VAB RCM

12/26/2025

12/14/2025

More than 530,000 Michiganders currently rely on the health insurance marketplace for coverage. About 480,000 of them receive tax credits to help pay their premiums, according to the Michigan Health & Hospital Association. https://bit.ly/3YvHnaJ

12/13/2025

Effects of Inflation on Payment Behavior in the Medical Billing Industry in 2025
In 2025, inflation significantly strained patient payment behavior in the U.S. medical billing industry, primarily through elevated medical inflation (outpacing general inflation) and rising out-of-pocket (OOP) costs. General CPI inflation hovered around 3-4%, but healthcare-specific costs rose faster: medical care services increased ~4.2% year-over-year in mid-2025, while commercial group market trends reached ~8-9.7%. Global medical trends were even higher at ~10.4%, with U.S. employer-sponsored plans seeing substantial hikes.
Key drivers included:

Higher provider costs (labor, supplies, drugs) are passed to patients via high-deductible plans.
Increased utilization of behavioral health, specialty drugs (e.g., GLP-1s), and post-pandemic deferred care.

This led to notable shifts in payment behavior:

Increased Difficulty Paying Bills
—over 53% of Americans struggled with unexpected bills >$1,000 (or >$600 for lower-income/credit groups.
~86% reported rising prices made managing bills harder, with 30% draining savings and others using high-interest credit.

Delays and Non-Payment
Patient delays rose due to confusion (71% confused by bills) and affordability. Bad debt increased as providers shifted to upfront collections, point-of-service payments, and aggressive policies, turning manageable balances into uncollectible debt.

Higher Medical Debt and Collections
~36% of households had medical debt; 32-67% found inflation worsened bill payment (up from prior years). More bills entered collections, with routine visits contributing more to debt than hospitalizations.
Avoidance of Care
~One-thirddelayed/skipped care due to costs, exacerbating future expenses and bad debt cycles

Provider Impacts
Hospitals faced thin margins (e.g., 2.1% average), leading to more patient financing roles. Bad debt rose from self-pay-after-insurance (up to 57% of cases), prompting adoption of digital tools, AI analytics, and flexible plans to predict/recover payments.

Overall, 2025 saw a "triple whammy" of medical inflation, consumer inflation, and OOP shifts, eroding affordability and pushing patients toward delays, partial payments, or default—increasing industry bad debt while providers innovated with low/no-interest plans and transparent billing.

Forecast for 2026
Medical cost trends are projected to remain elevated in 2026, with limited relief from deflationary forces. Forecasts indicate:

U.S. healthcare costs rising ~9.6% (slightly down from 9.7% in 2025 but still high).
Global averages >10%.
Employer premiums up 6-9%.

Inflators persist: new technologies (74% of insurers cite as top driver), pharmacy/outpatient pressures, behavioral health (10-20% trend), and provider consolidation/labor costs.
Payment behavior is likely to face continued pressure:

Worsening Affordability and Delays
Premium/deductible hikes (e.g., Medicare Part B premium to ~$206.50) will strain households, leading to more delays, skipped care, and bad debt. Expiration of enhanced ACA subsidies could spike individual market premiums 18%+, shifting more costs to patients.
Rising Debt and Collections → Without major interventions, medical debt burdens (already affecting millions) may grow, with patients relying more on credit/plans. Providers may intensify upfront collections and digital engagement to mitigate.

Potential Mitigations
Biosimilars, AI for efficiency/fraud detection, and outcomes-based drug models could temper some costs. Flexible/no-interest plans and preventive focus may help, but structural issues (e.g., fee-for-service rewarding volume) suggest persistent challenges.

Industry Adaptations
Expect more predictive analytics for non-payment risks, personalized payment options, and outsourcing to reduce bad debt. However, if utilization and prices don't moderate, 2026 could see the sharpest employer cost jumps in over a decade.

