Denials get the attention, the dashboards and the dedicated staff. But revenue cycle leaders say some of the largest, most persistent leakage never shows up as a denial at all.
It hides in short payments that look like clean claims, in documentation gaps clinicians never see, in payer policy changes that arrive quietly and in the friction patients feel before a claim is ever generated.
Becker’s asked revenue cycle executives, directors and managers one question: Where’s the biggest source of revenue leakage most hospitals underestimate? Their answers point to a common theme: the leakage hospitals miss is rarely a single error. It’s the accumulation of small, unmonitored gaps across departments that were never designed to work as one system.
Editor’s note: Responses have been lightly edited for clarity and length.
Wendy Buice. Senior Vice President, Revenue Cycle Partnership Success Ensemble Health Partners: The biggest leakage is the one hospitals can’t easily see, clinical overrides by payers. Industry data shows us that denials drove an estimated $48.4 billion in lost hospital revenue in 2025, and the clinical piece of that including DRG downgrades, medical necessity denials and level-of-care challenges grew faster than almost any other category. These are the hardest to track and hardest to overturn. It takes clinical expertise, predictive analytics, and the willingness to escalate all the way to CMS to get accurately reimbursed. Most hospitals don’t have that infrastructure, so the leakage goes undetected or unrecovered. The hospitals closing this gap aren’t necessarily building bigger internal teams, they’re partnering for that specialized muscle to access the best in AI and innovation so they can keep pace with payers who are already using that same technology against them.
Angela Confoey. Senior Vice President, Revenue Cycle and CRO, UMass Memorial Health (Worcester, Mass.): For hospice, it’s not just outright payer denials. Substantial leakage occurs in the days you cannot bill at all due to late notices, missing signatures, date discrepancies, etc. These are controllable losses, which is why timely monitoring and prevention has been a priority for Chapters Health System. Our integrated approach includes education efforts and quality initiatives which have also made an impact in this area.
There are two key initiatives that have had a significant positive impact on our revenue cycle this past year.
Use of artificial intelligence to identify missed clinical documentation. We have an excellent Clinical Documentation Improvement team that does outstanding work in our highest-priority focus areas, but it would not be financially feasible to hire enough nurses to review every potential opportunity. AI has allowed us to extend that reach by analyzing a broader universe of cases and identify additional documentation opportunities that support accurate capture of patient acuity and appropriate reimbursement.
Shifting Utilization Review into Revenue Cycle. This step has allowed us to standardize work across the health system, create more consistent processes, and better align clinical review, documentation, authorization, and reimbursement workflows.
One of the biggest underestimated sources of revenue leakage is the growing impact of payer policy changes and payment reduction tactics that do not always appear as traditional denials.
Readmissions is one example. Many health systems focus heavily on Medicare readmission risk, but commercial payers are increasingly updating policies and limiting exceptions for when readmissions will be covered. In some cases, commercial payer readmission policies may create greater reimbursement exposure than Medicare.
Another growing area is diagnosis-related group and emergency department evaluation and management downgrades. More payers are using proprietary software designed to reduce payment, but the underlying logic is often not shared with hospitals and may conflict with industry-standard guidelines such as InterQual or American College of Emergency Physicians guidelines. That lack of transparency makes appeals difficult, and these reductions often need to be identified through payment variance tools because they may not appear as denials.
Contract underpayments are also a significant and persistent source of leakage. Hospitals need to invest in robust contract modeling and underpayment detection tools, whether within the electronic medical record or through third-party vendors, to ensure payers are reimbursing according to negotiated agreements. Even when these tools are effective at identifying underpayments, it can take years for payers to correct their systems or reach settlements to resolve discrepancies, which makes strong monitoring and escalation processes essential.
Elizabeth Ward. Vice President of Revenue Cycle Management, Aletheia Health Partners (Watkinsville, Ga.): The biggest source of revenue leakage is the cumulative impact of small operational breakdowns across the revenue cycle. While organizations often focus on denials, the true opportunity lies upstream in registration accuracy, authorization management, charge capture, timely documentation, coding quality, and work queue discipline. Individually, these issues may seem minor, but collectively they create potentially millions of dollars in avoidable leakage. Hospitals that consistently monitor operational KPIs and address root causes, rather than just symptoms, achieve the most meaningful and sustainable financial improvement.
