Revenue cycle performance has long been tracked through operational metrics: denial rates, days in accounts receivable, cost to collect. In 2026, hospital and health system CEOs began discussing it as part of a broader strategy, naming it in turnaround plans and budget conversations.
Heading into 2027, some say that focus is intensifying, driven by payer denials at levels CFOs have called unsustainable, federal policy changes set to shrink Medicaid enrollment and an AI-fueled claims advantage on the payer side that most providers have not yet matched.
The policy backdrop makes the stakes concrete. Premier has projected hospitals will lose $68.6 billion in revenue in 2026 and 2027 as Medicaid enrollment shrinks, with HR 1’s work requirements and financing restrictions set to take full effect. Revenue cycle leaders at 17 health systems said in September that payers are reviewing claims with AI at a scale most providers have not yet reached, a dynamic expected to deepen as coverage losses add more uninsured patients to the mix.
For Josh Martin, CEO of Summit Pacific Medical Center in Elma, Wash., those pressures make revenue cycle the function that will separate hospitals that finish 2027 in the black from those that do not. Summit Pacific is increasing its investment in revenue cycle systems and exploring new central billing office partnerships. Rather than cutting elsewhere, Mr. Martin said the system is redeploying its population health resources to help patients navigate insurance eligibility as Medicaid enrollment losses take hold.
“As HR 1 takes effect, Medicaid will lose enrollees, and insurance companies will fight harder to pay providers less going into 2027,” Mr. Martin told Becker’s in September. “What determines whether a hospital is in the red or black next year all comes down to its payer strategy and revenue cycle optimization.”
The pressure Mr. Martin describes is not limited to smaller systems. Across the industry in 2026, several health system CEOs named revenue cycle as central to their financial strategies, particularly in the context of turnarounds. St. Louis-based Ascension narrowed its operating loss by $371 million in fiscal 2026, closing out a three-year recovery. President and CEO Eduardo Conrado said the recovery came down to fundamentals: “How do we run efficiently? How do we drive out into a proper site of care? And then how do we manage a revenue cycle?”
Ngozi Ezike, MD, president and CEO of Sinai Chicago, similarly named stronger revenue cycle management among her top priorities for the year.
How to manage that work has itself become a CEO-level decision. Renton, Wash.-based Providence sold its revenue cycle company, Acclara, to R1 RCM for $675 million as part of its $400 million turnaround, with President and CEO Erik Wexler saying the system was “not the best-known experts at revenue cycle.” Dallas-based Tenet Healthcare is taking a different approach, investing further in its Conifer revenue cycle business. CEO Saum Sutaria, MD, described the goal as reducing cost to collect over time while improving speed and yield.
Jason Smith, MD, PhD, CEO of UofL Health in Louisville, Ky., said the answer to whether revenue cycle is commanding more of his attention heading into 2027 was direct: “Absolutely.” Dr. Smith cited 340B changes, HR 1 and state-directed payment challenges as a combined set of pressures shaping UofL Health’s revenue cycle focus heading into 2027.
Dr. Smith said the effort extends beyond payer contracting to how patients move through the system, from office to OR to home.
“How can we move them the most efficiently through the system?” he said. “That’ll let them feel better, and it’ll be a better revenue cycle generation for us. All of that becomes a huge operational and financial goal for us moving forward.”
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