they serve.
To confront disappointing performance in its revenue cycle, leadership at Bon Secours Mercy Health made the decision to outsource. The deep, collaborative partnership has led to a significant turnaround.
Billie Jean Mounts arrived at Bon Secours Mercy Health (BSMH) shortly after the health system partnered with Ensemble Health Partners.
“Things were pretty well on fire at the time,” said Mounts, the health system’s current chief revenue officer, referring to the state of the revenue cycle prior to the partnership.
Aware that a change was necessary, BSMH leadership made the strategic decision to bring in a full-service revenue cycle partner.
That partnership not only quenched the fire but has since propelled BSMH to achieve top-tier performance, demonstrating how a deep, collaborative outsourcing relationship can drive significant and sustainable financial results.
First Step: Tackling System Complexity
An initial assessment by Ensemble revealed multiple broken processes, but the most significant challenge was a lack of standardization. BSMH was operating on more than 50 different instances of its Epic EHR system, creating a disparate and inefficient environment for data flow and claims management.
Consolidating these systems into a single instance was one of the first initiatives for the health system and its new partner. This undertaking standardized workflows and data infrastructure, creating the foundation for a more efficient and effective revenue cycle. With a foundation laid, the team could then begin to address the root causes of issues like claim denials.
Driving Measurable Results
The results of the turnaround were both rapid and dramatic. Before the partnership, cash collections as a percentage of net patient service revenue was only about 97%. Process improvements boosted that figure to above 100%.
The initial denial rate, which was around 3.6%, was another key focus. By leveraging data-driven insights and working to fix the root cause of denials, BSMH has driven that metric down to industry-leading performance, earning multiple HFMA MAP awards in the process.
A Partnership for Payer Accountability
A key element of BSMH’s success is the nature of its relationship with Ensemble, which extends beyond a simple transactional vendor agreement. It is, instead, a deep, shoulder-to-shoulder partnership focused on holding payers accountable.
As payers become more aggressive in their tactics for delaying payment, like excessive requests for medical records, it puts pressure on internal revenue cycle resources. To improve understanding between payers and the health system, sometimes it takes “sitting down side-by-side with the payer and going through claim by claim by claim,” according to Mounts. “It is painful.”
With a revenue cycle partner by their side, Mounts doesn’t need to do that grunt work. Instead, the partner provides the scale, technology, and analytical resources to identify payer issues and arm BSMH’s leadership with the information needed for high-level contract negotiations.
Many health systems may have their reasons to keep revenue cycle operations inhouse. However, for BSMH, the lesson is clear: in an increasingly complex healthcare landscape marred by payer pressure, a deep strategic partnership can provide the resources and expertise needed to not only fix a revenue cycle that is "on fire," but to transform it into one that is best in class.
UnitedHealth Group has confirmed it is under investigation by the DOJ. For healthcare leaders, the multiple probes into the payer could signal potential for a significant shift in payer-provider relationships ahead.
UnitedHealth Group confirmed in a recent regulatory filing that it is under investigation by the Department of Justice (DOJ), and that it is complying with criminal and civil requests.
In May, the Wall Street Journalreported that the DOJ criminal division had launched an investigation into the health insurance behemoth. A UnitedHealth statement issued at the time said the company was unaware of a criminal investigation.
"The WSJ's reporting is deeply irresponsible, as even it admits that the 'exact nature of the potential criminal allegations is unclear'," the statement read. "We stand by the integrity of our Medicare Advantage program."
Earlier reporting suggested the DOJ was investigating UnitedHealth for potential antitrust violations and that a separate civil fraud investigation was looking into potential upcoding at the company.
Does UnitedHealth give preferential treatment to its affiliated provider groups?
One component of the investigation into UnitedHealth is a broad antitrust probe examining the relationship between UnitedHealth's insurance business, UnitedHealthcare, and its health services subsidiary, Optum.
The question here is whether UnitedHealth is unfairly favoring Optum-owned and -affiliated provider groups, which includes tens of thousands of physicians nationwide. These accusations imply UnitedHealth is engaged in anti-competitive behavior that impacts independent providers and unaffiliated health systems.
Has UnitedHealth deceived the government by engaging in upcoding?
The other component of the investigation, which may have more significant implications for healthcare executives, is looking into allegations of upcoding – the practice of submitting diagnoses that are not supported by medical records to receive inflated risk-adjusted payments from the federal government.
UnitedHealth has been fighting allegations of upcoding for more than a decade. In 2011, Benjamin Poehling, a former UnitedHealth employee, launched a civil fraud case accusing the company of misrepresenting the medical conditions of beneficiaries. The DOJ took over the case in 2017, KFF Health Newsreported.