Nydia Valle. Financial Analyst, Oschner Health (New Orleans): The initiatives that have had the greatest impact in my experience haven’t been focused on a single denial or payer issue, but on building stronger partnerships between clinical operations and revenue cycle. By embedding a revenue cycle partner within clinical operations, we’re able to proactively review payer policies, evaluate workflows, and standardize processes to prevent revenue leakage before it occurs. Denials are often a symptom rather than a root cause. Collaborating early and building strong cross-functional relationships allows us to expand reimbursement opportunities, reduce avoidable denials, and improve financial performance across multiple service lines. Revenue cycle is at its best when it’s preventing problems, not just collecting on them.
Lindsay Bennett. Vice President, Revenue Cycle and HIM, Chapters Health System (Tampa, Fla.): Revenue Cycle functions as a sequential, interdependent workflow. When claims pile up behind a constraint — for example, when there are documentation delays — everything downstream is impacted. Staffing models are not designed for pile-ups and periodic releases. At Chapters Health System, the projects that have increased real-time visibility and quantified the dollars in bottlenecks have helped us focus our process improvement efforts where they have the biggest impact. Developing real time throughput metrics has helped us identify and contain issues quickly — not months later when they are impacting the aging. That has helped us consistently keep our days in A/R low.
Sal Brown. System Vice President of Mount Sinai Health System (New York City). The biggest source of revenue leakage isn’t a single denial or billing error, it’s operational variation. In decentralized organizations, different teams often develop different ways of performing the same process. That inconsistency leads to variability in claim quality, follow-up strategies, denial prevention and payer escalation, creating hidden revenue leakage that’s difficult to measure.
Centralization is a critical first step, but by itself it doesn’t eliminate revenue leakage. The real value comes from what centralization enables. In a large, complex health system like Mount Sinai, an enterprise operating model gives us a single view of performance across hospitals, physician practices and ambulatory sites, allowing us to identify systemic issues instead of treating isolated symptoms. We can detect payer trends earlier, standardize interventions, deploy resources where they’ll have the greatest financial impact, and ensure every patient and every claim benefits from the same best practices.
Paul LePage. Vice President of Revenue Cycle at UC Davis Health (Sacramento). The most underestimated source of revenue leakage is incomplete/delayed clinical documentation and charge capture. Most organizations focus heavily on denied claims because they’re highly visible. However, the revenue that’s never billed — or billed incorrectly — often exceeds what is ultimately denied.
Examples include missing professional and facility charges, delayed charge entry that pushes claims beyond timely filing requirements, and documentation that doesn’t support the level of service provided.
Another area that receives too little attention is payer contract compliance. Hospitals often assume payers adjudicate claims correctly, but underpayments can quietly accumulate over thousands of claims if organizations aren’t systematically auditing payments against contract terms. The organizations that consistently outperform their peers treat revenue leakage as an enterprise issue rather than a billing issue. They continuously monitor the entire revenue lifecycle — from scheduling and authorization through documentation, coding, billing, payment accuracy and collections — to identify leakage before it affects cash flow. This shift from reactive correction to proactive prevention creates the greatest long-term financial impact.
Heather Dunn. Senior Vice President and Chief Revenue Officer of Novant Health (Winston-Salem, N.C.): The biggest source of revenue leakage isn’t a single denial or coding issue — it’s fragmentation.
Hospitals often optimize individual departments while missing the handoffs between them. Revenue leaks when scheduling, authorization, registration, clinical documentation, coding, billing and payer management operate independently. Small defects introduced early in the patient journey can compound downstream into possible denials, delayed reimbursement, write-offs and unnecessary administrative costs.
Organizations that treat revenue cycle as an enterprise capability rather than a collection of departments consistently outperform their peers. The greatest opportunity isn’t finding another percentage point in collections — it’s eliminating variation, using technology as an advantage and AI to identify issues before claims are submitted and creating accountability across the entire revenue cycle instead of within individual functions.
Erin Hodson, MSN. Vice President of Revenue Cycle at Inova (Fairfax, Va.). Most organizations focus heavily on denials, and they should — they’re an important leading indicator. But what we’ve learned is that denials are only part of the story. Once we started analyzing payer behavior differently, we realized every payer has its own playbook. That visibility was a game changer. We found that some of our biggest revenue leakage wasn’t coming from denials at all — it was coming from subtle underpayments and large-scale payment retractions that often go unnoticed because they’re much harder to identify and quantify.
I think many health systems underestimate these areas because they’re less visible than denials and require a much deeper level of analytics. Once you can see the patterns, however, the opportunity is significant. We’ve shifted from simply managing denials to understanding and addressing the full spectrum of payer payment behavior, and that’s had a meaningful impact on our financial performance.
