New Research: Untangle Healthcare’s Revenue Cycle Mess

Forrester is preparing to release new research on revenue cycle management (RCM). RCM is no longer just about billing and payments. It’s a critical component of financial health and customer experience, yet the administrative burden, friction between payers and providers, high labor costs, complex user interfaces, and rising denial rates have made RCM a pain point for healthcare organizations (HCOs).

AI Threads Order Through RCM’s Twisted Web

Turnover and inefficiencies plague healthcare operations, and RCM sits at the center of this storm. Nearly 80% of revenue cycle leaders are seeking strategic partners, new technologies, and ways to eliminate redundant systems. But automation has been part of RCM for decades, streamlining repetitive tasks such as payment posting and claims submission. These tools have delivered measurable benefits but fall short in addressing business complexity. Manual interventions remain common, and errors still slip through.

Artificial intelligence is no longer a “nice to have” in RCM — it’s a best practice. AI-driven tools can predict denial risks, optimize collections, and improve coding accuracy. They enable real-time insights and continuous learning, reducing waste and improving financial outcomes. As AI investments increase, HCOs are looking to realize a broad range of benefits. This includes improved denial prevention, accelerated billing cycles, improved revenue yield, higher cash flow, and improved workforce efficiency, just to name a few. But vendor offerings and capabilities can be overwhelming to HCOs with unique workflows, payer mixes, and compliance requirements. AI must be tailored — not just implemented — to deliver meaningful results. HCOs can synchronize RCM processes and remove barriers that hinder financial performance by:

Focusing on high-impact areas. Maximize ROI by starting with high-impact areas (i.e., coding and denial management). These areas deliver quick wins and improve accuracy where errors are most costly. Use AI-driven tools that provide checks and balances to ensure transparency and defensibility, such as audit trails and continuous learning in coding decisions.
Making data quality your foundation. Prioritize data governance before deploying advanced tools. AI success will be limited without clean, standardized, and democratized data. Poor data leads to flawed insights and compliance risks, undermining every other RCM investment. Build strong data pipelines to enable accurate coding, denial prevention, and financial performance improvements.
Customizing workflows for flexibility. Avoid rigid AI implementations. Choose solutions that allow custom workflows, defining which tasks AI handles and which require human oversight. Tailor processes to payer-specific and organizational guidelines to ensure compliance and efficiency. This flexibility helps balance automation with human judgment for better outcomes.

The Bottom Line

RCM has evolved into an essential lever to boost a patient’s financial health and satisfaction. HCOs will need to work with their RCM vendors to stitch together a seamless revenue cycle that maintains order, consistency, and accuracy, all while delivering a satisfying customer experience. HCOs need to think through their current approach to RCM, AI integration, and vendor partnerships to optimize this process.

Ready To Detangle The RCM Knot?

To dig deeper and prepare for your organization’s RCM transformation, stay tuned for our report, “Transform Revenue Cycle Management With A Shared Vision To Build Value.” It will help IT, finance, and RCM leaders optimize vendor value without compromising the customer experience or value-based care. Please schedule a guidance session to learn more.