Payer challenges are growing. Here's what CFOs are saying, and what they can do.

Payer denials are a constant and consistent challenge for CFOs. And they're not going away any time soon.

At the recent HealthLeaders CFO Exchange, financial executives from health systems and hospitals across the country talked about payers and their tactics, where the nuanced challenges lie, and if there is any hope for change.

Lay of the Land

According to an Experian report, from 2022 – 2024 the number of providers who said denials are increasing jumped from 42% to 77%. A Kaiser Family Foundation analysis, meanwhile, found that ACA insurers typically deny about 20% of claims.

Additionally, market share in each state plays into how much payers reimburse health systems. Insurance companies have a stranglehold on the market, and CFOs know it.

 A study by AAMC found that the largest systems, on average, have far less market share (a combined 43% of the market share in each state), than the top three large insurers, which collectively hold an average of 82% of the market share in each state. This imbalance drives down the amount that insurers are willing to reimburse hospitals and health systems for patient care.

What CFOs Are Saying

"It's gotten worse, there is no alignment," Julie Soekoro, CFO of Vitruvian Health Care System, said at the Exchange. "We are not growing in the same direction when they have margins as a goal."

CFOs are livid. But they're also exhausted and typically don't feel like there are many options to retaliate against payer tactics. During CFO Exchange roundtables, executives lamented that they don't know how to collaborate with payers or advocate against the stances that payers are taking. Many said they feel that payers typically do not have a sense of what is happening in the market and don't forecast very well, which is why payers are seeing less profits this year.

Generally, CFOs said they are:

* Feeling a little downtrodden by payer negotiation tactics and contracts.

* Want to educate the community and state government on payer challenges.

* Need better cost cutting strategies just to stay afloat.

Contracts

CFOs at the Exchange stressed the need for better negotiations, which would likely lead to contracts with more favorable terms. But they're running up against aggressive tactics.

CFOs could consider taking a negotiation class to bolster their skills, as suggested by Bristol Hospital CEO Kurt Barwis. A background in finance typically doesn't cover communication and negotiation skills, and sharpening their skillset here could help--not only in payer negotiations, but also in day-to-day communications with staff and other executives. CFOs should get curious and ask themselves: What does it take to be a confident, persuasive communicator? 

Bearing With It: Cost-Cutting Strategies

To keep up with payers, CFOs are looking more closely at cost-cutting strategies and other methods of freeing up capital. Executives at the Exchange said strategies that have worked for them include subleasing properties and selling real estate, financing energy management such as HVAC, and other areas of non-clinical spending like landscaping and signage.

Long-Term Strategies: Reform Advocacy

CFOs at the Exchange said they want to educate their community and state governments on payer issues that affect hospital finances and public health, but they are unsure of how to get started.

CFOs can start by doing research on local legislators and connecting with them on important issues.

They can also leverage their financial data and expertise to illuminate the impact of proposed legislation on patient care, cost structures, and healthcare access.

CFOs can also join advocacy groups to discuss strategies, pain points and paths for reform.

Barwis, a registered lobbyist in Connecticut, knows the struggle, and the successes that can come from lobbying.

"In dealing with payer issues, if all you do is focus on the negotiation and dispute resolution processes with your own data and within your four walls - you are missing the leverage a broader organizational voice can yield," he said. "Engaging in advocacy pays untold dividends."

 CFOs are clearly stressed about the workforce, healthcare policy, and succession planning.

The recent HealthLeaders CFO Exchange gave healthcare CFOs an opportunity to vent about their biggest challenges and collaborate on strategies to address them.,

Here are some of the biggest takeaways:

Monitoring and Strategizing for Regulatory Changes

The regulatory space is making CFOs feel powerless. From potential Medicare and Medicaid cuts, to the impact of tariffs on the supply chain, executives discussed how they aren’t exactly sure where to turn or how to prepare.

Members discussed how tariffs will first manifest in the form of shortages, then lead to price increases. Without a clear idea of how vendors will be affected, they’ll have to be nimble in identifying and addressing supply chain costs when or if those tariffs do actually happen. For example, a tariff that affects implants could hit the orthopedic space hard.

Overall, CFOs must realize that every component in the supply chain matters, and tracing all of the components of the supply chain might not be a bad idea.

Potential Medicare and Medicaid cuts are also a top concern. April Audain, CFO of Denver Health, and a panelist at the exchange, noted that “50% of Denver Health’s patient base is Medicaid,”. Several executives said it’s difficult to plan a budget when they don’t know if or when those cuts will happen.

Some members said the American Hospital Association is not an effective lobbyist, and they felt that local state associations are more effective. As a result, some CFOs are taking a more active role in lobbying efforts and voicing their concerns to lawmakers about the impact of potential cuts.

Working With the Workforce

Workforce hardships took center stage at the exchange, prompting CFOs to discuss what they are seeing in their workforce and how they are preparing for the growing trends and challenges.

A few key topics were:

-keeping nurses and physicians satisfied.

-partnering with educational institutions to train and recruit new staff.

-learning how to keep up with union activity.

Nurses and frontline staff are demanding higher wages, and reducing contract labor is a consistent pain point for CFOs. Many members expressed the need to develop their workforce in-house through expanding education platforms.

Nurse staffing ratios are also a big concern for incoming nurses, and CFOs will have to ensure they are setting their health systems up to produce an environment that incoming nurses want to be a part of.

