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By Don Meyer
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Hospital executives cannot afford to ignore the revenue slipping through the cracks inside their own organizations. I have spent years helping hospitals identify and recover payments they were entitled to receive, and I have seen the same problem repeatedly: leaders often focus on external financial pressures while overlooking opportunities within their own reimbursement operations.
Yes, workforce shortages, rising costs and changing payer policies have created significant challenges, but those realities do not eliminate the responsibility to examine where money is being lost. Before asking policymakers, insurers or regulators to fix a difficult system, hospital leaders must first determine whether they are fully protecting the resources they have already earned.
America’s hospitals are facing a financial reality that grows more difficult with every passing year. Facilities are closing, workforce shortages continue to pressure operations, and reimbursement uncertainty has made long-term planning increasingly difficult for health care leaders.
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More than 100 rural hospitals have closed during the past decade, while hundreds of additional facilities remain vulnerable to closure. These losses represent communities losing access to emergency care, specialized services and essential medical support. The public conversation often focuses on government funding, reimbursement rates and insurance industry practices as the primary reasons behind these challenges. Those factors matter, but they do not tell the complete story.
Hospitals are operating inside a difficult system, yet too many leaders have accepted a level of financial vulnerability that deserves closer examination. Millions of dollars in earned revenue remain trapped within complicated reimbursement processes because organizations are hesitant to challenge longstanding practices, question payment accuracy or expose weaknesses within their own operations. A broken system creates obstacles, but leadership decisions determine whether those obstacles become permanent limitations.
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The health care industry has spent years discussing the need for transformation. Leaders have invested in new facilities, advanced technology, workforce initiatives and care delivery models designed for a changing patient population. Today’s hospitals were built around an older health care environment defined by different reimbursement structures, workforce availability and patterns of patient demand.
As care moves across virtual platforms, outpatient settings and digitally connected networks, hospitals must rethink how they operate. That transformation requires financial resources, and some of those resources are already available within the revenue hospitals have earned but have failed to fully recover.
The complexity of health care reimbursement did not happen by accident. Hospitals navigate numerous payer rules, changing requirements, contract interpretations and coding decisions that influence whether claims are paid correctly. Insurance companies have developed sophisticated systems for managing claims, yet many hospitals continue relying on internal processes that were created for a simpler era of health care administration. The result is an imbalance where the organizations responsible for delivering care often lack the same level of visibility into payment accuracy as the organizations responsible for issuing payments.
This situation deserves a difficult comparison. A business in any other industry would never accept a system where a customer decides how much money they owe after receiving a service and where the seller has a limited ability to verify the transaction. Health care has become accustomed to this arrangement because the relationships between providers and payers are complex, longstanding and politically sensitive. Hospital executives often fear creating tension with major insurance partners, even when millions of dollars may be involved.
That hesitation carries a high cost. Average initial denial rates in U.S. health care have continued to climb, reaching 12.6 percent in 2026, a level that now represents roughly 806 million denied claims each year and an estimated $262 billion in system‑wide financial impact.
Denials have increased annually since 2020, driven by rising payer‑policy complexity, persistent staffing attrition and expanded prior‑authorization requirements. The most common Claim Adjustment Reason Code (CARC) drivers remain CARC 197 (missing precertification), CARC 11 (diagnosis inconsistent with procedure) and CARC 16 (missing information), all of which are considered largely preventable with stronger front‑end accuracy and documentation discipline.
The challenge is not simply a lack of available technology or intelligence. Health care organizations are surrounded by data, analytics tools and emerging artificial intelligence capabilities. A 2026 report by Deloitte highlights the growing importance of AI and digital transformation as health care organizations seek greater efficiency and resilience. These technologies can provide valuable support, but they cannot replace the willingness of leadership teams to examine uncomfortable realities. A sophisticated tool is only effective when leaders are prepared to act on the information it provides.
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One of the greatest obstacles I have observed is the fear of discovery. When an external review uncovers millions in missed revenue, some managers worry that the finding reflects poorly on their performance. That mindset prevents organizations from recognizing the opportunity in front of them. Discovering lost revenue should be viewed as a demonstration of leadership and accountability. The strongest organizations are those willing to investigate, learn and improve.
This issue becomes even more urgent when considering the consequences beyond financial statements. Hospitals are making difficult decisions about staffing, community programs, service availability and capital investments. Financial pressure contributes to workforce challenges and limits the ability of health care systems to respond to growing demand. Rural hospitals may experience these pressures most visibly because smaller margins leave less room for error, but the challenge exists across the entire health care landscape.
I have seen the dedication of hospital teams who work tirelessly to serve their communities. I have watched organizations hold fundraising events, search for grants and stretch limited resources to maintain services that patients depend on. That commitment deserves recognition, but it also raises an important question: why should hospitals struggle to replace lost resources when some of those resources may already belong to them?
Health care leaders cannot wait for every external challenge to be resolved before taking action. The reimbursement system is complex, policies will continue to change and financial pressure will remain part of health care. The responsibility of leadership is to confront the challenges within reach and recover the resources already earned through the care hospitals provide.
Every CEO and CFO should be asking: have we done everything possible to identify and recover the revenue owed to us? The answer may reveal uncomfortable gaps, but those discoveries create opportunities to strengthen operations, support caregivers and protect access to care.
Hospital leaders, your payers are holding your money hostage, and it's time to stop accepting that lost revenue as an unavoidable consequence of a broken system. The money is already there. The question is whether you have the courage to find it and put it back to work for the patients and communities who depend on you.
Don Meyer is a health care executive specializing in hospital reimbursement strategy and revenue recovery. As CEO of Enterprise Cost Reduction, he works with hospitals to identify underpaid commercial insurance claims and improve financial performance through data-driven reimbursement analysis. His work focuses on helping health care organizations strengthen financial resilience so they can continue investing in patient care, workforce stability, technology and community health initiatives across an increasingly complex reimbursement environment.
The views expressed in this article are the writer’s own.
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