From relentless claim denials and payer pressures to policy debates around prior authorization and the 340B program, this mid-year briefing unpacks the six essential stories every revenue cycle leader needs to know.
It’s been a busy first half-year for revenue cycle leaders. From the continued rise in claim denial rates to increased scrutiny over the 340B Drug Pricing Program to uncertainty surrounding funding for government-backed health plans, there has been a lot of news to follow.
At the six-month mark, we take a look at the most read stories shaping the revenue cycle landscape.
No Denying There's a Claim Denial Problem
Around 85% of revenue cycle leaders surveyed for the 2024 Experian Health State of Claim say reducing denials is a top priority for their organizations, and about three-quarters say they are seeing more denials.
However, it’s not just quantity that’s keeping revenue cycle leaders up at night.
“We are seeing more – not only in volume, but in ambiguity and variety and complexity,” Beth Carlson, VP Revenue Cycle at WVU Health, told HealthLeaders earlier this year.
Let's Get Digital: How 2 RCM Leaders Are Tapping Tech to Improve Patient Access
As patients shoulder growing financial responsibility for their healthcare costs, revenue cycle leaders are turning to technology to improve access. Ballad Health, for instance, has partnered with payers on data exchange to streamline patient registration and offer more digital tools for patients to manage scheduling and payments.
"We're really, really pushing our organization forward into the digital," Shana Tate, Ballad Health’s chief revenue officer, told HealthLeaders.
Executive Order Puts 340B Drug Pricing Back in the Spotlight
The Trump administration reignited debate over the 340B Drug Pricing Program when it issued an Executive Order on drug pricing for insulin and injectable epinephrine while also instructing the Department of Health and Human Services to consider reimbursement adjustments for discounted drugs.
Hospitals participating in the program say the 340B discounts are essential to their organizations’ financial health. However, critics say many hospitals fail to use the funds for the marginalized populations that the program was intended to help.
Congress Considers Legislation to Restrict Prior Authorization
With provider frustration over prior authorization (PA) reaching a boiling point, policymakers have been exploring legislation to limit burdensome requirements from payers.
Earlier this year, Rep. Mark Green, MD (R-Tennessee) introduced the Reducing Medically Unnecessary Delays in Care Act of 2025. The law would require physician review of PA decisions for payers participating in federal health programs and require increased transparency on claim denial rates and PA criteria.
“No one should lose out on medical care because an AI algorithm is challenging what a doctor has already deemed a necessity,” Kim Shrier, MD (D-Washington), a cosponsor, said in a statement.
Payers' Rising Costs Spell Trouble for Rev Cycle Leaders
Payers were hit with higher-than-expected medical costs and lower-than-expected premium revenue to close out 2024. In January, UnitedHealthcare revealed in an earnings report that high demand for services among Medicare and Medicaid beneficiaries was a main driver behind its poor financial performance. Cigna, too, failed to meet earnings projections in the final quarter of 2024.
Financial woes at some of the largest payers should put revenue cycle leaders on alert. Payers will likely look to premium increases and provider reimbursement to boost their bottom lines.
Payer-Provider Software: 5 Strategies for Smooth Sailing
Revenue cycle teams are increasingly reliant on a wide range of technology, but finding solutions that actually reduce friction is easier said than done, according to Debbie Schardt, vice president of revenue cycle and utilization management at MultiCare Health System.
To ensure that technology solutions are effective, health systems need a clear vision and strategy to properly vet vendors, Schardt says.
Throw out your pens and paper. Technology has transformed not only the way that health systems bill patients, but also the way they communicate with patients about their financial responsbilities.
On this episode of HealthLeaders HL Shorts, Moffitt Cancer Center Senior Director of Patient Financial Services Andy Talford discusses how technology is changing the patient financial experience and helping health systems to develop accurate pricing estimates.
Drug companies are more likely than hospitals to violate 340B regulations, according to a recent American Hospital Association report.
The 340B Drug Pricing Program has been under constant attack on multiple fronts, although drug companies have arguably led the charge. Now, the American Hospital Association (AHA) is firing back.
In a recent review of Health Resources and Services Administration (HRSA) data, AHA found that participating drug companies are less likely to be audited and more likely to violate 340B rules than hospitals.
