Every few months, another health system announces it has deployed artificial intelligence across its revenue cycle. The press release follows a familiar script: reduced denials, fastero authorizations, staff hours reclaimed, efficiency unlocked. What almost never appears in that announcement is a second document, the one that defines how the organization will know, 12 months from now, whether any of that is actually true.
That absence is not an accident. It reflects something deeper about how healthcare has historically treated its administrative infrastructure: as a problem to manage rather than a system to understand. And now, as AI tools move from pilot programs into operational deployment at scale, that gap is now creating real operational risk as AI moves into live production environments.
I have spent more than twelve years working alongside revenue cycle teams, coders, billers, authorization specialists, and CFOs, and I can say with some confidence that most of the people closest to this work are deeply skeptical of headlines. They have seen technology promises before. They remember the EHR implementations that were supposed to streamline documentation and instead added hours to the physician workday. They remember the clearinghouse upgrades that reduced one bottleneck and created three others downstream. They are not cynics. They are people who have learned, through experience, that what a system claims to do and what it actually does inside a live operational environment are often very different things.
That skepticism is not resistance to change. It is exactly the kind of operational discipline that should shape how AI gets evaluated and deployed.
The challenge right now is that the industry has skipped that step. Conference stages are crowded with transformation narratives. Health systems facing tight margins and persistent staffing shortages feel genuine urgency to find operational relief. All of that is understandable. But urgency without accountability is how you end up automating broken processes rather than fixing them. And in the revenue cycle, broken processes do not just affect the balance sheet. They affect whether a patient gets a procedure approved on time. They affect whether a physician burns another hour on paperwork that should have taken ten minutes. They affect the trust that providers, payers, and patients depend on to make the system function.
What I find missing in most AI deployment conversations is a straightforward commitment to answering a basic question before the contract is signed: what does success look like, and how will we measure it independently? Through clean, pre-specified performance benchmarks, first-pass resolution rates, authorization turnaround times, denial overturn rates, measured against a documented baseline and evaluated at regular intervals by people inside the organization who are empowered to say when something is not working.
Part of the reason is structural. Revenue cycle operations in most health systems sit in a complicated organizational space, accountable to finance, connected to clinical operations, dependent on technology infrastructure managed by IT, and constrained by payer relationships that nobody controls entirely. That diffusion of accountability makes it genuinely difficult to assign ownership over AI performance. When a denial rate creeps up six months after an AI tool goes live, the question of who is responsible for diagnosing why, whether the technology team, the RCM leadership, or the vendor, rarely has a clean answer. So the question often goes unasked, or gets absorbed into the background noise of operational management.
The other part is cultural. Healthcare administration has a long tradition of accepting complexity as inherent rather than examining it as designed. Prior authorization, to take the most visible example, has become so procedurally dense that many organizations have simply built workforces around navigating it rather than questioning whether the navigation itself can be fundamentally restructured.
The scale of that problem is not abstract: according to CMS, more than 53 million prior authorization requests were submitted to Medicare Advantage insurers in 2024 alone, and of the denials that were appealed, more than 80% were ultimately overturned. AI can reduce the friction of that navigation. But if the underlying logic of the process remains unchanged, if the criteria are still opaque, the payer responses still inconsistent, the documentation requirements still disconnected from clinical reality, then automation speeds up a broken system without healing it. That is a meaningful difference, and it is one that outcome measurement frameworks need to be designed to capture.
What better practice looks like, in my view, is fairly concrete. It starts with a pre-deployment audit with a clear-eyed inventory of where the revenue cycle is actually failing, not where it looks like it might benefit from technology. It requires that AI tools be evaluated against those specific failure points, with defined thresholds for what improvement looks like at thirty, ninety, and one hundred eighty days.
It demands that operational staff, the people who work inside these processes daily, have a formal mechanism to surface when a tool is creating new problems, not just solving old ones. And it insists that model performance be reviewed on a scheduled basis, because the payer landscape does not hold still, and a model trained on last year’s coverage criteria may be quietly degrading against this year’s.
