8 health system revenue cycle challenges in search of a solution

Revenue cycle leaders from some of the nation’s largest health systems have issues. Issues with payors, to be exact. 

That came through loud and clear at Kodiak’s Spring Revenue Circle event, held Feb. 1-3 at the Rancho Bernardo Inn in San Diego. The invitation-only event brought together revenue cycle leaders from 14 health systems to candidly discuss and share solutions for their most-pressing revenue cycle challenges. Their health systems use the Kodiak Platform to monitor their revenue cycle performance. 

During a first-day roundtable discussion on the revenue cycle headwinds facing their health systems, we asked the attendees to rank their top revenue cycle challenges. In ranked order, they said: 

1. Payor issues 
2. Medicaid eligibility 
3. Growing patient responsibility 
4. Denial avoidance 
5. Payor DRG downgrades 
6. Prioritization/burnout 
7. Recoupment/PLB (provider-level balance) ambiguity 
8. Scale without staff 

We then asked the revenue cycle leaders to go deeper on each of the challenges they identified. Regarding payor issues, the three specific areas of concern that they consistently mentioned were: 

1. The continued increase in payor denials of claims 
2. The continued growth of patient financial responsibility in health plan designs 
3. Longer claim adjudication cycles/meaningful claim resolutions with payors  

When you add those three specific areas of concern together, you end up with health systems spending more money to get paid less for the services they billed for. That’s not a sustainable financial model no matter what industry your business is in. 

Our most recent revenue cycle KPI monthly executive update bears this out. For the 2,300 hospitals and 350,000 physicians that use the Kodiak Platform, the initial denial rate in December was over 10%. Their final denial write-offs, expressed as a percentage of net patient service revenue, were up 37% compared with a year ago, and their total uncompensated care, expressed as a percentage of gross patient service revenue, was up nearly 26% compared with a year ago. 

The Revenue Circle attendees and our Kodiak Platform numbers are telling the same story. It should come as no surprise that payor issues were the top-ranked revenue cycle challenge. 

Neither should Medicaid eligibility coming in as the second highest-ranked revenue cycle challenge. As we all know, the One Big Beautiful Bill Act, signed into law last July, made significant changes in Medicaid eligibility requirements. Three months prior, we suggested that hospitals, health systems, and medical practices bone up on their Medicaid revenue cycle KPIs in this article, “Know your Medicaid revenue cycle KPIs.” We followed that up with some advice four months after the OBBBA became law with this article, “Checklist: Proactive OBBBA planning.” 

We were a bit surprised at two other revenue cycle challenges that made the list: prioritization/burnout and scale without staff. We’re keenly aware that health systems are asking their revenue cycle teams to do more with less, but we didn’t know quite to what extent. With payor issues, Medicaid eligibility, and growing patient financial responsibility grabbing the top three slots, health system revenue cycle teams have a lot on their plates. So much so they don’t know what to eat first as it’s falling off into their laps. 

The solutions revenue cycle leaders are looking for 

Day two of the Spring Revenue Circle event included a follow-up discussion on what revenue cycle teams need to help them prioritize workstreams, reduce team burnout, and scale their operations with no additional staff positions. In ranked order, here are the solutions health system revenue cycle leaders are looking for: 

1. Artificial intelligence-driven root cause analysis 
2. Revenue integrity/charge-driven benchmarks 
3. Goal establishment and tracking 
4. Physician benchmarking 
5. Triggered alerts 
6. Granular benchmarking 
7. Proactive MTD (month-to-date) views 

Essentially, the Revenue Circle attendees want credible, data-driven benchmarks to track their revenue cycle performance and compare it with their peers. They want automated systems to immediately notify them when their KPIs go off course. And they want smart technology to identify the root causes of those deviations in performance, so they can correct them immediately. 

Is all that possible? Is all that doable? It is. With the Kodiak Platform and Kodiak’s tech-enabled services. 

By partnering with Kodiak, health system revenue cycle leaders and their teams can convert all those challenges into opportunities to improve revenue cycle performance and their net revenue results. 

We’ll be telling you more about it in future articles. Until then, please read more about the 2026 Spring Revenue Circle.