"Learn to fail but fail fast," says Mayo Clinic's revenue cycle execs.
The first full day of the 2025 HFMA Revenue Cycle Conference was lively, with one topic unsurprisingly dominating discussions: technology adoption.
As hospitals and health systems face ongoing financial pressures, the need to optimize revenue cycle performance through automation and AI-driven solutions has never been greater.
From streamlining prior authorizations to improving claim denials management, the promise of technology in revenue cycle operations is clear—but so are the challenges of implementation.
Revenue cycle leaders are under increasing pressure to justify the ROI for new tools while navigating staff resistance, interoperability hurdles, and shifting regulatory requirements.
As adoption accelerates across the industry, the conversation has shifted from whether to implement automation to how to do so effectively.
Their insights provided a roadmap for organizations seeking to move beyond pilot programs and achieve measurable impact with revenue cycle technology.
Here’s what they had to say.
Achieving buy-in
Getting various stakeholders on board is the first obstacle to overcome.
When assessing potential for new technologies, revenue cycle leaders at Mayo Clinic develop roadmaps to success that are shared with senior leaderships and technology steering committees. If a technology passes the initial test, the roadmap helps to ensure that all stakeholders are working toward a common strategic goal during implementation.
Of course, demonstrating ROI is key to achieving buy-in. However, ROI calculations can go beyond just dollar amounts. In some instances, the potential amount saved in salary may move a project forward.
However, if a technology can, for instance, help to get medications approved for patients more quickly, it provides value even without a monetary amount attached.
Confronting staffing challenges
Technology adoption projects can consume significant amounts of workforce resources. Health systems should consider the pros and cons of using in-house versus contracted workforce resources to help limit the impact, Barnes and Amos said.
While in-house resources offer consistency, create accountability, and provide deeper alignment with strategic goals, they are also costly.
On the other hand, benefits to contracted workforce resources allow greater flexibility to scale technology projects and speedier deployment.
However, these resources come with an institutional knowledge gap and may not offer the post-implementation maintenance and support that health systems need.
Tweaking responsibilities for in-house staff is one way health systems can leverage existing institutional knowledge to support technology adoption, according to Barnes and Amos.
Mayo Clinic shifted some of its EHR support staff into business analyst roles. Because of their background with the organization, these individuals are well-equipped to identify use cases for technologies and to help prepare the road maps used to determine feasibility.
How to tell if automation technology is working
Barnes and Amos shared four rules to help determine if automation technology is working effectively. These tools should be:
Repetitive – automation is most effective when it is used for processes that reoccur with regularity.
Rule-based – automation should be driven by defined logic controls for each step in a given process.
Stable – automation should be applied in instances where changes are not expected in the near-term.
Consistent – automation is ineffective if applied to processes where too many exceptions would require human intervention.
Learning to fail
Mayo Clinic has seen positive results overall from its automation initiatives. One success story can be seen in the health system’s efforts to automate outpatient medical prior authorizations.
Before adopting an automated process, Mayo Clinic staff had been manually sorting and processing more than 1,000 faxes per day. Following automation, more than 80 percent of prior authorization requests were classified without human interaction.
Of course, not every technology implementation project produces the desired results. And that’s okay – if failures produce lessons learned. It is also important that health systems not prolong their failures. It can be easy to fall victim to the sunk-cost fallacy, devoting evermore resources to a solution that is not working.
Claim denials are still causing frustration for revenue cycle leaders, and a new survey shows it's only getting worse.
Claim denials remain a challenge for revenue cycle leaders across the country, putting a drain on both financial and workforce resources. Outside the effect on health system revenues and employees, denials create anxiety for patients who often encounter delays in treatments.
In the 2024 Experian Health State of Claims survey, 210 respondents involved in their organizations’ revenue cycle operations share their thoughts on claim denials. Results show that many are concerned about receiving payment from both payers and patients.
While AI and associated technologies show promise in their ability to ease the administrative burden caused by claim denials, few are currently using it in robust ways.
Payers are raising alarm over their rising medical costs. What should revenue cycle leaders look out for as payers rein in their rising costs?
Higher-than-expected medical costs spell trouble for payers across the nation. As they scramble to meet rising costs, revenue cycle leaders are left wondering how they will be affected.
United Healthcare combats rising costs with workforce cuts
United Healthcare revealed in January that its medical costs came in higher than expected and premium revenue lower than expected in the fourth quarter of 2024, Reuters reported. Rising medical costs were largely due to high demand for healthcare services among Medicare and Medicaid patients.