However, that case stalled earlier this year when a court-appointed special master in the case, Suzanne Segal, determined that DOJ had not submitted evidence sufficient enough to support its claim.
What it means for healthcare leaders
While investigations are focused on UnitedHealth, ripple effects will be felt through the broader healthcare industry. The company will likely ramp up its own internal audits and claim reviews to mitigate its legal and financial risk. Any policy changes at UnitedHealth, which accounted for 29% of all Medicare Advantage enrollment in 2024, will affect virtually all providers. These changes could manifest as even higher volumes of claim denials, lower tolerance for coding inconsistencies, and increased requests for information.
Additionally, heightened scrutiny on the payer could create a tense environment for contract negotiations, especially for providers competing with Optum-owned and -affiliated physician groups. As UnitedHealth navigates its significant legal and financial challenges, healthcare leaders should prepare for a rocky reimbursement landscape ahead.
A new PwC report projects the medical cost trend will remain high in 2026, driven by soaring drug spending and hospital expenses. As payers seek to strengthen utilization management, revenue cycle leaders should prepare for a tougher reimbursement landscape.
Health plans expect the growing medical cost trend to continue into next year, according to a recent report from PwC, with growth projections of 8.5% in the group market and 7.5% in the individual market for 2026.
The annual report identifies several inflationary forces driving medical costs higher, including spending on drugs and upward pressure on hospital expenses. The report could signal a turbulent year ahead with difficult payer negotiations and increased scrutiny on reimbursement on the horizon.
High-cost drugs are a primary driver
Pharmacy spending, particularly on high-cost specialty drugs like GLP-1s, is expected to be a significant driver behind high medical cost growth, according to the report. PwC expects 10% growth in this area.
This aligns with reports issued by payers earlier this year. For instance, Blue Cross Blue Shield of Massachusetts pointed to spending on GLP-1s when it announced an operating loss of about $400 million for the 2024 calendar year. Just five GLP-1 drugs accounted for more than $300 million of Blue Cross’ pharmacy spend in 2024.
"I don't see much changing in terms of the major drivers of rates — which are provider prices and drugs," Blue Cross CEO Sarah Iselin said at the time.
Payers and providers at a crossroads
Hospital costs are another significant driver behind projected medical cost growth. While year-end margins averaged 7% in 2019, that figure fell to 2.1% in 2024. And margins declined even further in the first quarter of 2025, according to the report. Much of this decrease can be placed on high labor costs and rising expenses for supplies.
Some outliers with double-digit margins have successfully passed rising costs onto commercial payers by increasing utilization and optimizing revenue cycles, according to the report. While PwC recommends payers strengthen utilization and payment integrity programs to combat the medical cost trend, this could be devastating for hospitals operating on razor-thin margins, which are also likely to be the ones most affected by impending Medicaid cuts.
Deflationary forces offer muted relief
While some forces are countering inflationary pressures, these are limited. For example, health plans have cited biosimilars as a leading cost deflator for the third year in a row, according to the report.
AI also holds the potential to contain rising medical costs should health plans effectively embed the technology into care management, pre-payment audits, and care coordination. However, because prices are contracted, they are often fixed for multiple years, and any productivity gains achieved through the implementation of AI are not likely to have a deflationary effect any time too soon.
In case there were doubts about it, the PwC report makes clear that the fundamental pressures driving medical costs higher will likely remain for the foreseeable future. Recommendations for payers include stronger controls and smarter use of data, including claims analysis, rate benchmarking and scenario modeling. Revenue cycle leaders will need to prepare for this with a proactive, data-driven approach of their own.
The 2026 OPPS proposed rule offers a modest 2.4% payment update, along with some major policy shifts. CMS is pushing for an expansion of site-neutral cuts, tougher price transparency enforcement, and an accelerated 340B "clawback," and elimiation of the inpatient only list.
The Centers for Medicare & Medicaid Services (CMS) has released its 2026 Hospital Outpatient Prospective Payment System (OPPS) proposed rule, which includes a 2.4% payment update for hospitals and ambulatory surgical centers (ASCs).
The rule also proposes a significant expansion of site-neutral payment policies, tougher enforcement for price transparency, and a controversial payment reduction related to the 340B program.
Check out the infographic below for more information, or read the full story here.
There's a lot of hype around the potential for new technologies to fix the prior authorization process, but this rev cycle leader says it can only be as effective as the foundation it's built upon.
Technology in prior authorization processes only works if there is a clear strategy guiding the human component.
In this episode of HL Shorts, Savanah Arceneaux, director of pre-service & financial clearance at Ochsner Health, explains how centralization and clearly defined responsibilities for revenue cycle employees helped to streamline prior authorization processes.