In summary, while 2025 highlighted inflation-driven delays and rising bad debt, 2026 forecasts sustained high trends—likely prolonging cautious payment behaviors unless offset by policy changes (e.g., drug negotiations effective 2026) or broader cost controls. Providers and payers will increasingly prioritize patient-centric financing to maintain collections amid affordability strains.

12/03/2025

In the medical billing sector, revenue cycle management (RCM) continues to evolve amid rising healthcare expenditures, technological integration, and regulatory pressures. As of Q4 2025, the global medical billing market is valued at approximately USD 20.04 billion, reflecting a year-over-year growth of about 12% from 2024, driven by demand for outsourced services and digital tools. Key drivers include a projected compound annual growth rate (CAGR) of 12.17% through 2034, fueled by AI adoption and value-based care models. This update focuses on the most recent advancements, emphasizing compliance, efficiency, and patient outcomes to support billing professionals in optimizing reimbursements and minimizing denials.

11/26/2025

MEDICARE IN 2025–2030:
WHAT PATIENTS AND BILLERS NEED TO KNOW NOW

Medicare just celebrated its 60th birthday, but 2025 has brought the most significant changes to the program in a decade. Whether you're a healthcare provider managing your revenue cycle or a beneficiary trying to understand your coverage, these shifts will affect your bottom line and your out-of-pocket costs.

Premium Increases Outpacing Cost-of-Living Adjustments
The numbers tell a sobering story. In 2025, Medicare Part B premiums rose to $185.00 per month, an increase of $10.30 from the previous year. But that was just the beginning. In November 2025, the Centers for Medicare & Medicaid Services announced the 2026 Part B premium would jump to $202.90—a 9.7% increase that represents the largest single-year spike in four years. Meanwhile, the Part B deductible is climbing to $257 in 2026.
These increases are creating a ripple effect across the system. More beneficiaries are finding themselves pushed into Income-Related Monthly Adjustment Amount (IRMAA) brackets, which means higher premiums for those with higher incomes. For billing departments, this translates to an uptick in balance-billing complaints as patients struggle to understand why their costs keep rising faster than their Social Security benefits.

Part D's Mixed Blessing
On the prescription drug front, Medicare Part D has undergone a transformation that's both welcome and worrisome, depending on where you sit. The good news for patients is clear: a $2,000 annual out-of-pocket cap is now in effect, and the infamous "donut hole" coverage gap has been eliminated for good. For many seniors juggling multiple medications, this represents genuine relief.
The complications emerge when you look deeper. Pharmaceutical manufacturers must now provide substantially larger discounts during the catastrophic coverage phase, and some insurance plans have responded by shifting costs earlier in the benefit year. If you're billing for pharmacies or managing medication claims, expect to see higher denial rates for non-formulary drugs, particularly GLP-1 medications, unless obesity is clearly documented as the primary diagnosis rather than diabetes or weight management.

Medicare Advantage's Growing Dominance
Perhaps the most dramatic shift in Medicare's landscape is the continued expansion of Medicare Advantage plans. These private insurance alternatives now cover 54% of all Medicare beneficiaries, and that share continues to grow. But the 2025 payment increase to MA plans was a modest 3.7%, forcing many insurers to trim supplemental benefits and narrow their provider networks to maintain profitability.
New CMS regulations are also reshaping the MA market. Plans can no longer impose prior authorization requirements during a patient's final 90 days of life, and sales agents are now prohibited from receiving incentive-based compensation. While these changes aim to protect vulnerable beneficiaries, they're creating administrative headaches elsewhere.
Here's a critical tip for billing professionals: verify that the Medicare Advantage plan your patient believes they have matches what actually appears in the CMS Medicare Advantage Prescription Drug (MARx) system. Mismatches between patient expectations and actual coverage are occurring at unprecedented rates, leading to denied claims and frustrated patients.