It seems the payer may be looking to its workforce to make up the difference caused by rising medical costs. United Healthcare has made buyout offers to some employees and could begin layoffs later in the year if too few accept, CNBC reported.
Cigna takes a hit on stop-loss insurance products
Cigna also revealed in January that it failed to meet earnings estimates in the fourth quarter of 2024 and that its underperformance was due to rising medical costs, Reuters reported.
Cigna was hit especially hard by claims on its stop-loss plans. Employers with self-funded health plans can purchase these plans to limit their health spending beyond a certain amount. However, Cigna is on the hook for any costs beyond that amount.
Like United Healthcare, Cigna pointed to high demand among Medicare and Medicaid patients as one factor behind higher-than-expected medical spending.
Cigna expects high costs associated with stop-loss plans to continue throughout 2025. Employers and the patients covered by their health plans may not be feeling the full effect of these rising costs. However, they will soon.
Pricing for stop-loss plans sold for 2025 was determined before their high costs were clear to Cigna. Employers and their employees will likely foot the bill when pricing for 2026 plans reflects the higher costs.
BCBSMA posts a $400 million operating loss
Blue Cross Blue Shield of Massachusetts announced a staggering operating loss of about $400 million for the full 2024 calendar year. Just a year earlier, the non-profit payer ended 2023 with an operating income of $47.8 million.
Losses at Blue Cross can largely be attributed to increased spending. Costs for medical care and medications are escalating at a faster rate than they have in a decade, according to CFO Ruby Kam. GLP-1 drugs played a large role in higher spending. Just five GLP-1 drugs accounted for more than $300 million of Blue Cross’ pharmacy spend in 2024
How it all adds up for revenue cycle leaders
Patients will likely be the ones forced to pay the most for rising medical costs.
Blue Cross indicated that it will address financial challenges by adjusting benefit plan pricing to reflect higher costs. Cigna indicated that it will increase prices for stop-loss insurance, and these increases will likely be passed to patients.
While patients stand to pay the most, provider organizations are not clearly the winners in these circumstances.
Payers may also look to provider organizations for relief in contract negotiations. Sarah Iselin, CEO of Blue Cross Blue Shield of Massachusetts, indicated as much during a Massachusetts Health Policy Commission hearing.
"I don't see much changing in terms of the major drivers of rates — which are provider prices and drugs," she said.
There may not be too much room for reductions.
As revenue cycle leaders know all too well, provider organizations continue to devote significant resources to operational difficulties tied to workforce shortages, government regulations, and rising claim denial rates.
What does this all mean for revenue cycle leaders?
The first step is to prepare for increased pressures in contract negotiations, as payers seek to shift financial burdens onto providers through rate adjustments and more stringent reimbursement policies.
These pressures come at a time when hospitals and health systems are already struggling with workforce shortages, growing labor costs, and heightened claim denials. With Medicare and Medicaid reimbursements failing to keep pace with inflation, hospitals may find themselves caught between rising operational expenses and increasingly challenging payer contracts.
Additionally, the anticipated cost shifts to employers and patients may lead to increased patient financial responsibility, exacerbating existing challenges with collections and bad debt.
As patients face higher deductibles and out-of-pocket expenses, revenue cycle teams will need to refine financial counseling, improve point-of-service collections, and enhance patient payment strategies to mitigate the risk of delayed or lost revenue.
The financial uncertainty affecting payers is a clear warning sign for revenue cycle leaders: the landscape is becoming increasingly complex, and adaptability is key.
Strengthening payer-provider relationships, leveraging technology for efficiency, and focusing on proactive revenue cycle strategies will be critical to navigating these turbulent financial waters.
Partnerships with the right software vendors can facilitate greater collaboration between providers and payers.
Healthcare execs have big plans to invest in AI and advanced analytics software to improve efficiency, payer relations, and patient access.
But far too often, shiny new tools that promise to help end up doing more harm than good, according to Debbie Schardt, DSL, MBA-HCA, RN, assistant VP of revenue cycle and utilization management at MultiCare Health System.
Schardt recently told HealthLeaders Media about her approach to partnering with RCM and UM software vendors.
Take your time vetting vendors
MultiCare took their time before bringing a vendor into their revenue cycle operations. They ultimately selected a relative newcomer – becoming just the third client to partner with the vendor.
"I think I made them do 20 demos for me, then my team, and then the executive team, Schardt said.
Working smarter, not harder
The decision to work with a newer vendor was a "wise risk," according to Schardt. The partnership has been successful so far.
Among payers collaborating with MultiCare on shared software platforms, Schardt says there has clearly been a decline in denials for clear-cut cases.