The Change Healthcare cyberattack wreaked havoc throughout the healthcare industry, but it served as a catalyst to accelerate a strategic shift at OhioHealth.
The Change Healthcare cyberattack in early 2024 sent a shockwave through the industry. While other provider organizations scrambled for solutions, it served as an unexpected catalyst for OhioHealth.
Prior to the incident, OhioHealth had been reassessing its relationships with revenue cycle technology vendors with the intention of diversifying its vendor portfolio. When the cyberattack occurred, the health system had already vetted vendors and selected Experian Health as a new front-end partner to help improve real-time eligibility verification and reduce eligibility-based denials.
"We were looking to diversify our portfolio and our vendor strategy prior to the incident," says Girish Dighe, system vice president of revenue cycle at OhioHealth. "It just accelerated everything."
The transition took on a new sense of urgency following the cyberattack, requiring an "all-hands-on deck" approach from both sides. However, while OhioHealth is only about one year into the new partnership, the health system has already realized a strong return on its investment in a new front-end revenue cycle platform. Eligibility-based denials decreased by about one-third, according to Dighe.
A focus on the financial experience
This push for a new front-end technology was driven by a core strategic pillar for OhioHealth: the patient financial experience. In this modern era of consumerism, a patient's financial journey is often nearly as important as the clinical care they receive.
"You can have a great clinical outcome, but if your financial experience is not good, that doesn't mean that patient is going to come back to OhioHealth, even if they did get a good clinical outcome," Dighe says.
This understanding has driven the health system to hone in on the ways it can get the front end of the revenue cycle right. Errors in eligibility and coverage verification cause a cascade of downstream problems, including claim denials, delays in cash flow, and increases in bad debt.
"If you get it right up front, you're sending a clean claim out the door for us to collect on and for the patient's responsibility to be accurate," Dighe says.
A well-informed patient is a happier patient
OhioHealth has, like many other health systems, engaged in efforts to simplify payments for patients. The health system offers flexible payment plans, two-way texting for billing questions, and multiple vehicles for payments, including digital payments.
These are important to patients, but OhioHealth has learned that these are not always the top concern for patients. While overall out-of-pocket costs are certainly significant, they aren't necessarily the primary focus for most patients either. The consumer experience team at OhioHealth determined that what patients really want is clarity.
"We wanted to identify what is truly the problem when it comes to patients affording their care," Dighe says. "It is it affordability? Is it accessibility? Is it even just understanding? What we found is that patients just want to be well-informed and better-informed about their healthcare payments."
This insight has led OhioHealth to build a technology-enabled, front-end strategy around patient education, ensuring patients understand the entire billing cycle, including how many bills they might receive and how much they will owe. Reliable data upfront prevents confusion down the line and creates the foundation for a better overall experience.
"A well-informed patient is going to be a happier patient that's going to be able to seek care," Dighe says.
CMS suggests a modest 2.4% payment update in the 2026 Hospital Outpatient Prospective Payment System proposed rule on top of changes to site-neutral payments, price transparency, and 340B funds.
CMS recently released the 2026 Hospital Outpatient Prospective Payment System (OPPS) proposed rule, outlining a 2.4% payment update for hospitals and ambulatory surgical centers (ASCs) that meet quality reporting requirements.
CMS is also proposing the expansion of site-neutral payment policies, new enforcement mechanisms for price transparency regulations, and a payment reduction related to the 340B Final Remedy rule issued in 2023.
The American Hospital Association (AHA) immediately pushed back against the modest payment update, calling it “inadequate.”
Expansion of site-neutral payments
CMS signaled its intention to expand site-neutral payment policies to include drug administration services delivered in provider-based departments, estimating the move would reduce Medicare spending by $280 million.
Site-neutral payment policies have garnered some bipartisan support among federal legislators. Site-neutral payment advocates say that current policies encourage health system consolidation, driving up costs, while critics say hospitals require higher payments to maintain access to care.
CMS also proposed phasing out the inpatient only list over a three-year period, beginning with the removal of 285 procedures in 2026.
“We oppose the proposal to expand ‘site-neutral’ cuts and eliminate the inpatient-only list, as both policies fail to account for the real and crucial differences between hospital outpatient departments and other sites of care,” Ashley Thompson, AHA senior vice president of public policy analysis and development, said in a statement.
New price transparency requirements
If implemented, the proposed rule would require hospitals to disclose the 10th, median, and 90th percentile allowed amounts negotiated with payers when charges are based on percentages or algorithms. The intent behind the shift is to provide patients with more accurate information about actual prices rather than estimates.
