RCM in transition: key trends to watch in 2025

Ryan Chapin, Executive Director of Strategic Solutions and Vijaya Krishna Veeravalli, Senior Vice President of Cloud Engineering, AGS Health.

As we enter 2025, several key trends are expected to significantly shape the longer term of healthcare revenue cycle management (RCM). From managing rising denial rates and changing workforce dynamics to mitigating growing cybersecurity threats and integrating cutting-edge technologies, healthcare organizations enter the brand new yr navigating a fancy – and sometimes controversial – environment to improve patient care and operational efficiency .

Navigating in an unfavorable RCM environment

Denials, evolving payer relationships, and increased administrative burdens have combined to create what can best be described as an unfavorable RCM environment for healthcare organizations.

Increasing denial rates, prior authorization requirements, and the prices related to managing each are amongst a very powerful challenges facing healthcare organizations in 2025. According to American Medical Association (AMA) study.doctors reported spending almost two business days per week on a mean of 43 prior authorizations, lots of which result in denials.

In terms of denials, the sharp increase is essentially due to a rise in third-party audits for industrial and government purposes, including a rise in prepayment audits. According to MDauditin 2023-2024, the variety of external audits greater than doubled and the entire amount in danger increased fivefold. As a result, there was a pointy increase in the quantity of ultimate denial in specialist settings (34%), inpatient outpatients (84%), and inpatients (148%).

Healthcare providers participating in the increasingly popular Medicare Advantage (MA) plans have been hit particularly hard. MDaudit reports that in 2024, MA-related denials increased on average in specialty settings and hospitals, and total denials for MA plans increased by 51% – a trend that’s causing an increasing variety of providers to reconsider or abandon from participation based on high refusal rates and poor payments.

The impact of those trends goes deeper than financial. They increase already high administrative demands, which in turn increases the burden on an overstretched – and increasingly costly – workforce as RCM leaders struggle to deal with difficult recruitment and retention conditions. To avoid staff burnout, healthcare leaders proceed to adapt strategically, including exploring onshore, nearshore and offshore outsourcing models.

The use of artificial intelligence and automation

Artificial intelligence and automation proceed to be a transformative force in healthcare, particularly when it comes to RCM and administrative functions, where they will reduce the workload of clinical and administrative staff and reduce the danger of denials.

This includes the broader use of artificial intelligence and automation tools to support clinical staff with core administrative tasks comparable to clinical record integrity, utilization management, prior authorizations and appeals of clinical denials. Another tactic is to more widely implement and improve ambient technology at the purpose of care. This helps streamline operations, reduce costs and improve each the patient experience and revenue performance in 2025 and beyond.

Greater use of predictive analytics will help healthcare organizations stay ahead of growing payer denial trends by working to prevent denials before they occur and prioritizing denials that provide the best return on investment. Advances in artificial intelligence may even result in greater use of tools comparable to AI dialers, which may manage calls to payers and collect complex information from payer representatives, streamlining tasks comparable to reversing denials and checking authorizations.

Finally, when it comes to automation, healthcare organizations will deploy AI agents to perform labor-intensive tasks related to clinical and non-clinical appeals, comparable to compiling appeals packages that humans review before submission.

An additional profit resulting from the event of artificial intelligence and automation might be greater patient satisfaction. At a time when patient expectations are rapidly evolving, integrating technologies comparable to artificial intelligence and machine learning will improve the patient experience. Expect greater investment in technology and self-pay automation to educate patients about their financial responsibilities and supply easy, accessible payment options and plans. This is an approach that not only increases patient satisfaction, but in addition improves revenue collection.

You may also expect greater centralization of patient access functions, allowing front desk staff to deal with patient interactions slightly than pre-authorizations and insurance verification.

Preventing cybersecurity threats

Just as artificial intelligence and automation tools grow to be more powerful, so do the cybersecurity threats facing healthcare organizations. In 2025, the healthcare cybersecurity landscape might be shaped by evolving ransomware tactics, increased regulatory pressures, and the mixing of advanced AI-based security.

To combat these growing threats, which have the potential to disrupt operations and threaten care, healthcare providers will need to adopt proactive measures to prevent service delays and protect patient safety. The financial impact is probably going to intensify as healthcare organizations face direct ransom demands and rising costs related to regulatory compliance, improving cybersecurity, and rebuilding their fame.

Artificial Intelligence will play a greater role in cybersecurity with recent AI-based tools providing enhanced detection and automatic response capabilities. But as artificial intelligence itself becomes a goal for cybercriminals, healthcare IT leaders must implement rigorous governance to manage these tools responsibly. To remain resilient, organizations should prioritize advanced strategies comparable to network segmentation, vulnerability disclosure policies, and regular third-party assessments.

Additionally, proactive approaches comparable to reducing reliance on legacy systems, using multi-factor authentication, and maintaining a strict security patch schedule might be critical to maintaining robust protection against established and emerging threats.

While organizations are implementing evolving tools and technologies to combat cyberattacks, it’s equally necessary that each team member shares the responsibility for vigilance. They can prevent cyberattacks by following security practices, staying informed, reporting suspicious activity, practicing protected web habits, updating devices, participating in drills, and dealing together to strengthen security.

Transforming the healthcare landscape

The transformative trends – positive and negative – shaping the longer term of healthcare require industry leaders to adapt and innovate in 2025 and beyond. From workforce and revenue challenges to cybersecurity, healthcare finance and technology leaders have to be open not only to the potential of advanced AI and automation, but in addition to the increased cyber threats resulting from the increased use of those tools.

Adopting revolutionary workforce models and technologies to mitigate risk, reduce administrative and staffing burdens, and reduce associated costs while streamlining RCM processes will help ensure proactive healthcare organizations can effectively address and emerge from these trends not only unscathed, but successfully .