None of this is technologically complicated. It is organizationally disciplined. And that distinction matters, because the conversations health systems need to have about AI accountability are not primarily conversations with vendors. They are internal conversations about how seriously the organization intends to govern its own operations.
Policymakers have a parallel responsibility. As federal and state attention increasingly focuses on prior authorization reform and payer transparency, there is an opportunity to embed outcome reporting requirements into any regulatory framework that governs automated administrative decision-making. An AI system that accelerates a payer’s denial process without improving clinical appropriateness is not a healthcare innovation. It is an efficiency tool for the payer, not an improvement in care decision-making. Regulators should require that distinction to be measurable and reported, not left to vendor interpretation.
The potential here is real. The revenue cycle absorbs an extraordinary share of healthcare resources, resources that could otherwise support direct patient care, workforce retention, or capital investment in underserved communities. Thoughtful AI deployment, governed by rigorous measurement, can free up meaningful capacity across the system. I have seen it work in contained, well-designed implementations. The problem is not that the technology cannot deliver. The problem is that without accountability frameworks, we will not actually know when it does, and we will not catch it when it does not.
Healthcare has spent years debating what AI can do. It is past time to build the infrastructure to find out what it is doing.
By Matthew Bernier, product management director and VP of PayerSync, Rectangle Health.
Healthcare providers are at a defining point, grappling with financial strain, often stemming from outdated and inefficient revenue cycle management (RCM) strategies.
These strategies, often riddled with manual inefficiencies and slow to adapt, are no longer sufficient to navigate the relentless tide of evolving payer regulations, skyrocketing denial rates, and the growing financial burden on patients.
RCM is widely recognized as an essential framework supporting the financial health and operational effectiveness of medical practices. Despite significant advancements in healthcare technology, many reimbursement processes remain outdated, cumbersome, and fragmented. This escalating pressure isn’t just a minor inconvenience; it’s actively eroding reimbursements, stifling cash flow, and ultimately compromising a provider’s ability to deliver essential patient care.
New research from American Express and PYMNTS revealed that 67% of healthcare payer executives reported that their firms’ reliance on manual payment systems is hampering their operational efficiency. Additionally, nearly 74% said that these outdated systems are increasing their exposure to regulatory fines and compliance penalties. Healthcare providers are already feeling the sting, meaning streamlining these processes is vital for redirecting valuable resources toward patient care and clinical services.
The Pitfalls of Outdated Reimbursement Methods
Many inefficiencies originate from continued reliance on traditional payment systems, notably paper checks and standard ACH transfers. While foundational in their own right, these payment methods were not designed to accommodate healthcare’s specialized requirements, such as the secure, compliant transmission of detailed patient remittance information. Providers frequently find themselves manually reconciling Explanation of Payments (EOPs) with deposits, a process prone to delays, errors, and unnecessary complexity.
Although ACH transfers represent a digital improvement over paper checks, standard ACH formats typically cannot include the comprehensive remittance details essential for precise and timely payment reconciliation. Additionally, financial institutions lack the infrastructure and incentives to manage HIPAA-sensitive information securely, adding administrative burdens and complexity for healthcare organizations.
Mounting Financial Pressures on Providers
The financial impact on providers due to outdated reimbursement methods is evident. According to a 2024 survey by Experian Health, 73% of healthcare administrators reported an increase in claim denials, rising from 42% just two years prior.
Several factors contribute to this decline:
Increased claim denials: Providers are seeing higher initial claim denial rates, especially from commercial health plans and Medicare Advantage plans.
Higher patient financial responsibility: The rise in high-deductible health plans and cost-sharing arrangements has placed more financial burden on patients, complicating the collection process.
Bad debt write-offs: Insured patients are increasingly accounting for significant amounts of bad debt, creating additional financial strain on healthcare providers.