This proposal aligns with an executive order issued by the Trump administration earlier this year, which called for additional price transparency and increased enforcement of price transparency requirements.
If the government does ramp up enforcement, that could spell trouble for health systems that have broadly had difficulty complying with requirements.
CMS conducted price transparency reviews of 1,746 hospitals between 2021 and 2023. Of these, 74% were subjected to enforcement actions, resulting in more than $4 million in penalties, according to a 2024 report from the U.S. Government Accountability Office.
A quicker timeline for repayment of 340B funds
The proposed rule adds a new twist to yearslong drama surrounding the 340B Drug Pricing Program. During the first Trump administration, CMS implemented a change to reduce Medicare payments to hospitals for 340B drugs by 30% and to raise reimbursement for non-drug outpatient services.
In 2022, the Supreme Court later ruled that these changes were illegal. A year later, CMS said it would issue a $9 billion lump sum payment to eligible hospitals to account for the drug cuts, but that it would also recoup $7.8 billion in increased payments for non-drug services by codifying a 0.5% reduction in the OPPS conversion for impacted services beginning in 2026.
In the OPPS proposed rule for 2026, CMS suggests revising the downward offset from 0.5% to 2% and estimates that the offset would last through 2031.
“It is important to remember that this clawback punishes 340B hospitals for the agency’s own mistake in implementing a policy that a unanimous Supreme Court held to be unlawful,” Thompson said in the AHA statement. “Doubling down on that unlawfulness, the proposed recoupment is both illegal and unwise, and it should not be finalized.”
As with all proposed rules, these policies are not yet final. However, they certainly offer revenue cycle leaders plenty to think about until the final rule is released. Public comment on the proposed rule is open through September 15, 2025.
Payers retracted earlier financial forecasts, which could signal trouble ahead for revenue cycle leaders.
Payers continue to signal a rocky road ahead with the potential for significant implications on hospital revenue cycles. Both Molina Healthcare and Centene have recently walked back earlier financial forecasts for 2025, citing unexpected medical cost pressures.
For providers already facing cuts to Medicaid and Affordable Care Act subsidies, these announcements indicate an increasingly difficult-to-navigate reimbursement landscape on the horizon.
Payers Sound the Alarm on Rising Costs
Molina announced in early July that it was lowering its annual profit forecast due to "medical cost pressures" that had been building throughout the first half of the year, and that the company expects this to continue through the second half.
“The short-term earnings pressure we are experiencing results from what we believe to be a temporary dislocation between premium rates and medical cost trend which has recently accelerated,” Molina President and Chief Executive Officer Joseph Zubretsky said in a statement, indicating that member premiums could be on the rise in the near future.
This news came just one week after Centene withdrew its 2025 earnings forecast, citing a reduction in earlier predictions around the amount it would collect from the federal government in net risk adjustment revenue transfers.
These announcements follow broader industry trends. Earlier this year, United Healthcare and Cigna both announced disappointing financial performance in the fourth quarter of 2024 due to rising medical costs.
The Downstream Effect on Provider Revenue
It likely won’t be long before payers’ financial woes affect health systems’ revenue cycles. Patients, who are already taking on greater financial responsibility for their healthcare costs, will likely see their premiums rise. While that does not seem to have had a significant impact on key performance indicators like bad debt and point-of-service collections yet, it could be a matter of time before cash-strapped patients are pushed to their limits.
Additionally, as payers move to protect their bottom lines, they could take a more aggressive approach to utilization management.
These developments come as health systems already juggle rising labor costs and workforce shortages with increases in claim denials and payer requests for information. These obstacles could grow and make reimbursement even more difficult if payers amp up the pressure in an attempt to drive down their own costs.
For revenue cycle leaders, now is the time to double down on denial prevention and management strategies, consider technologies to ensure claims are clean and accurate on the first submission, and prepare managed care contracting teams for tough negotiations. In a turbulent healthcare economy, the ability to anticipate and respond to these shifts in the payer landscape will be critical for maintaining financial stability.
From the relentless rise of claim denials to major policy debates around prior authorization and the 340B program, the first half of 2025 has been defined by intense financial pressures on revenue cycles.
If the first half of 2025 felt like a whirlwind for your revenue cycle, you’re not alone. The healthcare landscape has been shifting quickly, with major developments in everything from the volume and complexity of claim denials to increased scrutiny over the 340B Drug Pricing Program and continued uncertainty surrounding prior authorizatio
The six-month mark is an apt time to take stock of the major trends shaping the industry. The following six stories have dominated the conversation and highlight the key challenges and strategic imperatives that will continue to define the year ahead for revenue cycle leaders.
