Denials to Dollars

The AI Advantage in Revenue Cycle Management

Aria Vikram

Oct 29, 2024

For the last few months, I have been leading a research study at CUIMC on implementing AI chatbots to help surgical practices save time, boost revenues and improve patient satisfaction. 

This has led me to come in direct contact with top RCM professionals across major NYC hospitals and I’ve seen firsthand the challenges that some of the biggest challenges to providers come in the form of RCM processes like pre-authorizations, claim filing, coding, medical billing and denial management. In the high-stakes, fast-paced world of healthcare revenue cycle management, a silent battle rages between providers and payers, with each side vying for control over costs, approvals, and denials. Insurance companies, with their automated denial algorithms, are armed to the teeth. They wield AI like a fortress, using it to reject claims with a precision that providers have struggled to match. 

The High Cost of Lagging in the AI Arms Race

1. Skyrocketing Denials
   Denials are rising at a jaw-dropping rate—since 2018, denial rates have quadrupled. In one conversation with an RCM director from a major NYC non-profit hospital, I learned that they face a staggering 10% denial rate in their orthopedics department, with 70% of these denials overturned on appeal. These are claims that never should have been denied in the first place. And here’s the kicker: most of these denials are preventable, caused by minor manual errors, policy mismatches, or incomplete documentation. Insurance companies are fully aware of this; they’ve turned denials into a revenue stream, harnessing AI to “deny, delay, and defend” their bottom line. It’s a fortress providers can break into—but only if they wield AI themselves.

2. Insurers Keep Moving the Goalposts
   One top coordinator in bariatric surgery told me her team faced a temporary increase in denials just because of missing pregnancy counseling documentation—a newly-introduced policy detail.  A thousand-page manual of insurance policies is their guidebook, but with constant policy updates, it’s nearly impossible to keep up manually. Insurers’ policies are constantly shifting, creating a maze that’s impossible to navigate manually. At the same time, they’ve programmed their AI to pick up on every missed detail; it’s like a minefield, where one tiny oversight can blow up into a costly denial. But imagine having AI on your side—a tireless analyst that reviews every policy, scans for coverage limits, and flags potential issues before they even touch a claim. With AI, providers can finally stop playing catch-up.

3. Manual Documentation Drains Resources
   Providers face relentless documentation demands. A simple task, like entering a prescription in systems like Epic, can involve 18 keystrokes, and doctors now spend twice as much time on data entry as on patient care. This documentation drain doesn’t end with physicians; it trickles down to RCM teams, who struggle to compile and process the vast volumes of information required for claims filing. With AI, providers can automate these labor-intensive processes, freeing up resources for direct patient care.

AI as the Great Equalizer: Leveling the Playing Field

With the advent of advanced large language models like ChatGPT, we’re witnessing unprecedented advancements. LLMs have demonstrated remarkable expertise in processing and synthesizing vast amounts of text-based data with accuracy and speed. This unique moment has provided RCM professionals a chance to capitalize on AI tools that can digest the dense, complex language found in insurance policies and payer updates, making real-time policy analysis a reality.

Now, with AI models that can interpret lengthy, nuanced policy manuals and update requirements seamlessly, providers no longer face a significant disadvantage. These LLMs can understand payer guidelines, scan for exclusions, and identify crucial documentation gaps instantly. This is a game-changer for hospitals looking to automate pre-authorization and claims management, where one missed step can otherwise result in costly denials.

Here’s how AI puts providers back in control:

1. Effortless Pre-Authorization
An AI system that integrates seamlessly with EHRs like Epic can sift through patient records, payer policies, and procedural requirements in real-time. Imagine it: AI reviewing thousands of lines of policy, highlighting missing documents, and flagging potential coverage gaps—all in seconds. In bariatrics alone, one pre-authorization coordinator shared that simply being alerted to missing documentation would instantly reduce their denials by 30-40%. With AI, RCM staff no longer need to rely on thousand-page manuals or outdated processes. It’s like having a team of specialists available at a moment’s notice, ready to catch issues before they become costly denials.

2. Real-Time Denials Management
AI gives providers the same speed and accuracy that insurers use to deny claims. A top RCM director told me they face a critical 72-hour window to appeal denials. With AI-driven insights that instantly analyze denial reasons, RCM teams can quickly build airtight appeals, cutting denial rates by 50% in some cases. 

3. Claims Filing Without the Costly Errors
In one orthopedics department, I learned that even minor coding errors are responsible for a high percentage of their claim rejections. These manual errors aren’t just a headache—they’re expensive. Reworking a claim costs an estimated $25 in labor, which quickly adds up when claims require repeated intervention due to errors or denials. With AI, providers can eliminate manual entry errors, ensure coding accuracy, and automate eligibility verification, dramatically reducing the resources spent on repetitive claim touches.

An AI-Powered RCM System: The New Standard for Providers

Picture this: a powerful AI engine integrated into every stage of the RCM workflow, with the precision to catch every error and the speed to match insurers’ denial algorithms. This is no longer a pipe dream; it’s the future that top providers are racing to build.

• Seamless EHR Integration: Automatically pulls the necessary patient records, procedure codes, and payer requirements, reducing time spent on tedious documentation.

• Real-Time Eligibility Checks: Instantly confirms coverage for specific procedures, flagging limitations in advance so RCM teams can pivot quickly.

• Error Detection and Coding Accuracy: Scans for missing codes, unbundled services, and other common errors, ensuring claims don’t get held up over small mistakes.

• Automated Appeal Guidance: Offers step-by-step insights for crafting appeal letters within the crucial 72-hour window, leveling the playing field with AI-equipped insurers.

Providers who invest in AI aren’t just keeping up—they’re leading the pack. AI isn’t a luxury; it’s a necessity in today’s healthcare landscape, where the arms race between payers and providers grows fiercer each day. By embracing AI, providers can turn the tables and gain the speed, accuracy, and insights needed to overcome denial rates, streamline processes, and bring the focus back to patient care where it belongs.