Joanna Caballero. Corporate Vice President of Revenue Cycle at Scripps Health (San Diego). The biggest leakage is the money hospitals think they collected correctly — but didn’t. Underpayments can be a larger source of revenue leakage when compared to denials. Denials show up in a work queue, they get reported, and everyone knows there is a problem. Underpayments, on the other hand, can be much quieter. The payer sends a payment, the account may look resolved, cash gets posted and unless the organization has strong expected reimbursement logic, the shortfall can be missed entirely. Underpayments do not always look like leakage. They look like payment.
Another area that can create/contribute to revenue leakage is outdated automation. Payer behavior changes. Contracts change. Authorization rules change. Medical necessity requirements change. But the automation does not always keep up.
So the organization can end up with a process that looks efficient on paper but is actually accelerating leakage — auto-closing accounts, suppressing exceptions, routing work incorrectly, or adjusting balances that should have been challenged.
Ruchi Tomar. Director of Revenue Cycle at Northwell Health (New Hyde Park, N.Y.). I believe the biggest source of a revenue leakage that many healthcare organizations often underestimate stems from challenges if they have their own ancillary services billing. Because of managed care payer guidelines associated with this service and a consistent understanding and adaptation to the specific charges guidelines.
The revenue cycle management process for ancillary services is particularly complex because, despite their individual lower dollar value, they involve a high volume of transactions and data transmission. This necessitates continuous maintenance due to frequent payer denials and policy imposed on it. Unlike a physician’s office with pre-clearance during registration, there’s an inherent difficulty in accurately capturing all necessary information upfront for ancillary services. These services often interface from professional billing practices, each with unique charge codes, and are frequently performed without the same in-depth verification knowledge at the point of care that is typically applied to professional charges. Consequently, clear specifications for a billing are often not readily available or easily verifiable at the point of service.
When RCM teams process claims for an ancillary service, they frequently require additional scrubbing and follow-up because critical information particular to that specific order isn’t readily available. This necessitates frequent outreach to physician and clinical teams for additional justification, leading to significant delays and increased manual effort and associated cost.
Ultimately, physician and clinical teams need to possess a broader understanding of the ancillary services revenue and its requirements during placing any patient care orders — especially for areas like laboratory services.
Shawn McCardell. AVP of Revenue Cycle at Mercy Health Services (Cincinnati). I would say the biggest source of revenue leakage that hospitals underestimate are their low-dollar denials. Not only do they add up to significant dollars when they are combined with high volume services, think labs, but we have seen a shift in payers to deny services for no real reason, to see if the providers are paying attention to the denials. If we are not diligent in reviewing and challenging these denials, even if the cost to do so is more than the charges themselves, we run the risk of the payers continuing to play the game of finding our response weaknesses and taking advantage of them.
Stephanie Wells. System Vice President of Revenue Cycle at Ochsner Health (New Orleans). In my opinion, the most underestimated source of revenue leakage is the impact of payer policy changes. While hospitals often focus on denials, staffing or operational inefficiencies, the cumulative effect of evolving payer policies can quietly erode both reimbursement and productivity.
Payers routinely implement new requirements that increase administrative burden, such as additional authorization rules, expanded documentation requirements, patient signatures for appeals or restrictions on authorizations for related services. Each change may seem manageable on its own, but collectively they create significant operational costs and divert valuable staff time away from higher-value activities.
The reimbursement impact can be even more substantial. Revenue leakage occurs when payers adopt clinical criteria or coverage policies that differ from those used by the hospital — for example, differing definitions for emergency department services, sepsis or medical necessity. In addition, payers may introduce payment reduction strategies, such as therapy multiple-procedure discounts or site-of-service restrictions, without meaningful collaboration with providers. These changes often go unnoticed until reimbursement has already been affected.
Because the financial impact is frequently dispersed across thousands of claims and multiple departments, organizations may underestimate the true cost. Hospitals that actively monitor payer policy changes, assess operational and financial implications, and rapidly adapt their processes are better positioned to protect revenue and minimize avoidable leakage.
Ekbal Alnajar. President of Insight Revenue Cycle Management at Insight Health System (Chicago). The most significant — and often invisible — source of revenue leakage is short-paid claims that are mistakenly categorized as fully resolved. Most health systems have robust workflows for managing outright denials, but underpayments quietly bypass these queues. When a payer processes a claim, posts a partial payment and the balance reaches zero, standard billing systems generally assume the contractual adjustment is accurate. In reality, complex payer contracts, misapplied bundling logic and subtle processing errors frequently result in hospitals accepting less than they are contractually owed. At scale, these undetected short payments compound into millions in lost margin. Plugging this leak requires shifting from reactive denial management to proactive revenue integrity — specifically by deploying AI-driven analytics to systematically validate expected versus actual reimbursement on every single ‘paid’ claim before the recovery window closes.
