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If your A/R days are climbing and the denial rate keeps inching upward, you’re not dealing with a rough month or a temporary slowdown.
It is an indication of a deeper structural shift in how payers review, process, and delay your claims. Many healthcare leaders that oversee revenue cycle operations are openly acknowledging this change.
As per HFMA Survey report ‘2026 Revenue Cycle Management Trends’, payer challenges remain a top concern. 88% of executives ranking payer issues among their top three concerns.
Healthcare leaders point to increased denials, prior authorization delays, excessive documentation requests, unclear denial rationales, and reduced reimbursement rates as indicators impacting their A/R.
Let’s look at what healthcare leaders are saying about this structural shift and what it means for practices without a strong revenue cycle management team behind them.
What Do Experts Say About the Growing Complexity of Claim Denials?
Beth Carlson, VP of Revenue Cycle at WVU Medicine (West Virginia University Health System), drew a distinction that many billing directors have sensed but struggled to articulate.
She noted that the denial problem has become a complexity issue rather than a volume problem. This distinction is highly consequential for how billing teams are structured.
“We are seeing more denials not only in volume, but in ambiguity and variety and complexity,” Carlson said.
It is not just that more claims are being denied but the denial rationales are harder to interpret, appeal, and prevent the next time.
Because the logic behind them is inconsistently enforced by payers – sometimes by AI systems operating at scale without meaningful human review.
According to the State of Claims report, more than 40% of providers reported denial rates exceeding 10% in 2025, a figure that has increased steadily since at least 2022.
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Health systems are responding by evolving from reactive denial management to prevention strategies that engage clinical, legal, and IT teams before claims are submitted.
Payer Behavior Has Become a Daily Operational Reality
Tom Buckley, Senior Vice President of Revenue Cycle and Managed Care at Virtua Health, describes the payer relationship with the term the team uses internally: payer shenanigans.
“We use the phrase ‘payer shenanigans’, is how we like to describe that,” Buckley said.
The term captures something that formal reporting rarely does, the experience of revenue cycle teams who encounter payer behavior that is contractually defensible but financially destructive over time.
Virtua saw more cases where payers reassess E&M coding after claims are submitted and reduce the code level, which results in lower payments to the providers. “Payers will come back for E&M coding and downgrade the E&M code, which, in essence, is paying you less,” he said.
In order to combat this lack of clarity in denial communications, Virtua centralized their payer denial correspondence within patient accounting. They also tightened their contract language to limit appeals driven by payer vendors rather than payer clinical reviewers.
Tom Buckley demanded discipline across the revenue cycle management team to keep them aligned against this backdrop. He holds monthly staff meetings to discuss collective goals and review objectives. The review cash collections, A/R days within patient access operations, and the alignment of patient satisfaction goals with the registration team’s responsibilities.
The lesson for healthcare providers is the same one Virtua learned at scale: if you are not tracking denials by payer, by reason code, and by trend, you are just managing the symptoms rather than the issue itself.
Regulatory Protections Exist on Paper, But Payers Are Not Following Them
Paul LePage, Vice President of Revenue Cycle at UC Davis Health, shared his perspective of what happens when practices rely on state regulations to enforce payment timelines.
Many states have established new payer regulations to limit denials and delays, but they aren’t necessarily following them.
California enacted a law which requires health plans to pay or contest claims within 30 calendar days of receiving them, including weekends and holidays. LePage’s team found that payers were already non-compliant with the requirement, prompting them to build internal systems to track interest obligations and hold payers accountable for failing to meet the deadline.
The experience reflects a broader reality that revenue cycle leaders are acknowledging. Regulatory protections create legal leverage, but enforcing that leverage requires documentation, tracking infrastructure, and a willingness to dispute non-compliance directly.
For practices that do not have those systems in place, the regulation offers little practical benefit.
Denial Rates at the Health System Level Are Far Higher Than Most Practices Realize
Michele Cusack, CFO at Northwell Health, named the numbers publicly. Certain payers have initial denial rates as high as 30–35%, creating a significant administrative burden across the revenue cycle management. This reorients the economics of denial management.
Payer denials turn into a huge operational mess, affecting everything from cash flow to staffing to planning. It’s not just about appealing these denials faster anymore, the big issue is the sheer amount of administrative efforts flooding the revenue cycle.
Across the industry, hospitals collectively spent $25.7 billion in 2023 appealing denials. And still an estimated 50% of denied claims are never resubmitted at all, which shows that revenue is recoverable but simply abandoned.
Every denied claim consumes staff time from double-checking eligibility, authorizations, reviewing codes, filing appeals, managing documentation, hounding payers, all while payment gets delayed. Even if they eventually get reimbursed, the extra effort drives up the cost just to collect what they’re owed.
Practices don’t get off easy either. Data from HFMA and MGMA puts the cost to rework a denied claim anywhere between $25 and $118 per claim.
That’s why the most forward-looking healthcare providers are making a strategic shift. They’re moving denial management to the front end of the revenue cycle, instead of waiting for issues to surface downstream.