AHA Turns the Tables with HRSA data
HRSA was given authority to issue 340B regulations and to audit 340B participants, including both hospitals and drug companies, when the program was established in 1992.
Among the rules governing hospital participation, one prohibits participants from giving 340B discounts to ineligible patients and another prohibits them from receiving both a 340B discount and Medicaid rebate on the same drug. The first type of violation is referred to as a diversion and the second as a duplicate discount. HRSA can require repayment of 340B discounts to drug companies if a hospital violates either rule.
HRSA audits approximately 160 participating hospitals each year, or around 6% of the total number of participating hospitals.
AHA determined that adverse findings for either type of violation declined by 62.1% between 2018 and 2022. The AHA report showed that 39.7% of audited hospitals violated diversion rules and 30.8% violated duplicate discount rules in 2018 compared to 13.2% and 10.7%, respectively, in 2022.
Among its rules governing participating drug companies, HRSA prohibits the sale of 340B-eligible drugs to participating hospitals at or above the 340B ceiling price. HRSA can require companies violating this rule to repay affected hospitals for the total amounts of the overcharge.
HRSA audits approximately five drug companies per year, or 0.6% of all participating drug companies.
Of the 25 HRSA audits conducted between 2018 and 2022, 60% revealed a violation. Of these, only one did not require repayment. Meanwhile, the violation rate for hospitals fell each year from a five-year-high of 71% in 2018 to a five-year-low of 26% in 2021, and then rose slightly to 28% in 2022, according to the report.
Drug Companies and Lawmakers Push for Stricter Oversight
In recent years, drug companies have consistently accused provider organizations of using 340B funds for purposes beyond the original scope of the program and blamed HRSA for lax oversight.
Pharmaceutical Research and Manufacturers of America (PhRMA), an industry group representing drug companies, claimed in an October 2024 letter to HRSA that growth in Medicaid managed care organizations has increased the risk of duplicate discount violations and accused the agency of ignoring government watchdog recommendations to ramp up oversight.
“We continue to have serious concerns about persistent and often illegal abuse of 340B, which is driving up costs for patients, employers and taxpayers,” PhRMA Senior Vice President Alex Schriver said in a November 2024 statement.
“Hospitals are taking a ‘just trust me’ approach to requesting 340B discounts on medicines despite well-documented abuses,” the statement continued. “For too long, the Department of Health and Human Services has refused to implement basic transparency and accountability requirements needed to prevent illegal activity.”
Drug companies aren’t the only ones suspicious of how hospitals use the 340B program. As the program has grown, federal legislators have taken note. In a report on the program released earlier this year, Senator Bill Cassidy (R-Louisiana) called on Congress to consider stricter oversight.
“This investigation underscores that there are transparency and oversight concerns that prevent 340B discounts from translating to better access or lower costs for patients,” Cassidy said in an April 24 statement. “Congress needs to act to bring much-needed reform to the 340B Program.”
However, AHA has now turned the tables on drug companies, suggesting that legislators and regulatory agencies should turn a more watchful eye on them.
“Policymakers should reject the baseless claims made by drug companies of widespread program abuse by 340B hospitals and urge HRSA to increase their audits of drug companies,” the AHA report concluded. “Greater oversight of these drug companies is necessary to ensure the continued success of the 340B program for the millions of vulnerable patients and communities nationwide who rely on it.”
Inconsistent payer rules are a major pain point for revenue cycles with direct clinical and financial impact on patients, according to Northwell Health's Christine Migliaro.
The prior authorization process is a well-known source of frustration for providers and a significant driver of administrative burden. In this HL Short, Christine Migliaro, vice president of front-end revenue cycle operations at Northwell Health, discusses the top challenges she encounters in the PA process. She outlines how a lack of standardization, staffing issues and slow payer response times create confusion and frustration for providers and patients alike.
Migliaro was a panelist during a recent HealthLeaders Revenue Cycle NOW Online Summit. Read more about the discussion or watch a recording of the full event here.
More than 40 payers have voluntarily committed to significant prior authorization reforms, but will this time be any different?
