Hospital revenue cycle trends to watch in 2025-2026: Key takeaways from our Provider RCM Summit

Last week, Union Healthcare Insight had the privilege of gathering with an impressive group of hospital revenue cycle executives in Nashville, TN to go deep for a day of discussion including Union's State of Healthcare and our newest presentation: The State of Revenue Cycle, covering current and emerging trends.  Over 6 hours we traversed a multitude of interconnected themes, ranging from the OBBBA and its provider impacts, to key drivers of employer cost and potential responses we’re watching for, to recent payer behavior driven by MLR trends and the emerging A.I-driven revenue cycle “arms race.” Perhaps most importantly, the day offered a valuable opportunity to listen to what’s keeping provider-side revenue cycle and finance leaders up at night as they continue their impressive commitment to their organizations. Here are 6 hospital revenue cycle trends from the discussion worthy of calling out.

Six hospital revenue cycle trends that are keeping finance leaders up at night in 2025

1. Providers anticipate more clinical scrutiny by payers.

There are broad expectations among revenue cycle leaders that the recent payer earnings calls showing serious MLR pressure will result in payers needing to do something fast to improve profitability. Perhaps surprisingly, it’s not only the for-profit payers that are exhibiting more aggressive practices around reimbursement—numerous examples emerged of not-for-profit payers mirroring the behavior of their publicly traded brethren. Concurrently, the recent multi-payer pledge to “fix” prior authorization, alongside new federal efforts in this area (specifically the WISeR pilot) makes it unlikely that payers will look to prior authorizations as a major source of cost containment, as it risks alienating the public. As a result, there are broad expectations that payers will push harder on the clinical side of the enterprise as they look to squeeze the profit balloon slightly differently. Thus, clinical justification of CC/MCC (complication or comorbidity vs. major complication or comorbidity) status, short stays, readmissions, evaluation and management (E/M) coding levels and more are already being—or expected to be—hotly contested throughout 2025, transferring a significant load to the clinical side of the enterprise.

2. Few revenue cycle leaders hold hope for meaningful payer partnerships near-term without some dramatic shifts in dynamics.

Providers recognize that serious misalignment in financial incentives between payers and providers means that past talk of “frictionless” partnerships isn’t something for which they’re holding their collective breath. Gold carding, presumptive authorization for access to medical records, and other forms of partnership have been bandied about in the market for a good while now but, as one attendee pointed out, these are “nice ideas on a whiteboard” but don’t play out in practice.  Providers recognize that opportunities to improve relations with payers will need to happen on a case-by-case basis that is driven by strong prior authorization and denials mitigation performance but realistically may also require some unique factors (such as strong-to-dominant provider market presence) and will likely need bilateral support from senior leadership. Further, providers appear ready to recognize that investing in technological capabilities (read: AI) that draw them closer to the hefty level of resources that payers have accrued while providers were contending with the pandemic is probably the only way to realize some type of strategic play in support of denials strategy. Those options could involve an array of solutions: from predictive capabilities (denials especially); to more routine error minimization (claims scrubbing, payer policy reconciliation with claims and automated submission); to reimbursement accuracy (coding, CDI support); and appeals (auto-generated denials appeals letters) and more as technology evolves. And yet, in the aftermath of recent earnings calls, the industry is already seeing early signs of payer mudslinging, with at least three insurers asserting that provider-side use of generative AI is responsible for upcoding leading to MLR declines, hardly the sentiment of organizations on the cusp of partnership.  

3. Payer contracting remains an underleveraged opportunity that providers must remain vigilant on and yet many continue to overlook.

Our group spent a good amount of time talking though contracting challenges, given so many providers reportedly struggle with introducing terms that can positively influence the level of clarity between two parties and how they move to resolution. One sentiment shone through: effective contracting is hard. Providers face two major challenges executing in this space:

Internal connectedness. It sounds fluffy, but all it means is that a relationship between revenue cycle and managed care contracting needs to reach a peanut-butter-and-jelly level of symbiosis.

