Preparing for ACA Uncertainty: The Role of AI and Healthcare Payment Innovations

By Dan Storer, Senior Managing Director of Healthcare Banking, and Scott Krah, Senior Vice President, Treasury Management Product Segment Manager at Huntington Bank

Key Takeaways

1. Amid policy and regulatory uncertainty, healthcare providers should consider shifting into a proactive mindset when approaching risk management and revenue cycle efficiencies for long-term financial stability.
2. Investing in automation and AI-powered technology can help address issues before they impact revenue.
3. Think of Medicaid eligibility monitoring as a revenue recovery tool to more effectively utilize Medicaid budgets.
4. The payer mix could shift considerably in the next few years. Improving payment strategies now could help reduce uncompensated care in the future.

Healthcare providers are once again facing rising pressure on their top-line revenue. This new financial strain isn’t coming from a single source – it’s a combination of shifting policy uncertainty, ongoing operational inefficiencies, and economic pressures converging with no clear roadmap.

Affordable Care Act (ACA) health subsidies are approaching expiration, and Medicaid eligibility rules face potential revisions. Changes in payer mix could be on the horizon, which could significantly impact revenue at a time when labor shortages and rising costs are already tightening operational budgets.

For most providers, traditional revenue cycle strategies won’t be enough to maintain long-term financial stability in this environment. Those best positioned for the future will likely be the ones taking proactive steps now to build financial resilience.

The Financial Risk of Waiting

If ACA health subsidies expire as scheduled in 2026, an estimated four to seven million people could lose coverage, according to research from the Marwood Advisory Group^†. While this will affect all providers, Marwood found those in non-Medicaid expansion states could experience a sharper increase in uninsured patients, leading to higher levels of uncompensated care. In response, some patients may transition to Bronze-tier plans, which often include higher out-of-pocket costs – ultimately making it more difficult for hospitals to collect payments^‡. As more patients fall into an uninsured or underinsured status, shifting the payer mix, the burden of collection shifts further toward hospitals, physician groups, long-term care organizations, and healthcare systems.

Medicaid reform discussions are also introducing potential uncertainty. Proposals to implement work requirements, phase out Medicaid expansion, or impose per capita spending caps could further impact patient eligibility tracking^‡, a notoriously challenging process for hospitals. Given that Medicaid accounted for 18% of the total national health expenditure in the U.S. as of 2023^§, any disruption that further complicates benefits verification for providers could have financial ramifications.

Finally, providers continue to struggle with their margins. In a 2024 Deloitte survey, approximately 24% of healthcare CFOs reported that their margins have fallen short of expectations over the past three years^≠, reinforcing the need for more aggressive cost efficiency strategies as soon as possible.

Waiting for policy clarity will only prolong financial uncertainty – leaders should consider acting now to mitigate revenue risk. A more strategic approach to revenue cycle management, Medicaid qualification of benefits, and payment processes can help improve financial stability even amid external challenges.

Consider AI Investments for Smarter Claims and Denial Management

Claims denials have reached their highest point since the ACA marketplace was established in 2015^Ɫ. While denials directly impact revenue, they also increase administrative costs – a Premier National Survey found hospitals and health systems spend an estimated $19.7 billion annually managing denials^Ⱡ. The most common reasons for denials include missing or inaccurate information, authorization issues, and incomplete patient details, all of which could be mitigated with better technology implementation. Despite this, 60% of denied claims are never appealed^Ω, meaning providers are leaving revenue on the table.

To address this, leading healthcare organizations have begun shifting focus toward denial prevention and reimbursement acceleration through technology. One survey found 45% of healthcare organizations are planning investments in claims management technology within the next six months specifically to address these issues^Ɫ. Artificial intelligence capabilities offer a solution.

AI-driven claims automation can flag potential denials before submission, which reduces the likelihood of rejected claims and shortens the reimbursement cycle. Automated coding solutions can also reduce manual errors and speed up adjudication, decreasing the need for appeals and write-offs. Deloitte estimates that AI solutions could reduce time spent on health information management and coding by 61% to 71% by improving speed and accuracy while reducing back-and-forth with payees^††. Denial resolution cycles are already stretching provider cash flows, so the ability to address claim issues before they impact revenue is becoming a competitive advantage.

Turn Medicaid Eligibility into a Revenue Recovery Opportunity

Medicaid eligibility fluctuates frequently, and providers lack the tools needed to reliably monitor and track it. Failing to bill Medicaid for services provided to eligible patients leads to unnecessary write-offs and unclaimed revenue. This issue could become more urgent if new Medicaid eligibility restrictions, such as through work requirements, are introduced that could result in more frequent eligibility status changes. With leaders being tasked with improving margins, healthcare providers can’t afford not to utilize their Medicaid budget effectively.

According to Marwood’s findings, work requirements are the most likely Medicaid change that could pass via the budget reconciliation process this year and would impact roughly 70% of the Medicaid expansion population in any state that implemented work requirements. In Arkansas, in 2019, 25% of those subject to the work requirements lost coverage in six months, showing the potential increased complications for providers in work-requirement states, which could start as soon as 2026^‡.

Investments in improved tracking solutions to identify eligible patients and adjust billing accordingly should be considered a priority. Treating Medicaid eligibility monitoring as a revenue recovery tool can allow providers to:

• Identify newly eligible patients before claims become bad debt or charity care.
• Reduce denials by monitoring eligibility determination after the patient encounter.
• Capture reimbursement opportunities that otherwise might go unbilled.

Medicaid redeterminations are becoming more complex. Hospitals and health systems that improve tracking capabilities stand to protect more of their revenue.

Rethink Payment Strategies to Reduce Uncompensated Care

Payer mix shifts can lead to healthcare revenue leakage and a loss of predictable cash flow. More patients enrolling in high-deductible plans or shifting to Bronze-tier ACA coverage will drive providers to see higher outstanding balances and bad debt. A surge in uninsured patients will exacerbate the situation. Yet, many organizations still rely on outdated payment systems that make collections inefficient.

Improving payment processes can help providers recover more revenue without increasing administrative costs. With 53% of organizations citing cost efficiency and productivity as a top priority for 2025^≠, modernizing payment workflows has become a central strategy for building resilience.

Key areas of improvement include:

• Digital payment flexibility: Expanding patient payment options could help improve collection rates while reducing administrative strain.
• Automation of refunds: Allowing patients to choose their reimbursement method can help providers return overpayments faster, reducing unresolved credit balances that have increased due to the No Surprises Act’s unintended consequences.
• Patient financing options: Structured payment plans allow providers to recover more revenue without increasing collection costs.
• Prioritize revenue cycle management: A well-structured RCM process can help streamline billing, clear receivables faster, and reduce costs.

Rising uncompensated care means the gap between billed charges and collected revenue will likely widen for providers who don’t adjust payment models.

Building Financial Resilience Despite Healthcare Uncertainty

Healthcare leaders can’t predict policy decisions, but they can control how their organizations prepare for them. Those that take a proactive approach to revenue cycle optimization, automation, and payment strategy could be better positioned to navigate ongoing financial pressures.

Going forward, providers can focus on these areas to help build resiliency:

1. Integrate automation to streamline claims, coding, and eligibility tracking.
2. Treat Medicaid eligibility monitoring as a revenue protection strategy.
3. Modernize payment workflows to strengthen collection rates and improve financial performance.

With operating margins under pressure and regulatory shifts on the horizon, healthcare organizations must move beyond traditional cost-cutting strategies and take a more strategic approach to financial stability. Financial success depends on building a system that adapts to change rather than reacting to it.