More than 40 payers have signed onto an agreement to limit and simplify prior authorization (PA), according to an announcement from AHIP.
AHIP maintains that PA safeguards patients from exposure to low-value and inappropriate care that deviates from evidence-based guidelines, but also recognizes the frustration that patients and providers feel when provider-recommended care is delayed or denied during PA review.
Signatories to the pact include Aetna, Cigna, Humana, UnitedHealthcare, and numerous affiliates of the Blue Cross Blue Shield Association. Proposed changes would benefit more than 250 million patients across multiple insurance markets, including the commercial, Medicare Advantage, and Medicaid managed care markets, according to the announcement.
The 6 Pillars of the Pact
Signatories to the pact have voluntarily committed to a set of six specific reforms.
Standardizing Electronic Prior Authorization
Lack of technological standardization across payers has long frustrated revenue cycle leaders. For instance, Ochsner Health has successfully automated some components of the PA process, but too few payers use digital platforms that cooperate with its core EHR to drive significant efficiency.
“We’re not able to connect this way to all of the payers and see that big volume that we would like,” Savanah Arceneaux, director of pre-service & financial clearance at Ochsner, said during a recent HealthLeaders Revenue Cycle NOW Online Summit.
As part of their pact to improve PA, signatories say they will develop standardized data and submission requirements using Fast Healthcare Interoperability Resources (FHIR) APIs.
Reducing the Scope of Claims Subject to Prior Authorization
Signatory payers offering Affordable Care Act marketplace and Medicare Advantage coverage say they will limit the use of PA to services most prone to variation. They will also share data to allow industry reporting on PA volume.
Ensuring Continuity of Care When Patients Change Health Plans
Currently, patients frequently require new PA approval when they switch health plans. Under the pact, signatories say that they will honor previous health plans’ PA approvals for 90 days when a patient changes health plans.
Enhancing Communication and Transparency on Determinations
Signatory payers are committing to improving member communications on PA denials. This will include notices that clearly explain next available steps for assistance to their affected members and clear instructions on how to appeal decisions.
Expanding Real-Time Responses
Electronic PA has the potential to reduce the administrative burden for providers and reduce turnaround times associated with the PA process. However, interoperability issues have limited widespread adoption.
Only 35% of PA interactions between providers and payers were fully electronic in 2024, according to a recent Council for Affordable Healthcare report.
As part of their commitment to adopt FHIR standards, signatory payers are also committing to submit 80% of electronic PA approvals in real time by 2027.
Ensuring Medical Review of Non-Approved Requests
AI has the potential to streamline and automate components of the PA process, but providers are concerned about using the technology to deny care. Signatory payers have agreed to only use AI to facilitate quicker approvals and require provider review for all PA denials based on medical necessity.
What are Revenue Cycle Leaders Saying?
There is a sense of muted optimism among revenue cycle leaders in response to the announcement from AHIP and signatory payers, particularly around the potential for standardization in electronic PA processes.
“The most noteworthy commitment for me is the push towards real-time authorizations using FHIR APIs,” Seth Katz, vice president of revenue cycle and HIM at University Health Kansas City, said in an email. “If that’s truly realized, it would cut down on delays and reduce friction for both providers and patients.”
These specific commitments largely align with requirements established by the Interoperability and Prior Authorization Final Rule issued by the the Centers for Medicare and Medicaid Services (CMS) in 2024, which would mandate the adoption of an API for PA by 2027. While those requirements would only apply to plans participating in government programs, healthcare leaders have applauded payers for embracing the proposed changes to commercial plans as well.
“Today’s commitment by health insurers, much of which is a plan to implement the CMS requirements established in the Interoperability and Prior Authorization final rule, presents a meaningful opportunity to reduce the patient and provider burden associated with prior authorization,” Terrance Cunningham, senior director of administrative simplification policy for the American Hospital Association, said in a statement to HealthLeaders.
“We are encouraged to see their commitment to implementing these changes beyond federally regulated insurance offerings and across their commercial lines of business, which will enable these reforms to impact a greater number of patients,” Cunningham added.
Despite the optimism, years of push-and-pull between providers and payers has led to an acrimony that tempers expectations.