Ongoing healthcare staffing shortages only amplify these challenges. Healthcare leaders report severe impacts from staff shortages, with 81% citing delays in care, longer wait times, and reduced access to essential services as significant issues. Providers, already stretched thin, are forced to divert limited resources to manage overdue payments, exacerbating administrative strain and creating uncertainty around cash flows and financial projections.
The Power of Next Generation Payment Rails
Addressing the persistent challenges of healthcare payments, next-generation digital payment rails offer providers a transformative path forward. Unlike standard ACH transfers, these advanced digital rails embed detailed remittance data directly within transactions, providing immediate, automated reconciliation. This integration reduces the time providers spend matching payments to claims, dramatically decreasing accounts receivable (A/R) days.
Providers already leveraging these innovative payment rails have experienced reimbursement processing times shrink from weeks to days. These streamlined systems automatically post reimbursements directly into practice management systems (PMSs) or electronic medical records (EMRs), eliminating manual data entry and reducing costly errors.
Next generation payment solutions meet patients’ evolving expectations. Modern online digital payment portals provide patients with transparent billing, cost estimates, flexible payment options, and insurance information. This is particularly important as nearly seven in 10 Gen Z patients report having payment issues with their latest healthcare service, highlighting a strong preference for convenient, contactless, and online payment methods. For providers, these solutions streamline billing through stored patient payment methods, deliver instant notifications, and offer consistent reporting across all payers, significantly enhancing financial visibility and control.
Digital Reimbursement: Accelerating Cash Flow and Accuracy
To overcome revenue cycle challenges effectively, providers should embrace automation and digitization within their reimbursement workflows. Modern, healthcare-specific digital reimbursement solutions securely integrate detailed, HIPAA-compliant patient data directly into financial transactions. This integration reduces manual reconciliation, enhancing accuracy and accelerating the reimbursement cycle.
Digitally automated reimbursement solutions consolidate various payment forms into a unified system, offering providers real-time transaction visibility and simplified reconciliation. By automating routine administrative tasks, healthcare staff can dedicate more time to high-value activities focused on patient care and practice growth, resulting in improved patient experiences and outcomes.
Additionally, automated reimbursement solutions provide immediate insights into payment statuses, equipping providers with accurate revenue forecasting, efficient budgeting, and proactive financial management.
The Path to Financial Strength
As reimbursement complexity grows, adopting automated and digitally integrated payment systems designed explicitly for healthcare becomes essential. Providers who modernize their reimbursement processes today will position themselves to handle industry challenges more effectively, securing their financial health, enhancing operational efficiency, and ensuring superior patient care for years to come.
AGS Health, a leading provider for tech-enabled revenue cycle management (RCM) solutions and strategic growth partner to healthcare providers across the U.S., announces the acquisition of the India-based patient access outsourcing business unit of the Florida-based healthcare technology company Availity.
With more than half of U.S. hospitals anticipating a year of negative margins, achieving full and accurate reimbursement for services has never been more critical. With this expansion, AGS Health is positioned to provide faster, more flexible financial clearance solutions at an even greater scale to help increase customers’ first-pass reimbursements rates.
“At AGS Health, our focus is greater financial freedom for healthcare organizations, allowing them to reinvest in their vision for superior patient care,” said Patrice Wolfe, CEO of AGS Health. “With this acquisition, we can better equip our customers with the tools and expert services necessary to help overcome payer complexities, reduce denial rates, mitigate revenue leakage, and accelerate cash flow on the back end.”
The acquisition allows AGS Health to expand the capabilities of the AGS AI Platform with new technology to enhance accuracy and scalability and further streamline patient access operations. The technology platform is capable of automatically determining, submitting, and verifying the status of prior authorization requests. Additionally, estimates of the patient’s out-of-pocket cost can be automatically generated based on payer rules set by the healthcare organization.
