Electronic Health Reporter

By Ryan Chapin, executive director of strategic solutions, and Vijaya Krishna Veeravalli, senior vice president of cloud engineering, AGS Health.

As we head into 2025, several key trends are expected to significantly shape the future of healthcare revenue cycle management (RCM). From managing surging denial rates and evolving workforce dynamics to mitigating rising cybersecurity risks and integrating cutting-edge technologies, healthcare organizations are entering the new year while navigating a complex—often contentious—environment to enhance patient care and operational efficiency.

Navigating an Adverse RCM Environment

Denials, evolving payer relationships, and greater administrative burdens have come together to create what may best be described as an adverse RCM environment for healthcare organizations.

Climbing denial rates, prior authorization requirements, and the costs associated with managing both are among the most significant challenges confronting healthcare organizations going into 2025. According to an American Medical Association (AMA) survey, physicians reported spending nearly two business days per week completing an average of 43 prior authorizations—many of which end in denial.

In terms of denials, the surge is driven in large part by the growth in commercial and government third-party audits, including an increase in the volume of prepayment audits. According to MDaudit, external audit volume more than doubled between 2023 and 2024 and total at-risk dollars increased fivefold. The result was a sharp uptick in final denial dollars across professional (34%), hospital outpatient (84%), and hospital inpatient (148%) settings.

Healthcare providers participating in increasingly popular Medicare Advantage (MA) plans have been especially hard-hit. MDaudit reports that MA-related denials increased by 59% on average across professional and hospital settings in 2024, and the total denials amount for MA plans rose by 51%—a trend that has a growing number of providers reconsidering or dropping participation based on high denial rates and poor payments.

The impact of these trends goes deeper than financial. They add to already high administrative demands that in turn increase the strain on an overburdened—and increasingly costly—workforce that RCM leaders struggle to shore up in a tough recruitment and retention environment. To avoid staff burnout, healthcare leaders are continuing to adapt strategically, including exploring onshore, nearshore, and offshore outsourcing models.

Embracing AI and Automation

AI and automation continue to be a transformative force in healthcare, particularly in terms of RCM and administrative functions where they can alleviate the strain on clinical and administrative workforces and mitigate denial risks.

This includes broader adoption of AI and automation tools to support clinical staff with essential administrative tasks like clinical documentation integrity, utilization management, prior authorizations, and clinical denial appeals. Another tactic is expanding deployment and refinement of ambient technology at the point of care. Doing so helps streamline operations, reduce costs, and improve both the patient experience and revenue outcomes in 2025 and beyond.

Broader utilization of predictive analytics will help healthcare organizations stay ahead of increasing payer denial trends by working to prevent denials before they happen and by prioritizing denials with the highest return on investment. Advances in AI will also drive increased adoption of tools like AI dialers that can manage calls with payers and gather complex information from payer representatives, streamlining tasks like denial overturns and authorization checks.

Finally, on the automation front, healthcare organizations will be deploying AI agents to handle labor-intensive tasks related to clinical and non-clinical appeals, such as drafting appeal packets that humans review before submission.

A side benefit of this growth in AI and automation will be increased patient satisfaction. At a time when patient expectations are evolving rapidly, integrating technology like AI and machine learning will enhance the patient experience. Expect to see greater investments in self-pay technology and automation to educate patients on their financial responsibilities and provide simple, accessible payment options and plans. It is an approach that not only boosts patient satisfaction but also improves revenue collection.

Also expect to see greater centralization of patient access functions, allowing front desk staff to focus on patient interactions instead of prior authorizations and insurance verification.

Thwarting Cybersecurity Threats

Just as AI and automation tools are becoming more powerful, so too are cybersecurity threats against healthcare organizations. In 2025, the healthcare sector’s cybersecurity landscape will be shaped by evolving ransomware tactics, increased regulatory pressures, and the integration of advanced AI-driven defenses.

To combat these rising threats, which could potentially disrupt operations and jeopardize care, healthcare providers will need to adopt proactive measures to prevent service delays and protect patient safety. Financial impacts are likely to escalate, with healthcare organizations incurring direct ransom demands and rising costs related to compliance, cybersecurity improvements, and reputational recovery.

AI will play a larger role in cybersecurity, with new AI-powered tools providing enhanced detection and automated response capabilities. However, as AI itself becomes a target for cybercriminals, healthcare IT leaders must implement rigorous oversight to manage these tools responsibly. To stay resilient, organizations should prioritize advanced strategies like network segmentation, vulnerability disclosure policies, and regular third-party assessments.

Additionally, proactive approaches, such as reducing dependence on legacy systems, applying multi-factor authentication, and maintaining a strict security patch schedule, will be critical to maintaining robust defenses against both established and emerging threats.

While organizations adopt evolving tools and technologies to address cyberattacks, it is equally important for every team member to share the responsibility for vigilance. They can prevent cyberattacks by adhering to security policies, staying informed, reporting suspicious activities, practicing safe online habits, keeping devices updated, participating in drills, and collaborating to strengthen security.

Reshaping the Healthcare Landscape

The transformative trends—positive and negative—shaping the future of healthcare require industry leaders to adapt and innovate throughout 2025 and beyond. From workforce and revenue challenges to cybersecurity, healthcare finance and technology leaders must be open to not only the potential of advanced AI and automation, but also the increased cyberthreats that come with broader use of these tools.

Adopting innovative workforce and technology models to mitigate risks, ease administrative and staffing burdens, and lower associated costs while streamlining RCM processes will help ensure proactive healthcare organizations can successfully navigate these trends and emerge not only unscathed, but successful.