“I’ll admit, I’m cautious,” Katz said. “Health plans have been promising improvements for years, yet frontline staff still spend hours chasing faxes or sitting on hold resulting in delays of care impacting patients and frustrating physicians.”
“In short, the intent is right, but until there is accountability and measurable progress, most of us on the provider side are reserving judgment,” he concluded.
The numbers are in, revealing a clear performance gap between providers on eight KPIs. See the metrics that separate top-performing provider organizations from the rest and benchmark your own success.
Recent data from Kodiak Solutions shows a clear performance gap, with top-performing provider organizations outpacing their peers on eight revenue cycle KPIs. However, organizations that did not make the highlight reel should not despair. The variations in performance offer revenue cycle leaders a roadmap to plot their own success.
Read more here, or see the infographic below for additional details.
The latest data from Kodiak Solutions shows significant variation among provider organizations in their performance against key performance indicators (KPIs), offering insight into opportunities for improvement.
In its latest quarterly analysis of KPI benchmarking data, Kodiak Solutions found that 2024 performance against eight key performance indicators (KPIs) varied significantly from one provider organization to the next.
Kodiak releaseddata earlier this year that showed three trends working against revenue cycle leaders. However, top performers in the most recent analysis show that there are areas of opportunity for organizations to improve their revenue cycle performance.
True Accounts Receivable Days
The average true accounts receivable (A/R) days for all provider organizations included in the Kodiak analysis was 56.9, compared with 43.6 for the top 10 performers.
Partnering with clinical teams to improve the accurate documentation of services provided can help denials management teams limit the risk of request for information denials and improve performance against this KPI, according to the report.
Additionally, revenue cycle leaders should routinely follow up with payers to resolve denials, to better understand complex denials, and to receive payment.
True accounts receivable days greater than 90 days
At the top 10 performing provider organizations, the average true A/R days greater than 90 days was 22.5%, compared to 35.9% for all provider organizations.
Tweaking preregistration and prior authorization (PA) workflows to limit bottlenecks in the front-end can help to prevent delays in payment, according to the report. Provider organizations should also maintain focus on older accounts to ensure they are resolved.
Credit Days
The average number of credit days was 0.44 for the top 10 performing provider organization,s while the average for all organizations was 1.10.
Credit resolution is an area where automation can improve performance by leveraging past resolutions to identify and replicate effective past actions, according to the report. Of course, it is important to differentiate by types of credit balances. A strategy that works for credits qualifying as exemptions may not be appropriate for credits identified as over-contractualizations.
Days Not Final Billed
The average number of days not final billed was 9.6 at the top10 performing provider organizations, while the average was 8.0 for all organizations.
Days not final billed is another metric where strong alignment between clinical and revenue cycle teams can help to improve performance, according to the report. Quick response times to physician queries are key to limiting delayed billing.
Bad Debt as a Percentage of Gross Patient Service Revenue
Bad debt as a percentage of gross patient services revenue was nearly the same for the average of all provider organizations and the top 10 performing organizations, at 1.4% and 1.3% respectively. However, the overall top performer wrote of just 0.4% of this revenue as bad debts, about two-thirds less than the average organization.
Providers need to improve pre-service or point-of-service collections to prevent bad debt. To do so, organizations should consider expanding options for digital payments and educating patients on their financial responsibility for their healthcare bills.
Point of Service Cash Collections
Point of service cash collections was 18.9% for all provider organizations versus 25.6% for the top 10 performing organizations.
This is another area where organizations can improve performance by tweaking the patient access components of their revenue cycles to improve patient communication and education to ensure payments.
Final Denials as a Percentage of Net Patient Service Revenue
The average final claim denial rate at the top 10 performing provider organizations was 2.2% compared to the average 2.8% rate for all organizations.
Again, alignment between clinical and revenue cycle teams is critical to limiting denials, according to the report. Provider organizations should also consider using advanced analytics to identify and mitigate the root causes of denials and devoting more resources to denial management teams.
Six-Month Lagged Cash to Net Revenue Value
The average percentage of six-month lagged cash to net revenue value was 98.7% at the top 10 performing provider organizations, versus an average of 94.1% at all organizations.