The move will also add approximately 200 patient access service team members to AGS Health’s global team of more than 11,000 college-educated, trained RCM experts. With labor shortages devastating all areas of the healthcare system, outsourced services are more critical than ever – particularly as financial clearance performance depends on access to qualified, skilled labor.
“This acquisition is just part of our continued investment in our customers’ success with automation technology and expert teams,” Wolfe adds. “As growth partners, we are committed to equipping our customers with flexible, modern solutions to mitigate risk and adapt to change. This is part of what we call ‘AI with a human touch’.”
By Brian Cafferty, vice president of RPA development, Tebra.
Robotic process automation (RPA) is a software technology that uses “bots” to replace repetitive, rule-based tasks and processes. In everyday life, people use RPA technology anytime they rely on form auto-fills, credit card payments, call center menus, or banking automation.
While the hyper-automation trend has taken root in most industries, bots are just starting to catch on in medical practices. The average practice performs many time-consuming and repetitive administrative tasks that require large amounts of data to be pulled, categorized, summarized, and reported. However, these tasks don’t require specialized knowledge. RPA can provide task automation across the organization, from front-office tasks to operational processes to patient interaction and bill payment. In addition, minimizing manual processes can reduce error rates that cost time and money.
Our customers and early adopters of RPA report that within the first three to six months of implementation, they saw improvements of 50% in operational efficiencies, 200% in claims processing speed, 30% in revenue per clinical encounter, 95% clean claims and only 2-3% claim denial rates.
Automating essential workflow
Onboarding new patients is a process you can automate while improving the patient experience. For example, a bot can provide an integrated data connection between your electronic health record (EHR) and billing platform. As patients complete the intake and insurance forms, this information is automatically entered into your billing platform.
As more patients demand convenient digital touchpoints, bots can maximize back-office efficiency with appointment scheduling. Bots can process patient appointment requests by presenting available time slots and adding selected appointments to the practice’s database. In addition, the RPA tools can assist with patient check-in, validating health plan coverage, and arranging pre-authorizations for planned procedures and treatments. For smaller practices or those with lean office staff, these automations can significantly reduce time spent on non-revenue-generating tasks.
For practices that need to migrate patient EHR data when transitioning from one practice management software to another, bots can initiate keystrokes to create a clinical note for each patient encounter to ensure the patient’s complete medical history is captured accurately.
By reducing the administrative tasks that do not require specialized knowledge or a human touchpoint, your practice staff can focus on delivering better care to improve patient outcomes and grow your practice.
By Joe McMurray, senior vice president of patient experience, Zotec Partners.
A July 2022 report confirmed what most providers have seen coming during this time of rampant inflation: Unexpected healthcare costs can be crippling for the majority of Americans. Many factors have influenced this fact, including rising high-deductible plans, ongoing pandemic stress, and the general truth that patients are often sick, scared, or confused — or a mix of all three. This strain poses many challenges for healthcare providers and their revenue cycle teams, highlighting the importance of patient-centric financial experiences.
Calculating cost estimates on unexpected medical encounters is a very challenging process, and if done so inaccurately, it can push patients to switch medical providers. According to PYMNTS, 46% of unwell patients have canceled an appointment because of high cost estimates, and two-fifths of patients who received inaccurate cost estimates spent more on healthcare than they could afford. Healthcare providers and organizations have seen drastic reductions in payment as a result.
Understanding Why Patients Don’t Pay
According to research by Debt.com, 45% of Americans have outstanding medical debt. Some reasons why patients can’t pay their debts includes financial hardship (which can be from job loss), murky healthcare billing systems, unexpected billings (especially during the holidays), and ambiguities with insurance. Inflation isn’t helping the situation, with almost 60% of people forgoing healthcare due to higher living expenses across the board.
Unpaid medical bills and their resulting medical debt are typically the outcomes of a combination of factors. First and foremost are unexpected healthcare costs, which is precisely what it sounds like: unplanned and unbudgeted medical expenses. The continued hike in high deductible plans and increased out-of-pocket expenses has also hit healthcare consumers’ wallets.
