Healthcare providers are drowning in administrative costs and payment delays, creating ripple effects throughout the collection ecosystem, according to a new survey from Smarter Technologies and MedCity News.
The 2025 Revenue Cycle Management Survey, which polled 125 billing executives and support staff, found that nearly half of respondents wait six to eight weeks for standard payments, while Medicaid reimbursements stretch beyond six months. Perhaps most striking: 20% of organizations spend more than 10% of each bill’s value simply trying to collect payment.
For collection professionals working with healthcare clients, the implications are clear. Larger hospital systems handling over 10,000 discharges annually reported denial rates of 10% or higher, roughly double those of smaller facilities. These delays and denials ultimately push more accounts into third-party collections.
Despite these challenges, there’s notable optimism about technology solutions. More than 90% of healthcare leaders surveyed expressed interest in AI-driven billing solutions, with 44% reporting they are “very interested.” Two-thirds have already engaged with AI-led vendors, with most describing positive results.
“Revenue cycle inefficiencies remain a major drag on health care organizations, but this survey makes it clear leaders see AI and automation as the path forward,” said Dr. Mike Gao, president of Smarter Technologies, in a published report.
Healthcare organizations see AI’s greatest potential in billing and collections, patient financial services, and payer communications. Automation is particularly valued for reducing manual work in eligibility verification, denial management, and payment reconciliation.
Current billing software drew harsh criticism, with respondents citing high costs, coding errors, and confusing systems. Many lack basic denial tracking or integration features, forcing additional rework.
The regulatory environment presents mixed signals. While 65% of respondents said state-level policies ease collections, 44% reported federal regulations create new obstacles.
For collection agencies and law firms serving healthcare clients, understanding these upstream challenges is essential. As providers increasingly adopt AI tools to improve their internal processes, collection partners who can integrate with these modern systems and address persistent payment delays will be positioned to strengthen their healthcare portfolios.