Looking Ahead: The 2026–2030 Landscape
The longer-term outlook for Medicare is more uncertain than it's been in decades. Policy proposals collectively known as "Project 2025" and provisions in the July 2025 Reconciliation Act are pushing Medicare toward a "premium support" model—essentially a voucher system where beneficiaries receive a fixed contribution to purchase coverage. Default enrollment into Medicare Advantage plans rather than traditional Medicare is also on the table.
If these proposals become law, many healthcare policy experts predict that traditional fee-for-service Medicare could shrink to less than 30% of all beneficiaries by 2034. For medical practices that have built their revenue models around predictable Medicare fee schedules, this would represent a seismic shift requiring fundamental changes in how they contract, bill, and manage cash flow.

What Practices Should All Those Who Are Concerned Do Now
Preparation is key. Front desk staff must receive training on the 2026 IRMAA income brackets, which were released in November 2025. These thresholds determine which patients will pay higher premiums, and understanding them will help you field questions and reduce patient frustration.
Run Medicare Advantage plan verification reports every quarter rather than annually. The rapid changes in this market make old information obsolete quickly, and catching coverage mismatches early prevents denied claims down the line.
Finally, start preparing your patients now for the $202.90 monthly Part B premium that will appear on their January 2026 statements. Proactive communication can prevent the flood of confused calls that typically follows major premium increases.
Medicare is evolving rapidly, and both patients and providers need to stay ahead of the curve. The decisions made in 2025 and 2026 will shape healthcare delivery for the next decade—understanding these changes now isn't just helpful, it's essential.

11/17/2025

Latest Developments in the Medical Billing Industry for November 2025

As of mid-November 2025, the medical billing sector is experiencing rapid evolution driven by AI integration, regulatory expansions, market growth projections, and heightened focus on compliance and patient affordability. Below is a summary of the most significant updates from the past two weeks, based on industry reports, announcements, and expert discussions. These trends emphasize efficiency gains through technology while addressing persistent challenges like claim denials and rising costs.
1. AI-Driven Tools Empower Patients and Providers in Billing Disputes

A notable case highlighted how AI is democratizing access to billing expertise: A family used Anthropic's Claude AI to reduce a $195,000 hospital bill to $33,000 by identifying duplicate charges, improper coding (e.g., billing for both master procedures and components), and Medicare violations. The AI analyzed the itemized bill and drafted a dispute letter, leading to an 83% reduction. This story, shared widely on social platforms, underscores AI's potential to challenge opaque billing practices and could pressure hospitals to improve transparency.
On the provider side, AI is shifting from reactive to predictive denial management. Tools like those from CapMinds combine AI, robotic process automation (RPA), and predictive analytics to forecast denials before claims are submitted, potentially reducing denial rates below 5%. Industry voices note this "assisted, not exhausted" approach is replacing manual work, with real-time claim tracking and automatic payer rule updates accelerating cash flow.

2. Regulatory Expansions: Medicare Telehealth Flexibilities Extended

The U.S. Senate extended Medicare telehealth flexibilities through January 2026, allowing patients to use their homes as originating sites and providers to offer audio-only services. This builds on permanent expansions for telehealth coverage under Medicare and Medicaid, requiring new billing codes and modifiers for virtual visits. Billing professionals must adapt quickly to avoid denials, with experts predicting a surge in telehealth-specific claims processing.
CMS finalized the CY 2026 Medicare Physician Fee Schedule on November 12, introducing separate conversion factors for Alternative Payment Model (APM) Qualifying Participants (QPs) and non-QPs, a 2.5% efficiency adjustment, site-of-service payment changes, and expanded telehealth services. However, new documentation mandates for telehealth could add up to $1 million annually in compliance costs for some health systems, prompting investments in automated tools.

3. Market Growth and Outsourcing Projections

The global medical billing outsourcing market is forecasted to grow from $23.8 billion in 2024 to $45.6 billion by 2034, at a 6.9% CAGR, driven by AI efficiencies and the need for specialized revenue cycle management (RCM). A November 11 report emphasized how outsourcing helps providers handle complex payer rules and reduce administrative burdens.
Relatedly, the broader medical billing market is valued at $20.04 billion for 2025, up from $17.86 billion in 2024, with electronic billing segments leading due to faster reimbursements via cloud-based EHR integration. Outsourcing trends are accelerating in regions like Asia-Pacific, where developing healthcare systems are adopting advanced tech.