Analytic insight. Given the speed of payer policy changes, even organizations that have a close working relationship need the ability to detect near-real time patterns in how payer behavior shifts. Our discussion revealed that payer policy shifts often fly under the radar for months before they’re picked up and by then major revenue can be leaked because it’s not humanly possible for providers to keep track of everything going on. And payers may shift policies faster than providers can keep up with them. Contracting can help to determine critical details of how payers need to keep providers in the loop (e.g., not deploying a particular new policy before the announced start date, giving providers specific details, such as codes, to comprehensively understand procedures a new policy may apply to, getting to peer-to-peer reviews faster at a specified time/day). Resolution clarity can help providers, already stretched beyond their capacity, to make the “fish or cut bait” calls far simpler as they manage against an overwhelming glut of initial denials.

4. Are providers less worried about revenue cycle cost than we anticipated? Perhaps not entirely, but there's some nuance to it.

It would be fair to say that our meeting attendees were not the “average bears”, including many progressive operators with far lower cost rates to collect profiles than their peers. In particular, those using outsourcing more heavily often profile with lower cost due to labor arbitrage. But the sentiment was clear: Providers are seeking higher levels of performance without adding steeply to cost, which is a vastly different attitude from a decade ago. As our discussion about cost progressed, an unanticipated twist emerged: Providers don’t feel confident with existing industry benchmarks around cost. The sentiment was they’re not sufficiently transparent, and thus an “apples to apples” comparison becomes difficult.  (Also, not gonna lie—as someone who ran a widely-participated in revenue cycle benchmarking survey for the best part of a decade, I felt my heart skip a beat during this part of the discussion.)  Even more revealing: several providers shared during recent research calls that they are not 100% sure exactly what is counted under cost to collect at their own system. It is remarkable how many providers don’t fully trust their data today in a way that was unthinkable a decade ago. However, given we know from prior data analysis that revenue cycle cost and productivity are not well correlated, from a margin impact context, it’d be fair to say that it's easier to drive higher performance than to meaningfully reduce cost. Given that, efficiency and productivity should be the name of the game, and any investments within revenue cycle should ideally be designed to support these ambitions. 

5. You gotta fight, for your right.

Revenue cycle operators heard the following loud and clear: Payers can interpret unwillingness to fight denials and post-payment audits as a signal that you’re “low hanging fruit” for non-payment/under-payment. While this may sound like a cynical perspective, the more we speak with providers, vendors and payers, the more the evidence (and data) stacks up. If you’re a provider, the mandate is clear—push back on payers when you have solid evidence of not being paid commensurate with the level of service provided. And providers need to recognize it’s not just the payers, the third-party vendors employed by payers in both pre-and post-payment integrity are financially incentivized to find dollars, which drives a lot of the provider-side anguish. By the way, the dynamics between payers and vendors is a fascinating space that I may explore in more detail in a future blog post.

6. Is the hospital business—and revenue cycle—about to get turned inside out?

Battlegrounds are shifting from the traditional inpatient arena (especially CC/MCC downgrades and inpatient short stay cases) to lower-paying, higher-volume outpatient settings.  And it turns out that many providers might not be realizing this trend is like sand shifting under their feet at the beach. Payers have figured out that the outpatient setting represents the confluence of too-small-to-draw-attention adjustments and are trading value for volume. One notable example cited during the meeting included a not-to-be-named payer in a not-to-be-named (southern) state where Level 5 and 4 E/M visits are being automatically downgraded to a 3, but then subsequent rules kicking in to auto-pay them as a level 2.  There were also some good stories shared about health systems running their own internal reviews on oft-overlooked outpatient underpayments only to realize that the financial leak was approaching similar levels as their inpatient services.  However the heat may be about to get turned up. Providers are nervously chewing fingernails as October draws near to see if the inpatient only list (a.k.a the “IPO list”) will be removed in the upcoming HOPPS Final rule. If finalized as proposed, the doors would be kicked open for a significant procedural shift to outpatient settings, rapidly establishing a new battleground for revenue cycle and elevating the importance of CDI in the outpatient setting to mission critical.

Was this all that was discussed? Not by far! If you'd like to find out more about our content, reach out to elizabeth@unionhealthcareinsight.com for details. Also don't forget to join us in October for our upcoming (members-only) Bootcamp: How to Speak Revenue Cycle.