It's mutually beneficial. "They've noticed efficiencies, we've noticed efficiencies, the relationship is a little bit better because we're really talking about the gray-zone cases," Schardt explained.
To learn more about Schardt's approach to payer-provider software adoption, check out our earlier coverage.
As claim denials continue to rise, state governments start to take notice while revenue cycle leaders find new ways to push back.
Surveys show that claim denial rates remain a major headache for revenue cycle leaders, prompting growing frustration from provider organizations and policymakers.
As revenue cycle leaders continue to devise their own strategies to counter claim denials, state governments have rapidly created new rules to crack down.
Claim Denial Problem is Plain to See, Providers Say
Feelings of frustration over claim denials are palpable among revenue cycle leaders and throughout provider organizations.
Reducing denials is a top priority at a significant majority of provider organizations, according to the 2024 Experian Health State of Claims survey. Among 210 respondents involved in their organizations’ revenue cycles:
84 percent say reducing denials is a priority
77 percent say they are concerned about reimbursement from payers
73 percent say claim denials are increasing
Preauthorization, the chief concern of respondents concerned about reimbursement from payers, is a shared pain point for revenue cycle leaders and their clinician counterparts.
More than 90 percent of physicians report burnout due to the administrative burden of prior authorization requirements, according to a 2023 survey from the American Medical Association.
What Are Revenue Cycle Leaders Saying?
The problem with denials extends beyond quantity.
“We are seeing more – not only in volume, but in ambiguity and variety and complexity,” Beth Carlson, VP Revenue Cycle at WVU Health, recently told HealthLeaders.
The level of complexity involved in a single denial can make it difficult to determine who should deal with them, or even if they should be dealt with. “The cost and administrative burden for overturning some of these denials really aren't worth some of the reimbursements,” Carlson said.
To make these determinations, WVU Health has implemented a triage system to determine when and how denials should be escalated. Carlson also suggests building strong partnerships outside revenue cycle departments. Physician, payer relations, and legal team can push back against high claim denial rates in their own ways.
“Reach out beyond your revenue cycle to get people at the table that can help make a difference.”
Is More Help Coming?
As revenue cycle leaders work to create and expand their internal strategies, more help may be coming as policymakers start to pressure payers to limit claim denials.
In fact, state lawmakers recently seem receptive to complaints over claim denials. At least 10 states passed laws in 2024 to create new rules around prior authorization requirements.
Others have previously passed laws just going into effect this year. At least two state legislatures and one state governor have started 2025 with new proposals to limit claim denials.
In New Jersey, for example, a law that took effect on January 1 will require payers to make prior authorization decisions within 72 hours for non-urgent requests and 24 hours for urgent requests. The law also requires prior authorizations for chronic conditions to remain valid for 180 days.
In Montana, legislators are currently considering two separate proposals to regulate prior authorization. One would ban prior authorization requirements for many generic drugs. The other would prevent denials for prescribed drugs when patients are moving to a new policy.
A proposal recently introduced in the California legislature could impose financial penalties on payers for excessively denying claims and force them to make claim denial data public.
Under the proposal, payers could be fined up to $1 million per case if more than one-half of appeals filed with state regulators were reversed in under one year.
This could spell trouble for payers considering state data shows around 72 percent of appeals submitted to one state regulatory body in 2023 led to the reversal of a denial.
Wisconsin Governor Tony Evers, in a proposed budget for 2025 to 2027, laid out plans to create processes for auditing payers if their claim denial rates exceed certain targets. These plans would also establish a government office to help patients pursue payers for unreasonable denials.
While it looks like denials aren’t going anywhere anytime soon, the uptick in government interest shows a step in the right direction in the provider/payer battle.
Revenue cycle leaders should engage with policymakers to ensure a healthy relationship between public policy and revenue cycle operations.
Revenue cycle leaders are navigating shifting regulatory landscapes with a cloud of uncertainty around government funding hanging over their heads. So, it makes sense that public policy emerged as the hot topic at the Revenue Cycle Exchange held February 5-7.
Several industry leaders gathered during the event to discuss their efforts to influence public policy.
Mike Finley, director of revenue cycle at Emplify Health, and Mike Gottesman, AVP of revenue cycle operations at Northwell Health, shared their insights on the intersection of healthcare policy and revenue cycle operations. Amanda Bessicks, executive director, government and vendor relations at Baptist Health-Jacksonville, discussed operational challenges resulting from the No Surprises Act.
The group also discussed ways that revenue cycle leaders could engage with policymaking processes. Here is what they had to say.
To learn more, read our coverage of the panel discussion.