4. Technology and Compliance Innovations

Ambient AI scribes (e.g., Epic+Abridge, Microsoft's DAX Copilot) are becoming standard in 2025 hospital budgets, focusing on structured data for coding, prior authorizations, and CDI/RCM integration rather than just note-taking. Pilots in high-volume areas like EDs and oncology emphasize ROI through reduced documentation time and downstream revenue gains, though human oversight remains key for the first 90 days.
Awards and product launches: OpenPractice received the 2025 HBMA Vendor Service Award for supporting billing communities. Meanwhile, insurers are harnessing AI for real-time billing analysis to combat medical inflation, identifying cost-effective care options and flagging fraud like upcoding.

5. Broader Industry Shifts

Health systems like Rush University and Cook County Health are revamping self-pay billing processes amid rising out-of-pocket costs ($1,650 per person projected for 2025). Strategies include predictive analytics for patient financial risks and streamlined collections.
Concerns over AI replacing clinicians: Discussions warn that "AI-first" insurance plans with $0 copays for algorithm-handled visits could mirror the shift from physicians to nurse practitioners, starting with routine tasks like refills. This could disrupt billing for primary care but boost efficiency in coding and triage.
International note: Australia's government expanded bulk billing incentives in early November, boosting GP payments for universal free visits—a model influencing global discussions on affordability.

11/09/2025

Democrats in Congress will seek to block a new model from the Trump administration adding artificial intelligence-powered prior authorization to some traditional Medicare services.

The Wasteful and Inappropriate Service Reduction, or WISeR, Model will take effect in six states on January 1. As part of the demonstration, the Centers for Medicare and Medicaid Services said Thursday it had selected six companies to use their AI technology for prior authorizations in fee-for-service Medicare.

Lawmakers are looking to block the Trump administration's WISeR model after the agency announced which companies are participating.

10/29/2025

Since becoming law in 2020, the No Surprises Act has shielded millions of consumers from unexpected medical bills. The law requires insurers and providers that can’t agree on reimbursement for an out-of-network claim to submit to independent dispute resolution, or IDR.

During IDR, a third-party arbiter decides which party’s offer — the insurer’s or the provider’s — is fair, taking into account rates in the area, a provider’s quality and other factors.

But what exactly “fair” entails has been a hot topic of debate between insurers and providers. Providers in particular have filed numerous lawsuits attempting to revamp IDR to eliminate perceived bias towards insurers. It hasn’t helped that regulators are still ironing out operational kinks — including how to address ongoing concerns about ineligible disputes cluttering the system.

Now, the new survey from AHIP, the top lobby for the insurance industry, and the BCBSA, which represents independent Blues plans, puts numbers around the frequency with which ineligible disputes slip through the system.

Plans found 39% of claims submitted to independent dispute resolution last year were actually ineligible for the process, but arbiters themselves caught only 17% of improper cases, according to AHIP and the BCBSA.

10/22/2025

In official communication on Oct. 21, the Centers for Medicare & Medicaid Services (CMS) instructs all Medicare Administrative Contractors (MACs) to lift the hold on certain claims that has been ongoing since Congress failed to pass an appropriations bill by Oct. 1, which resulted in a government shutdown.

Claims paid under the Medicare Physician Fee Schedule, ground ambulance transport claims, federally qualified health center claims, and telehealth claims for behavioral and mental health services can now be processed for payment.

In official communication, Oct. 21, the Centers for Medicare & Medicaid Services (CMS) instructs all Medicare Administrative Contractors (MACs) to CMS instructs all Medicare Administrative Contractors to lift the hold on certain telehealth claims.

10/11/2025

Medicare Advantage insurers suffered another disappointing year under the Star Ratings quality measurement program.