Basically, the top healthcare providers now see denial management as much more than appeals. They treat it as core infrastructure, preventing friction and plugging revenue leaks before a single claim even lands at the payer’s desk.
Prior Authorization Has Become a Clinical and Financial Problem Simultaneously
Prior authorization has become the most operationally disruptive payer requirement in modern revenue cycle management.
The 2024 MGMA survey found that:
89% of providers reported prior authorization requirements increased compared to the prior year, a trend that has continued for nearly a decade.
94% of physicians report prior authorization delays have directly resulted in patient care being delayed or abandoned. The consequences extend beyond billing.
This is not a billing efficiency problem. It is a clinical and financial problem simultaneously.
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Top Investment Priority For Healthcare Revenue Cycle Leaders in 2026
Revenue cycle leaders at health systems are naming prior authorization automation as a top investment priority for 2026.
Kerry Rogers, Associate Chief Revenue Cycle Officer at MUSC Health, said that prior authorization automation is essential to manage costs at scale and mitigate financial risk, especially with cuts to Medicaid and ACA subsidies.
Dwight Johnson, Director of Revenue Cycle at Southeast Health, named it his top priority for 2026, alongside predictive AI tools designed to identify potential claim denials before a claim is filed.
The scale of Medicare Advantage’s role in this cannot be overstated. MDaudit’s 2025 Benchmark Report found that medical necessity-related denial dollars from Medicare Advantage plans grew 390% in a single year, the steepest spike of any payer category.
Nikki Harper, chair of Revenue Cycle – Analytics, Automation & Diversified Revenue At Mayo Clinic, is developing a prior authorization tracking system designed to function with the same transparency people expect from package delivery tracking. The goal is simple but important: give everyone involved visibility into where an authorization stands, what action is needed, and where delays are happening.
Lynn Ansley, Vice President of RCM at Moffitt Cancer Center in Tampa, said that technology infrastructure is her team’s top investment priority for 2026. She is leading the organization through a full Epic implementation to improve revenue cycle operations. Beyond the system rollout, her focus is on helping teams embrace continuous improvement, streamline workflows, and increase data visibility so leaders can make faster and more informed decisions.
For practices with a significant Medicare Advantage patient population, this is not a background trend. It is an active financial risk requiring specific attention to documentation, authorization workflows, and appeal readiness.
Top Healthcare Organizations Are Moving Prevention to the Front of the Revenue Cycle
The revenue cycle leaders at organizations like Northwell Health, Mayo Clinic, Sanford Health, Moffitt Cancer Center, and Ascension may operate at different scales, but they are all focusing on the same challenge: preventing revenue cycle issues before they become denials, delays, or write-offs.
Tony Morrison, Chief Revenue Cycle Officer at Sanford Health, described that automation is their top priority from a revenue cycle perspective in 2026. By reducing the reliance on manual processes, they put efforts to lower our cost to collect, improve accuracy and consistency and better support their revenue cycle teams.
They invest in automation and technology to streamline workflows across the revenue cycle, from access and coding to billing and collections, so they can focus more on complex work that requires judgment and expertise.
Patti Consolver, VP of Front-end Revenue Cycle at Ascension framed the broader shift clearly where the centre of healthcare finance is leading. She described the next critical evolution for revenue cycle leaders as the total transformation of the patient financial journey.
“Success will no longer be measured by how we process claims after the fact, but by how we effectively remove financial friction before a patient even walks through the door.” Consolver said.
That mindset is becoming increasingly common among organizations with strong A/R performance.
Rather than relying primarily on back-end revenue cycle teams to fix denied claims after submission, these providers are investing earlier in the process:
- Eligibility verification during scheduling
- Real-time authorization tracking
- Payer-specific claim edits before submission
- Automation to reduce avoidable manual errors
- Better visibility across scheduling, registration, and billing
These are not simply operational improvements. They are preventive revenue cycle strategies designed to reduce denials, minimize rework, accelerate reimbursement, and create a smoother experience for both staff and patients.
The organizations performing best financially are recognizing that the most effective denial management strategy is often preventing the denial from happening in the first place.
What This Means for Practices Lacking Strong Revenue Cycle Support
The leaders quoted above oversee revenue cycles for high-performing health systems with dedicated denial management teams, legal support for payer disputes, and technology budgets that many practices simply do not have.
Even with those advantages, they continue to face denial rates exceeding 30% from certain payers and rising A/R days.
For many mid-sized and large practices, the same payer dynamics arrive without a financial or operational cushion, and much smaller margin for error.
As noted in an HFMA roundtable, payers take notice when a health system does not rigorously defend its revenue streams, challenge underpayments, or appeal denials. The same dynamic applies to any group practice, regardless of size.
Denial rates above 8%, A/R beyond 45 days, and a growing backlog of aged claims are not simply metrics to monitor. They are signals that the current revenue cycle structure is no longer sufficient to withstand the payer environment as it exists in 2026. The response has to begin before a claim is submitted, not after the reimbursement denied.
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