Published HFMA Montana Chapter, Montana Minute, June 2025 | Author: Damian Franklin, Client Success Director, Aspirion The Growing Challenge on Your Revenue Cycle Desk Let’s be honest, if you’re managing a hospital’s revenue cycle today, denied claims aren’t just another item on your to-do list. They’re likely keeping you up at night. The numbers tell the story. According to the American Medical Association, 11% of all claims were denied by payers in 2023, a notable jump from 8% in 2021. For your average health system, that’s roughly 110,000 unpaid claims sitting on your books. Even more concerning for your operations: nearly 15% of claims submitted to private payers are rejected upon first submission, even when prior authorization was obtained. The financial reality? Healthcare providers collectively spent $19.7 billion contesting these denials in 2023. What’s Really Happening Behind the Scenes? “So, what changed?” you might ask. The primary catalyst appears to be payers’ implementation of AI-powered algorithms. While we’ve all been focusing on patient care, insurance companies have quietly deployed automated systems that are generating denials at an unprecedented rate. For your revenue team, this creates a perfect storm:
- Staff spending countless hours investigating and appealing denials
- Delayed reimbursements straining your cash flow
- Patients frustrated by coverage issues and potential delays in care
As one CFO confided, “Our denial teams are drowning. We’re hiring additional staff just to keep pace, but it’s like bringing knives to a gunfight when payers are using advanced AI.” Turning the Tables: Your AI Advantage Here’s the strategic question you should be asking: If payers are using AI to deny claims faster, why aren’t you using AI to prevent and fight those denials? AI offers your revenue cycle team powerful capabilities:
- Automation beyond basic tasks: AI can handle time-consuming, repetitive tasks associated with denials management—from data entry to claim status checks—with greater speed and accuracy than your staff. This isn’t just about efficiency; it’s about freeing your talented team for higher-value activities.
- Predictive denial prevention: AI’s most powerful capability is analyzing vast data sets to identify patterns and make predictions. Imagine knowing which claims will likely be denied before submission. Your team could address issues proactively, dramatically reducing denial rates.
- Strategic appeals management: When denials do occur, AI can assist in generating accurate, compelling appeals. Instead of using generic templates, your system can craft tailored appeals based on analyzing successful appeals and understanding payer-specific requirements.
- Continuous improvement: Unlike static systems, AI solutions learn and improve over time. As Aspirion’s Chief AI Officer, Spencer Allee, put it, “Our AI system gets smarter every day. The denial patterns it recognizes today would have taken us years to identify manually.”
Your Four-Pillar Implementation Strategy “This sounds promising,” you might think, “but how do we actually implement it without creating another failed IT project?” The answer lies in what I call the four essential pillars of AI implementation for revenue cycle executives:
- Define your specific battlefield: Start by clearly defining your specific problems. Are you primarily battling initial denials? Struggling with appeal success rates? Looking to identify denial trends to improve upstream processes? A targeted approach ensures your AI implementation addresses your most pressing pain points.
- Arm yourself with quality data: Your AI system is only as good as the data it’s trained on. This means investing in comprehensive, accurate, up-to-date data—
not just claims information, but payer policies, clinical documentation, and historical denial patterns. As one successful implementation leader told me, “We spent six months just cleaning our data before launching our AI system. It was worth every minute.”
- Choose the right technology platform: The right technological infrastructure is essential. Your platform should be scalable, secure, and capable of integrating with your existing healthcare IT systems. Think of it as a powerful engine—but remember, the platform alone isn’t enough.
- Invest in your talent team: Successful AI implementation requires a unique blend of skills, including data science, healthcare domain knowledge, and change-management capabilities. Don’t underestimate the human element.
The Strategic Advantage: Insights from Industry Pioneers Wondering how leading healthcare institutions are addressing the multibillion-dollar denials management challenge? At the upcoming HFMA Annual Conference an exclusive panel featuring revenue cycle innovators from Banner Health, Houston Methodist, and Legacy Health will share candid insights about their AI implementation journeys in denials management—revealing both challenges and victories along the way. Discover practical strategies you can apply to your own organization’s revenue cycle operations. You can learn more about the panel session here. What step will you take first to transform your denials management strategy? Read the full HFMA Montana Minute Newsletter here.