Leveraging analytics and automated tools to limit administrative denials and focusing on high-dollar unbilled accounts are two ways to improve in this area.
The data from Kodiak reveals a clear performance gap among provider organizations when it comes to KPIs. Closing these gaps require revenue cycle leaders to build strong partnerships throughout their organizations, to strategically implement technology, and to improve the patient financial experience.
In its latest quarterly analysis of KPI benchmarking data, Kodiak Solutions found that 2024 performance against eight key performance indicators (KPIs) varied significantly from one provider organization to the next.
Kodiak released data earlier this year that showed three trends working against revenue cycle leaders. However, top performers in the most recent analysis show that there are areas of opportunity for organizations to improve their revenue cycle performance.
True Accounts Receivable Days
The average true accounts receivable (A/R) days for all provider organizations included in the Kodiak analysis was 56.9, compared with 43.6 for the top 10 performers.
Partnering with clinical teams to improve the accurate documentation of services provided can help denials management teams limit the risk of request for information denials and improve performance against this KPI, according to the report.
Additionally, revenue cycle leaders should routinely follow up with payers to resolve denials, to better understand complex denials, and to receive payment.
True accounts receivable days greater than 90 days
At the top 10 performing provider organizations, the average true A/R days greater than 90 days was 22.5%, compared to 35.9% for all provider organizations.
Tweaking preregistration and prior authorization (PA) workflows to limit bottlenecks in the front-end can help to prevent delays in payment, according to the report. Provider organizations should also maintain focus on older accounts to ensure they are resolved.
Credit Days
The average number of credit days was 0.44 for the top 10 performing provider organization,s while the average for all organizations was 1.10.
Credit resolution is an area where automation can improve performance by leveraging past resolutions to identify and replicate effective past actions, according to the report. Of course, it is important to differentiate by types of credit balances. A strategy that works for credits qualifying as exemptions may not be appropriate for credits identified as over-contractualizations.
Days Not Final Billed
The average number of days not final billed was 9.6 at the top10 performing provider organizations, while the average was 8.0 for all organizations.
Days not final billed is another metric where strong alignment between clinical and revenue cycle teams can help to improve performance, according to the report. Quick response times to physician queries are key to limiting delayed billing.
Bad Debt as a Percentage of Gross Patient Service Revenue
Bad debt as a percentage of gross patient services revenue was nearly the same for the average of all provider organizations and the top 10 performing organizations, at 1.4% and 1.3% respectively. However, the overall top performer wrote of just 0.4% of this revenue as bad debts, about two-thirds less than the average organization.
Providers need to improve pre-service or point-of-service collections to prevent bad debt. To do so, organizations should consider expanding options for digital payments and educating patients on their financial responsibility for their healthcare bills.
Point of Service Cash Collections
Point of service cash collections was 18.9% for all provider organizations versus 25.6% for the top 10 performing organizations.
This is another area where organizations can improve performance by tweaking the patient access components of their revenue cycles to improve patient communication and education to ensure payments.
Final Denials as a Percentage of Net Patient Service Revenue
The average final claim denial rate at the top 10 performing provider organizations was 2.2% compared to the average 2.8% rate for all organizations.
Again, alignment between clinical and revenue cycle teams is critical to limiting denials, according to the report. Provider organizations should also consider using advanced analytics to identify and mitigate the root causes of denials and devoting more resources to denial management teams.
Six-Month Lagged Cash to Net Revenue Value
The average percentage of six-month lagged cash to net revenue value was 98.7% at the top 10 performing provider organizations, versus an average of 94.1% at all organizations.
Leveraging analytics and automated tools to limit administrative denials and focusing on high-dollar unbilled accounts are two ways to improve in this area.
The data from Kodiak reveals a clear performance gap among provider organizations when it comes to KPIs. Closing these gaps require revenue cycle leaders to build strong partnerships throughout their organizations, to strategically implement technology, and to improve the patient financial experience.
Panelists during a recent National Association of Healthcare Revenue Integrity webinar shared how they are forming strategic partnerships in their health systems to streamline the revenue cycle.
In a recent webinar hosted by the National Association of Healthcare Revenue Integrity (NAHRI), a panel of revenue cycle leaders gathered to discuss the results of NAHRI's recently released 2025 State of the Revenue Integrity Report and associated survey.
