Revenue cycle teams are entering a new era: one shaped by AI, intelligent tools and emerging roles. As technology rapidly evolves and new data science partners enter the space, health systems face growing pressure to match the automation capabilities payers have leveraged for years.

The future of revenue cycle work, according to Erin Hodson, vice president of revenue cycle at Falls Church, Va.-based Inova Health System, will rely on mastering complex denial patterns, embedding AI agents into workflows and preparing staff for roles that didn’t exist a year ago.

In a recent episode of the Becker’s CFO and Revenue Cycle Podcast, Ms. Hodson shared how these shifts are redefining not just claims management, but team structure and strategy. She also discussed the rise of AI agents, the technical nuances of denial management and why health systems must catch up to payers in the “AI arms race.”

Editor’s note: This is an excerpt from an episode of the Becker’s CFO and Revenue Cycle Podcast. Responses are lightly edited for length and clarity. Click here to listen to the full episode of the podcast.

Question: What are the top three trends you are paying most attention to today?

Erin Hodson: First, the number of intelligent tools that either didn’t exist a few months ago or are just now becoming available is phenomenal. I envision that we’ll soon be able to predict denials more accurately and even prevent them in ways we couldn’t before. That’s incredibly exciting.

The second trend is the development of AI agents to manage denials. As much as we try to prevent denials — and we will prevent some — they will continue. These tools will better position us to work with payers and escalate issues where we notice trends, and to do so at a more granular level than in the past. Managing incoming denials quickly is essential, and I think we’re just scratching the surface of what these agents can do. At Inova Health System, we’re in the early stages, but I’m cautiously optimistic about what this technology could mean for us in the year ahead.

The third trend involves the evolving dynamic of our team. We’re seeing new skill sets emerge — ones we didn’t need a year ago — and that’s reshaping our workforce. It’s exciting to watch people step into roles that didn’t even exist a year ago and to see a new level of critical thinking. I’m looking forward to seeing our leaders and frontline team members continue to grow and excel in their revenue cycle careers.

Q: What specific tools are you referencing? Are these primarily AI-based or automation tools, and how do you see them helping to better protect your financial performance, particularly when it comes to denials?

EH: I’ve seen new potential technology and data science partners emerge over the last six months — names many of us hadn’t even heard of before. And in conversations with fellow revenue cycle VPs across the country, there’s a shared sentiment that this space is evolving quickly.

To dive a bit deeper, one of the persistent challenges for every revenue cycle team is [claim adjustment reason codes] and remark code mapping — remittance code mapping — to understand how different payers use denial codes. One payer might use a code for simplicity, while another uses it with far more granularity. The variation makes it hard to know exactly what’s coming back at you.

I think the ability to have those CARC and remark code mappings standardized will open us up to a world of information we didn’t have before. We’re also seeing data science partners who can help link your 837 claim data going out with your 835 denial data coming back in — offering insights down to a 10-foot level. They can help pinpoint whether the issue is due to an internal process or something that wasn’t followed correctly, which led to a denial. But sometimes the denial isn’t specific enough to explain why, so you might send the medical record, get denied again, and not realize there was a more specific detail the payer needed.

In the future, I envision a world where we don’t have to play that guessing game — where we eliminate the delays in payment. That’s what’s so exciting. I also believe these new tools will require a different way of thinking and working on our part. We’ll need to figure out how to manage plans in bulk and work with our payers in ways we haven’t before. That’s what I’d add when going deeper into this topic.

Q: Does that tie directly into the other trend you mentioned — that these new tools coming on board require a different skill set? As you said, there’s a need for a new level of critical thinking and potentially new roles that are specifically linked to using these tools?

EH: Yes, I think there’s a new technical aspect to the revenue cycle that didn’t exist before. It’s about really understanding the intricacies — going under the hood, so to speak — of how a claim moves through the entire revenue cycle. From start to finish, we now need to understand that process at a much more granular level to both prevent and work denials effectively.

I also believe the way front-, middle- and back-end team members collaborate will look very different in the future. I can’t say exactly what that will look like, but we’re already seeing changes today. For example, we’ve begun establishing new governance structures. Denials prevention, for instance, now falls within our revenue integrity space. I’ve asked other revenue cycle leaders where they’ve placed that function — some put it under analytics, others elsewhere. At Inova, we have analysts working directly with our revenue integrity and denials prevention team.

That’s a clear example of how the structure of teams is changing, with roles that didn’t exist even a year ago now becoming critical parts of our operations.

Q: Payers have been using AI and automation in their workflows for quite some time. It feels like providers are now starting to catch up, embedding AI more meaningfully into the revenue cycle. How do you see this “AI arms race” evolving in the coming years as AI becomes more sophisticated and more deeply integrated into the revenue cycle by payers and providers?

EH: I think about that a lot. I like using a sports analogy here. Imagine a basketball team — Team A — that’s really strong on defense. The payer, in this case, has a powerful offensive strategy. By the end of the game, if you’re good defensively, you’ve figured out their key plays and players, and you win. But then the next game comes, and suddenly they’ve got new stars you didn’t even know they had access to — players who can drain shots like Caitlin Clark, over and over. How do you defend against that?

That’s how I think about it. It might not be the perfect analogy, but it captures the dynamic. My hope is that we eventually reach a point with payers where we’re no longer just spinning our wheels. That we can level the playing field.

How do we create the same level of administrative burden on their end as we carry on ours? How do we negotiate contract clauses that limit denials, or protect our revenue capture — what some call contract yield percentage? To even have those conversations, we need the same tools payers have had for years. We’ve been in catch-up mode, but we’re getting to a place where we can engage at that level.

Because they will come up with new plays — there’s no doubt. And we have to constantly evolve defensively to keep up.

Q: Is there anything else you’re particularly excited about when it comes to the future of the revenue cycle?

EH: I think the use of AI agents, especially in denials management, is really interesting. As I mentioned earlier, it ties back to how our teams will evolve. I actually heard a great point at the last Becker’s conference I attended: The future will be leaders managing processes through AI agents, rather than just managing people.

That doesn’t mean we won’t still need people — we absolutely will. But we’ll be using them in a very different way, with a different skill set than what we’re training for today.

The idea of team members working alongside an AI co-pilot to expedite or improve the accuracy of their work is fascinating. From a claims perspective, just think about working a queue: eventually, we’ll be able to manage claims in bulk instead of one by one. That shift will significantly accelerate the process and, ideally, lead to faster and more accurate payment.

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