Additionally, uncertainty around billing is an issue for patients who need clarification on their responsibilities, billing due dates, or even which providers they saw during their encounters. Finally, technology can be a barrier to patient payments. When patients can’t access, understand, or act quickly on their bills, they are less likely to make a payment or pay in full.
Improving the Financial Experience for Patients
Health systems and clinicians shape patient care experiences, which can unfortunately lead to medical debt and devastating consequences in certain circumstances. So, what can healthcare providers do to alleviate these financial pressures for patients and set them up for success beyond diagnosis and treatment?
The first and most obvious response is to get the bill covered by the carrier prior to sending it to the patient. With advanced technology partners, this is a goal that should and can be explored. However, if there is still a patient portion, the following four steps will enhance the experience for all:
• Patient Education and Awareness
Healthcare organizations can help individuals make educated decisions about how to plan and pay for their care. Enhancing medical billing transparency means ensuring patients are aware of out-of-pocket expenses, including cost-of-care discussions in provider-patient interactions.
With the federal No Surprises Act in effect, patients now have increased transparency into what scheduled medical encounters cost. However, these estimates can only be accurate if no unplanned medical care or treatment is needed during service. By communicating up front with patients about additional costs, they will be more empowered when making healthcare decisions.
Once a patient receives a bill, it should be accurate, easy to understand, and convenient for them to take action.
• Payment Choices and Flexibility
Healthcare organizations can help patients with medical expenses by expanding, simplifying, and innovating payment options and plans. Offering more ways to pay based on patients’ preferences is essential, as is giving patients more time and flexibility. No two patients are alike, and based on their propensity to pay, providers can offer patients customized communications that offer payments through paper, phone, text, email, or portal access.
Offering payment plans is a proven way to increase collection rates. Patients who are offered additional time, even if it’s just a few weeks more, are more likely to make payments or pay their bills in full, reducing likelihood of medical debt. By adding a few more weeks to the billing cycle, providers can offer patients a more dignified and effective way to pay for services at a time most suitable for their financial situations.
• Compassionate Care Continuum
Healthcare expenses are a source of anxiety for many patients. Intimidating collection steps won’t do them any good, but a more compassionate billing approach could help increase patient payments.
Team members should utilize compassionate language as they guide patients through their journeys. When patients are confused, they should be met with a responsive contact center that leads with empathy and understanding. After all, calm patients feel more confident in their billing and are increasingly more vested in paying for the services rendered.
• Simple and Streamlined Technology
Providers should implement portals that make it easy for patients to pay bills, schedule appointments, review payment plans, and share feedback. Empowering patients with a self-service option enables greater transparency and customized experiences — all leading to higher payment capture.
By developing an extensive and dynamic patient journey by persona, organizations can customize communications by patient demographics and propensity-to-pay. This allows them to use the most innovative, intelligent means to request and receive payment. If providers don’t have a portal that meets these criteria, there are technology-enabled revenue cycle services partners that can further enhance the patient experience.
No two patients have the same pain points when it comes to medical expenses. And considering the economic landscape evolves daily, healthcare needs to be ready to adjust accordingly. Providers need to find flexible and intuitive ways to connect with patients and offer a variety of payment options to engage compassionately throughout the entire healthcare journey.
As the impact of COVID-19 continues to unfold, it is becoming abundantly clear we can no longer separate physical and fiscal care – patients cannot afford it. Provider payment systems and practice management solutions, too often regarded as an afterthought, can play a significant role in the financial well-being of patients by preventing the accumulation of debt and absorbed costs.
In the coming years, the lasting implications of the pandemic will no doubt result in a financial burden that compounds these challenges, creating an urgent need to streamline payments and administrative tasks on behalf of patients.