The average Medicare Advantage star rating for 2026 is essentially flat at 3.66, compared with 3.65 for 2025, according to data the Centers for Medicare and Medicaid Services released Thursday.

Just over four in 10 Medicare Advantage contracts — which are bundles of plans — earned at least four of five stars, the threshold to qualify for the maximum 5% bonus payment, the same as this year. Eighteen contracts, or 3.5%, won five stars, up from seven for 2025. The annual enrollment period begins next Wednesday and ends Dec. 7.

The highest Medicare Advantage quality scores — and the biggest payment bonuses — are harder to earn than they used to be.

09/22/2025

A UnitedHealthcare bulletin for September 2025 announces updates to laboratory testing, biomarker testing policies, and multiple procedure payment reductions for diagnostic imaging, some to be enforced in late 2025, but announced and explained in recent releases.
https://www.uhcprovider.com/content/dam/provider/docs/public/policies/comm-reimbursement/rpub/UHC-COMM-RPUB-September-2025.pdf

09/04/2025

HHS Expands Access to Affordable Health Insurance

WASHINGTON — The U.S. Department of Health and Human Services (HHS) announced today it is implementing important measures to expand access to more affordable catastrophic health coverage through HHS’ new hardship exemption guidance. This guidance streamlines access to more affordable catastrophic coverage for consumers who are ineligible for advance payments of the premium tax credit (APTC) or cost-sharing reductions (CSRs).

Through these efforts, more Americans will be able to qualify for catastrophic health coverage based on need, beginning November 1st with the start of open enrollment. Catastrophic plans generally have lower monthly premiums, are designed to protect consumers from very high medical costs in the event of serious illness or injury, and are required to cover three primary care visits pre-deductible. Consumers under the age of 30 have always been eligible for catastrophic plans through HealthCare.gov.

“Catastrophic coverage offers affordable health insurance for younger Americans and those facing hardship to have security when they need it most,” Secretary of Health and Human Services Robert F. Kennedy, Jr. said. “Expanding access to catastrophic coverage is another step in making health insurance more affordable, building on the progress made since the passage of President Trump’s One Big Beautiful Bill.”

“President Trump promised to give Americans real choices in health care, and today we are delivering on that promise,” said Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz. “By expanding access to catastrophic plans, we are making sure hardworking people who face unexpected hardships can get affordable coverage that protects them from devastating medical costs. This change reflects our commitment to lowering costs, strengthening program integrity, and ensuring every American has a pathway to coverage that fits their needs without burdening taxpayers.”

Under new HHS guidance, consumers may qualify for a hardship exemption to purchase a catastrophic plan on or off the Exchange if they are determined or expect to be ineligible for APTC or CSRs based on their projected annual household income. Catastrophic plans are specialized plans that provide all essential health benefits required under the Affordable Care Act, including full access to preventive services without cost-sharing, while maintaining lower premium structures designed for financial accessibility. Importantly, these plans offer comprehensive coverage designed specifically to protect consumers against serious illness or injury scenarios that could result in devastating medical expenses in an already unstable market. With a hardship exemption, eligible consumers can enroll in a catastrophic plan through HealthCare.gov.

How Americans can Apply

Beginning November 1, 2025, consumers can apply for the hardship exemption in two ways:

Apply online for Marketplace coverage on HealthCare.gov or through a certified partner. Household income will be reviewed as part of the application process.
Submit a hardship exemption form by mail.
HHS is also simplifying the process by streamlining the review of paper applications to reduce the administrative burden on consumers. This change will make it easier for individuals experiencing hardship and seeking a catastrophic plan to access the full range of catastrophic coverage options available to them.

HHS’ hardship exemption guidance for catastrophic coverage can be viewed on CMS.gov at: https://www.cms.gov/marketplace/resources/regulations-guidance -Insurance-Marketplaces

A fact sheet on HHS’ hardship exemption guidance for catastrophic coverage is available at: https://www.cms.gov/newsroom/fact-sheets/expanding-access-health-insurance-consumers-gain-access-catastrophic-health-insurance-plans-2026