Cultivating Leadership

Succession planning is also heavy on CFO's minds. As the CFO’s role shifts to include more responsibilities, they’re thinking hard about how they will prepare the next generation of finance leaders, including how they can offer them hands-on experience.

Today's CFOs are expected to play a part in technology and innovation strategy, clinical operations, and staff culture. And many CFOs aren’t ready to take on those responsibilities.

To dive deep into how they can prepare their successors, CFOs can consider their own experience when they first jumped into their roles. At the exchange, CFOs were asked to consider some fundamental questions: Who guided them? What challenges were pivotal?

Preparing future CFOs isn't just about teaching them the numbers. It's about developing their judgment, resilience, and strategic vision.

How are CFOs preparing the future finance leaders?

Attendees at last week's HealthLeaders CFO Exchange had one clear take-away: The CFO's role is changing, and they had better be prepared to evolve with it.

The role is no longer just guardian of the bottom line. Today's CFOs are expected to help lead across technology, clinical operations, and staff culture.

And while this is prompting a growing sense of urgency around succession planning and leadership development, many CFOs are behind the curve.

According to a Korn Ferry survey, only 34% of CFOs have a formal succession plan in place. In an industry under relentless pressure, from shifting reimbursement models to digital transformation and labor shortages, that's a large gap.

A Broader, Bolder CFO Role

"CFOs can be involved in anything we want to be involved in, and it makes it more fun," one CFO said during a roundtable discussion. This enthusiasm shows how finance leaders are now embedded across the entire health system, leading EHR investments and working closely with CMOs on cost-of-care models. CFOs today need a working knowledge of clinical operations and a clear grasp of technology's growing influence on care delivery.

Additionally, soft skills are now central to the role. Transparency, empathy, and courage were cited as essential leadership qualities.

"Sometimes we have to say what no one else is saying," one of the executives said.

Successor Development: A Strategic Imperative

During a "CFO Masterclass" on leadership development, attendees were challenged to take a more intentional approach to mentoring and succession planning. CFOs learned how "let go," by slowly integrating staff into decision-making processes and giving them exposure to higher-level responsibilities.

The transition is rarely clean-cut, members noted. It requires clarity about what's being taught through each development opportunity and support through growing pains.

Leaders were encouraged to periodically assess their mentees by answering these questions:

• What are my reservations about this person, and how do others feel?
   
• What would make them at least 80% ready for the CFO role?
   
• What experiences—both inside and outside finance—do they still need?

CFOs were also asked to consider what they wished they had known when they first stepped into the role. Who guided them? What challenges were pivotal? These insights can shape a roadmap for preparing the next generation— not just for financial management, but for full organizational leadership.

Looking Ahead

As the healthcare landscape becomes more complex, the CFO is becoming a connector—between data and outcomes, clinical and operational strategy, and people and performance. With only a third of CFOs actively planning for succession, the profession is risking a leadership vacuum just as the demands of the role are growing.

Preparing future CFOs isn't just about teaching them the numbers. It's about developing their judgment, resilience, and strategic vision. In today's environment, a great healthcare CFO isn't just financially literate, but also tech-savvy, clinically conversant and, above all, people-first.

CFOs are meeting in Florida this week at HealthLeaders’ annual event to discuss the top challenges facing health systems.

With incoming healthcare technology to consider, a formidable workforce shortage, intense policy runarounds, and lurking private equity market disruptors, CFOs are anxious about what’s to come.

Many will be meeting at Florida’s Amelia Island this week for the HealthLeaders CFO Exchange,  where they’ll talk about their experiences and trade ideas on addressing the biggest challenges.

Workforce Hardship

As CFOs try to stabilize their workforce, increased labor costs, reduced productivity, and managing the revenue cycle are looming on the horizon. To retain the right staff, CFOs are realizing they need to set the tone for organizational culture.

Some of the topics to be discussed at the Exchange this week include:

• Keeping staff engaged, particularly during a merger or other change of management;
• Strategies for reducing contract labor, a key pain point for many health systems looking to reduce expenses; and
• Planning for union activity.

CFOs will also discuss how to best merge cultures and operations among integrating systems and what physician recruitment and retention strategies are actually working.

Growth

CFOs will discuss what strategies are working for keeping up with the pace of change. Understanding how to create a business plan around AI adoption will be a big topic, along with how to use new technology to reduce clinician burnout, push medical operational excellence and optimize revenue cycle operations.

Participants will share how they have integrated new technology, such as AI, into their health systems. Understanding how to proactively create and nurture partnerships and connections for the future will also be a crucial discussion topic.

Succession Planning

With CFO turnover and retirements on the rise, members will also dive into succession planning.  This includes developing an understanding of how the CFO’s role is evolving and what new skills are needed to stay effective and relevant at a time when some health systems are reducing their C-Suite.

Facing Payers

Last but not least, CFOs will discuss payer relationships, particularly those dealing with Medicare Advantage. MA has been a roller coaster for health systems and, depending on the individual market, cultivating a successful strategy with the right partners isn't always easy.

Members will discuss how to conduct productive conversations with payers for better contract terms, what investments in revenue cycle operations are most effective with reimbursement, and what is working to minimize risk with Medicare Advantage contracts.

As the tension grows between providers and payers each passing year, identifying which strategies best align health systems and payers to maintain stable, collaborative partnerships will be imperative.

The HealthLeaders Exchange is an executive community for sharing ideas, solutions, and insights. Please join the community at our LinkedIn page.

To inquire about attending a HealthLeaders CFO Exchange event, email us at exchange@healthleadersmedia.com.