Tag: Ryan Chapin

RCM In Transition: Key Trends to Watch in 2025

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

Ryan chapin

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.

Vijaya Krishna Veeravalli

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.

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Alleviating the Prior Authorization Headache  

Matt Bridge

By Matt Bridge and Ryan Chapin of AGS Health 

The prior authorization process has evolved in complexity as the healthcare industry transitions from fee-for-service to value-based care. At the same time, payers are expanding the number of services subject to prior authorization to establish medical necessity and appropriateness. It’s a one-two punch that leaves providers and provider organizations struggling under the weight of a prior authorization burden that, left unaddressed, can have long-term revenue cycle impacts.  

Today’s prior authorization process involves time-consuming steps, including gathering and submitting medical documents to insurance companies and waiting for approval. It also often involves dealing with denials and appeals – all while guidance around required documentation becomes stricter.  

The number of procedures subject to authorization is also expanding, creating new challenges for staff who must understand the clinical documentation and office notes necessary to support the authorization. This also means the addition of new administrative requirements with far-reaching impacts on finances, operations, and patients. Additionally, when establishing a centralized prior authorization team is infeasible, expanded prior authorization needs exacerbate the problem of competing priorities for staff tasked with obtaining authorizations amidst other core responsibilities, including patient care. 

Prior Authorization Challenges  

The impact of today’s challenging prior authorization environment is felt in three key areas:  financial, operational, and the patient experience. 

On the financial front, the administrative burden of prior authorization has increased steadily over the years, leading to additional costs and workload. Among the most significant financial impacts are higher administrative costs and reduced or lost revenues due to denials, which can be difficult to overturn. The prior authorization process can also delay cash flow. 

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