A Patient Need, Unfulfilled
The effect of inefficient and inflexible payments is best understood on a broad scale. According to a 2021 study by Rectangle Health and PYMNTS1, there is a significant disconnect between the payment solutions patients are interested in and the solutions they are offered. Per the study, 63% of patients are “very” or “extremely interested” in using payment plans, though only 44% were offered them. Many patients are also interested in access to digital payments, but they are not offered options either.
To put this financial disconnect into a medical equivalent, consider a patient with a heart condition who is dependent on the provider administering swift and decisive treatment. Waiting to get treatment would only exacerbate the issue and have potentially fatal consequences. Similarly, an inefficient practice management system that allows a patient to miss payments builds debt. The consequences in practice management, however, are not restricted to a single patient – others may absorb costs, too, build debt of their own and the entire practice can be put at risk.
Medical debt has a significant and well-documented impact on patient health. When patients miss payments, they are more likely to avoid their provider and assume they cannot afford to treat new health issues that emerge. A 2016 study by the Kaiser Family Foundation2 found that about three out of 10 patients reported problems getting health care they needed directly as a result of unpaid bills. Those struggling with bankruptcy are even less likely to seek medical attention when needed, but luckily a bankruptcy attorney on a site like Stoneroselaw.com should be able to help.
While some physicians are beginning to see patient visits return to pre-COVID-19 volume, many independent practices are still struggling. In fact, nearly nine in 10 practice owners or partners that responded to a recent survey indicated they were concerned about the future of their practices, and more than half of all respondents (54%) were “very concerned.”
Months of reduced activity, particularly at practices that suspended elective procedures in the spring, have taken a heavy toll on revenue. As a result, many practices are now compelled to take stopgap measures to contain costs.
High unemployment rates continue to create hardships that can strain patients’ finances. Even an indirect impact, such as a job loss sustained by another member in the household, can affect a patient’s willingness to seek needed treatment or impair their ability to pay for medical services.
To ensure patients can get access to the care they need, as well as their organization’s financial longevity, each health care provider needs to reassess their business strategy with an eye towards improvement in operations. The COVID-19 crisis has exposed many areas of inefficiencies that were already affecting revenues before the pandemic began.
Invest in operational efficiencies for better revenue management
Today, practices have less room for inefficiency and must take decisive steps to invest in technology that will drive increased efficiency at lower costs. Imperatives for a practice thrown into disarray by changes related to COVID-19 are to stabilize the practice by taking better control of the business process. This includes steps to strengthen contingency plans to minimize disruptions and reduce patient liability during the reimbursement lifecycle of the patient, while ensuring the safety of patients and staff during these challenging times.
Reducing patient liability is both a strategy and a desired outcome the practice should aim for as it fine-tunes its management of the revenue cycle, which extends from the patient’s initial appointment through successful payment collection.
The practice can reduce increases in aged receivables by greater attention to pre-visit efforts. Performing eligibility checks and verification of benefits sets expectations and provides improved financial transparency for the patient which sets the stage for a smoother patience experience.
Since the start of the COVID-19 outbreak, the healthcare industry has had to adapt to closures, adopt automated processes and utilize telehealth more than ever before. Providers have been inundated with patient messages, phone calls and payments; in need of mobile-first solutions and custom workflows.
Relatient, a SaaS-based patient engagement company, helped University Physicians’ Association (UPA) to revamp its patient billing process for medical practices across East Tennessee, streamlining revenue cycle management (RCM) operations and extending a patient-friendly financial experience to patients and caregivers. The result was a 43% increase in patient payments with mobile-first billing.
Flexibility is key to meeting patient needs, and Relatient granted UPA the ability to extend self-service tools like mobile payments to the majority of patients who want this kind of access without neglecting those who still prefer to interact over a phone call. In addition to Relatient’s work with UPA, there are many other simple, practical ways to improve the patient experience.
While some physicians are beginning to see patient visits return to pre-COVID-19 volume, many independent practices are still struggling. In fact, nearly nine in 10 practice owners or partners that responded to