Heather Clinton. Director of Revenue Cycle at OrthoNebraska (Omaha). One of the most underestimated sources of revenue leakage today is payer underpayments and downcoding. Rather than outright denying claims, many payers are reimbursing below contract or assigning lower-acuity codes; with the expectation that health systems may not have the analytics, technology or administrative capacity to consistently identify and appeal these discrepancies. Without strong contract management, audit capabilities and focused follow-up, these incremental losses can compound significantly over time.
Ron Wachsman. Chief Revenue Officer of Baptist Memorial Health Care Corp. (Memphis). One of the biggest sources of leakage relates to payer downgrading of DRG assignment. Not only is it substantial, but it is difficult to manage as they can occur as a reduction of normal payment or the result of recoupments from post payment audits. Limiting this activity has become a key item in payer negotiations.
Robert Jacobs. Chief Revenue Officer of South Shore Hospital (Chicago). Addressing the number of self-pay, no insurance, unemployed patients using the ER for services that should be used in a clinic setting. Formal education has to be done or the prices for these types of treatments can be very costly to the bottom line. The uninsured population continues to grow and a number of hospitals cannot continue to stay open.
Ashley Foster. Vice President of Information Systems Applications at MemorialCare (Fountain Valley, Calif.). I think the largest source of leakage in healthcare occurs when revenue cycle management is approached like a back-office functionality rather than a strategic partnership aligned with clinical operations and patient experience, serving as a primary function of healthcare. Revenue cycle management is an essential component of healthcare that can drive efficiency, automation and optimal workflows so patients are billed accurately, and revenue is applied in a timely manner improving the payment process for patients, providers and healthcare systems alike.
Carol Siedsma. Vice President of Revenue Cycle at Berkshire Health System (Pittsfield, Mass.). Maintaining revenue cycle seasoned staff is one of our biggest challenges that influences revenue cycle leakage.
Jeff Mincher. Senior Vice President and Chief Revenue Cycle Officer of Texas Health Resources (Arlington). The biggest source of revenue leakage is typically upstream process breakdowns, not downstream billing issues. Challenges in areas such as patient access, authorization, documentation, charge capture and payer policy compliance often create preventable denials and missed reimbursement opportunities. The greatest value comes from preventing issues before claims are submitted rather than trying to recover revenue afterward.
Leticia Longoria. Patient Financial Services Director at Hemphill County Hospital (Canadian, Texas). As a rural critical access hospital with limited staff, we spend an enormous amount of time following up on denials that should never have occurred. Many of these claims deny for missing medical records, authorization issues or incorrect network status, even when the documentation or authorization was already in place.
For example, we recently had more than $400,000 in swing bed claims denied by WellMed because their third-party vendor failed to communicate valid authorizations. It took months of escalations and persistent follow-up to have those claims paid correctly. We also routinely see UnitedHealthcare Marketplace claims incorrectly deny as out-of-network. After we call, the payer acknowledges the issue and agrees to reprocess the claim, only for it to deny again for timely filing, requiring another appeal.
The revenue leakage isn’t because the claims aren’t payable; it’s because providers spend countless hours correcting payer errors instead of being paid correctly the first time. Every unnecessary denial delays cash flow, increases administrative costs and diverts limited resources away from patient care.
I believe this is an area that needs greater oversight and accountability. When the same payers repeatedly issue incorrect denials or create barriers that require multiple appeals before paying valid claims, there should be monitoring to identify those patterns and hold plans accountable. Rural hospitals, in particular, do not have unlimited staff to continually fight for reimbursement that should have been paid correctly from the beginning.
Joe Bedwell. System Director of Revenue Cycle at DCH Health System (Tuscaloosa, Ala.). I believe one of the most underestimated sources of revenue leakage is operational variation. Small inconsistencies in scheduling, registration, physician documentation, authorization or charge capture often seem insignificant in isolation, yet collectively they create millions of dollars in avoidable leakage. For example, inconsistent timing in patient status changes has created denials and downgrades that were avoidable. We continue to identify and focus on variation in our internal processes that negatively impacts revenue.
Erika Whitney. AVP of Revenue Cycle Operations at Synchrony Health Services (Evanston, Ill.). One source of revenue leakage that hospitals often underestimate is patient friction. We tend to think of revenue leakage as denials, underpayments or billing issues, but revenue is also lost when patients choose not to schedule care because the process is difficult, inconvenient or doesn’t align with their expectations.