The discussion featured important insights on denials management, communicating the value of revenue integrity, and AI in the revenue integrity space, among other topics. Panelists were Jennifer Gardiner, senior director of revenue integrity at the University of Maryland Medical System; Kay Larsen, revenue integrity senior charge assurance associate at Adventist Health Glendale; and Evan Martin, vice president of revenue cycle management at ZoomCare.
Where revenue integrity teams can offer additional assistance
While denials management doesn't typically fall directly under the umbrella of revenue integrity departments, it is certainly an area where they can help. Nearly 60% of survey respondents claimed denials management was a secondary function for their teams.
However, as claim denial rates increase and denials become more complex, revenue integrity departments could help to "pull a lot of the pieces together," Gardiner says.
Revenue integrity teams could also add value in supply management, according to Martin. Providers will too often begin using a new supply, believing it to be reimbursable when that is not the case. By involving revenue integrity early, health systems can ensure that they achieve more value from supplies used in surgeries and other clinical procedures.
Similarly, health systems will often launch a new service line without input from revenue integrity departments, according to Larsen, who relayed an anecdote about a request for support two weeks after the launch of a new line of service. Engaging with revenue integrity departments before new services go live can help health systems to maximize revenue streams from those services.
Communication is key
As Larsen's anecdote indicates, revenue integrity departments can sometimes be overlooked. They need to conduct outreach to draw attention to the value they add.
"We can be proactive and working with departments," Larsen says.
She says she downloads charges for different departments every day, looking for patterns that reveal opportunities to improve, and will call the department to see if the revenue integrity team can help make adjustments.
Although she technically works remotely, she'll occasionally travel to the hospital to work elbow-to-elbow with providers and administrators. During these times, she is often able to help departments optimize their EHR functionality to reduce administrative burden in billing processes.
Similarly, the revenue integrity team at University of Maryland Medical Center conducts what Gardiner calls "revenue integrity roadshows," which are essentially opportunities to meet with practice leaders and show how the team can help.
On the flip side, it is important that revenue integrity teams avoid taking on responsibilities that belong to someone else. It is common for a revenue integrity team to do a task outside of its purview once or twice, and then it becomes a pattern, according to Gardiner.
AI and revenue integrity
Only around half of health systems are using AI in their revenue integrity departments, according to survey results. However, there was a lot of enthusiasm among panel participants for its potential.
AI platforms can be trained in charge capture and charge edits to replicate what human medical coders do in certain instances, according to Martin. This would help to mitigate staffing challenges and free up time for revenue integrity team members to work on tasks that require more complex knowledge.
Additionally, as more health systems adopt AI-powered digital scribe systems, there is potential to reduce the burden of documentation on providers.
However, "revenue integrity needs to be part of that conversation," according to Martin. Revenue integrity involvement ensures that the scribe captures information and uses verbiage that aligns with what is being charged for.
Providers should prepare for the fallout following a recent CMS announcement that it will take a more aggressive approach to auditing Medicare Advantage plans.
The Centers for Medicare & Medicaid Services (CMS) recently announced it will take a more aggressive approach to Medicare Advantage plan audits. Beginning immediately, CMS will conduct annual audits of each of the approximately 550 MA plans available to healthcare consumers, up from the 60 or so it currently conducts each year.
While MA payers will feel the direct impact of heightened regulatory scrutiny, the move has major implications for revenue cycle leaders and their health systems.
See the infographic below to learn how increased action from CMS will affect provider revenue cycles, or read more here.
Provisions of the reconciliation bill currently being considered in Congress combined with expiration of Affordable Care Act tax credits would have significant implications for provider revenues.
Looming policy changes would have significant financial consequences for providers, according to an Urban Institute report funded by the Robert Wood Johnson Foundation. If changes to Medicaid currently under consideration in Congress go into effect and Affordable Care Act tax credits are allowed to expire, providers would see an estimated $1.03 trillion decline in revenue from 2025 to 2034. A surge in the number of uninsured individuals could also lead to a $278 billion increase in uncompensated care costs, according to the report.
See some key figures from the report in the infographic below, or read more here.
