Kodiak’s revenue cycle analytics software monitors patient financial transactions from more than 2,000 hospitals and 275,000 physicians nationwide.
The three headwinds revenue cycle leaders are facing, per Kodiak, are:
1. Growing initial and final denials: These rates have been trending upward for the past five years, according to Kodiak. The initial denial rate increased to 11.8% in 2024 from 11.5% in 2023. The initial denial rate in 2020 was 10.2%. The final denial rate held steady 2.8% in 2024, but rose from 2.4% in 2020.
2. Growth in Medicare managed care: From 2023 to 2024, the initial request for information denial rates stayed relatively unchanged or decreased in most payer categories. However, the rates for patients insured by commercial plans and Medicare Advantage plans increased by 1.5% and 4.8%, respectively. The initial RFI denial rate for commercial/all managed care was 30.04% in 2024, up from 29.59% in 2023. The denial rate for Medicare Advantage plans was 23.35% in 2024, up from 22.29%.
3. Growth in patient responsibility and collection changes: Commercially insured patients were responsible for a greater share of their medical bills in 2024 than in 2023. Commercially insured patients also paid less of what they owed after insurance. Kodiak said this had a “compounding negative impact on revenue cycle performance,” which could be exacerbated by new federal rules that remove unpaid medical bills from consumer credit reports. The rules are scheduled to take effect on March 17, though the fate of the rules is unclear after changes at the Consumer Financial Protection Bureau under the new White House administration.
Read the full report here.