Patients increasingly expect healthcare interactions to mirror the convenience they experience in other industries. When scheduling an appointment requires multiple phone calls, limited business-hour availability or navigation of complex processes, some patients simply delay care or seek services elsewhere. For elective, preventive and wellness services in particular, those barriers can represent a meaningful source of lost revenue.
Revenue cycle begins long before a claim is generated. Organizations that make it easier for patients to access care often strengthen both the patient experience and financial performance.
Ticia Selmon. Director of BHMG Coding Education at Baptist Health (Louisville, Ky.). A big source of revenue leakage that is underestimated is expected reimbursement. Lack of checks and balances between contract terms, what was billed, what was denied and why, and what was reimbursed against what was expected perpetuates revenue leakage. Usually staffing resources and lack of sophisticated technology are the barrier to a reliable process.
Eric Risedorph. Director of RCM Integration and Client Services at Parkview Health (Fort Wayne, Ind.). Most hospitals focus on denial management, but the real leakage occurs much earlier. Revenue is often lost before the patient encounter through avoidable authorization, eligibility and registration errors. Every denial prevented at the front end is far more valuable than a denial appealed on the back end.
Korisa Stambaugh. Director of Revenue Cycle at OneOncology. I would say the biggest source of revenue leakage begins at the front-end. Getting the patients demographics and insurance right at initial intake is critical. This can have so many downstream effects such as time of service collections, referrals, authorizations and ultimately patient balances, which are the hardest to collect on after the fact, not to mention the impact to patient’s experience, when they are already going through difficult times, getting an erroneous bill just adds more stress.
Prajay Kotamreddy. Manager of Claims at Desert Valley Hospital (Victorville, Calif.). I believe the biggest source of revenue leakage is not denials, it is “Organizational Complexity.”
Every hand off between departments, every disconnected system, every manual workaround and every unclear ownership structure introduces friction into the reimbursement process. Individually, these failures appear insignificant. At scale, they become one of healthcare’s largest hidden costs.
Many organizations focus on recovering revenue after it has been lost. The greater opportunity lies in eliminating the conditions that create revenue leakage in the first place.
Over the next decade, I believe the most successful health systems will differentiate themselves not through larger revenue cycle departments, but through their ability to use data, automation and artificial intelligence to create a self-correcting revenue ecosystem — one that is able to identify risk before a claim is submitted and tries to continuously improve over time based on the risks analyzed.
Revenue cycle should no longer be viewed as an administrative function, it is one of the most important drivers of liquidity and enterprise value in healthcare.
In my view, cash flow is not just a finance metric, it is the final report card of an organization’s operational discipline.
Khalil El Atab, MD. Group RCM Director of Cambridge Health Group (UAE and Saudi Arabia). One of the most underestimated sources of revenue leakage is incomplete clinical documentation and insufficient alignment between clinical and revenue cycle teams. Missing documentation, delayed authorizations, inaccurate coding, and under-capture of patient complexity frequently result in claim denials, underpayments and lost reimbursement opportunities.
Hospitals often focus heavily on delivering high-quality clinical care, but financial outcomes depend on accurately documenting that care. A simple principle applies: “If it is not documented, it was not performed, and it will not be paid.”
The greater the engagement of clinicians in understanding documentation and coding requirements, the more accurately organizations can capture the true complexity and value of the care provided. Today, AI-powered clinical documentation and coding solutions offer promising opportunities to improve documentation quality, reduce administrative burden, support coding accuracy, and ultimately minimize revenue leakage while enhancing compliance and reimbursement outcomes.
Skyley McLain. Manager of Physician Revenue Integrity at Integris Health (Oklahoma City). The biggest source of revenue leakage is often the disconnect between operational workflows and the revenue cycle, particularly in high-cost procedural areas such as surgery. Many organizations focus on denials after claims are submitted, but leakage frequently occurs upstream through authorization gaps, missed charges, inaccurate registration, supply and implant documentation issues, and workflow variation between departments.
Hospitals that take a multidisciplinary approach to revenue integrity and continuously evaluate these processes uncover opportunities that are often far greater than those found through traditional denial management alone. The most successful organizations embed revenue integrity into daily operations and view it as a shared responsibility across the entire patient journey.
Brett Tracy. With The Landry Group (Houston). I think the biggest source of revenue leakage is the small operational breakdowns that happen every day. A registration error, incomplete documentation, missed charge, or authorization issue may seem minor, but when you multiply those across thousands of patient encounters, it becomes millions of dollars.
The best-performing organizations don’t just have strong billing teams — they have strong operational discipline that prevents those problems before a claim is ever submitted.
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