Survey: Practices turn to AI to ease billing delays and revenue cycle pain

Hospitals and medical practices continue to battle delayed reimbursements, costly billing systems, and rising administrative workloads, according to a new survey from Smarter Technologies and MedCity News.

The 2025 Revenue Cycle Management (RCM) Survey, based on responses from 125 billing executives and support staff, found widespread inefficiencies straining operations and margins — and growing optimism that artificial intelligence (AI) could ease the burden.

The report paints a picture of widespread inefficiency that continues to strain health care operations and margins — and of rising optimism that artificial intelligence (AI) could help ease the load.

Slow payments, high denial rates

Nearly half of survey respondents said they wait six to eight weeks for payment, while Medicaid reimbursements often take more than six months. Twenty percent of organizations reported spending over 10% of each bill’s value just to collect payment.

Larger hospital systems, those handling more than 10,000 discharges annually, reported denial rates of 10% or higher. That is roughly double those seen in smaller hospitals.

“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 Mike Gao, M.D., president of Smarter Technologies. “Hospitals and practices want technology that doesn’t just reduce errors and speed up reimbursements — they want tools that give their staff time back, make patient billing easier and ultimately help them focus on care instead of paperwork.”

Billing systems under strain

Respondents described billing software as expensive and inefficient. The most common complaints were in reference to high costs, coding errors and confusing systems.

Many users reported that their current systems lack basic denial tracking or integration features, leading to additional rework and administrative burdens.

Larger health systems were more likely to report higher denial rates and greater frustration with costly or outdated software. Smaller practices cited system complexity.

Overall, respondents are looking for technology that integrates seamlessly with existing workflows and provides real-time claims tracking, customizable dashboards and built-in compliance tools.

The rise of AI

More than 90% of health care leaders surveyed expressed interest in AI-driven billing solutions, with 44% saying they are “very interested.” Respondents said AI could have the greatest impact in billing and collections, patient financial services, and payer communications.

Two-thirds of respondents said they have already worked with AI-led vendors, and most described the results as positive.

Automation is seen as a key tool for reducing manual work and burnout, particularly in areas like eligibility verification, denial management and payment reconciliation. By streamlining these tasks, AI can help practices improve productivity while addressing workforce shortages.

Policy and technology pressures

Billing leaders cited both state and federal policy as mixed influences on their ability to collect payments. While 65% said state-level policies make collections easier, 44% said federal regulations are creating new hurdles.

Respondents also pointed to software costs, coding errors and compliance requirements as major operational burdens.

When choosing technology partners, respondents said peer recommendations, standout features and strong customer service are the most important factors. Many noted the need to replace underperforming systems that rely too heavily on manual processes.

The road ahead

Ken Montgomery, publisher of MedCity News, said the findings mirror broader trends in health care administration. “The findings reinforce trends we’re seeing across our newsroom and conferences,” he said, “particularly the growing demand for AI solutions that streamline prior authorization and billing processes that help organizations make more informed revenue cycle management technology decisions.”

The 125 medical billing executives and finance leaders surveyed came from hospital and practices of varying sizes across the United States. More than half (55%) have worked in health care for six years or longer.