As ambulatory surgery centers (ASCs) enter the second half of 2025, they are dealing with a fast-changing revenue cycle environment.
From rising denial rates to tighter payer scrutiny and mounting staffing pressures, the financial terrain has grown increasingly volatile, Patricia Smith, director at Dallas-based revenue cycle management services company SYNERGEN Health, told ASC News.
The explosion in denied claims can partly be attributed to the increasing use of artificial intelligence by payers, according to Smith, who has years of experience working in the ASC industry on the operator side as well.
“They have the benefit of having all the data, and so they’re using AI to detect discrepancies and deny the claims faster,” she said. “We’re seeing denials faster than we’ve ever seen before.”
Unlike in the past, when payer policies evolved slowly, Smith said updates now happen in real time – and sometimes without notice.
“They have peer updates that go out regularly,” she said. “That’s like, ‘Oh, we’re changing the rules today.’ So it’s this constant moving target.”
The result is that ASCs are being left behind with limited resources and strained staff. Yet Smith warned that denied claims should not be seen as mere administrative hurdles.
“Denied claims are not so much a back-office headache,” she said. “It’s really a sign of something off in your revenue cycle.”
Whether it’s a process breakdown, a mismatch in data, or insufficient tracking, denial trends often point to deeper systemic issues, she said. And worryingly, many ASCs still don’t track their denial rates at all, she added.
“You’d be surprised how few track their denials,” she said. “And ultimately, you can’t fix what you don’t track.”
Aging A/R and its impact on growth
Rising accounts receivable (A/R) can have cascading effects on ASC growth, especially in facilities with physician investors, she said.
“When you grow your AR and you don’t have that nice, steady cash flow, you’re kind of taking a double hit,” she said.
Not only are physician-owners missing expected distributions, but they are also being asked to fund new equipment or service lines out of pocket.
Cash delays can also lead to permanent losses.
“You can lose revenue because of timely filing deadlines, bad debt,” she said. “When you see that AR grows, your choices shrink.”
Yet revenue losses aren’t confined to one point in the revenue cycle. They show up everywhere, Smith said.
On the front end, demographic errors and missing prior authorizations can doom a claim before it’s even submitted. In the middle, coding errors driven by incomplete op notes or incorrect CPT modifiers can lower reimbursement rates. On the back end, weak denial management processes often mean that ASCs don’t get paid at all.
“You really have to have solid processes in place at all three [points] to ensure that you’re not letting revenue escape,” she said.
Still, by automating more error-prone tasks like benefit verification and denial routing, ASCs can reallocate staff to more valuable work, she added.
“We see a 20% to 40% drop in denials from the front end, claims with 30% to 50% faster cycle times, and 5% to 25% reductions in labor costs,” she said.
Data as leverage
As payer dynamics evolve, the most important thing an ASC can bring to the negotiating table is hard data, Smith said, including knowing case volumes by CPTs, revenue and implant costs.
“You need to know net revenue comparisons,” she said. “The data is going to get you into conversations that you could not have without it.”
She also advised ASC leaders to highlight their efficiencies.
“Everyone knows that an ASC is about a third the cost of the hospital,” she said. “But when you go to sit at that negotiation table, they’re going to pretend they don’t know that.”
And at the heart of everything is RCM resilience, which means the ability to not just respond to denials, but prevent them, she said.
“Those ASCs that manage their denials and treat them as a financial business metric instead of just a billing headache are going to perform much better,” Smith said.
That starts with operators knowing their KPIs: days in A/R, percent of A/R over 90 days, clean-claim rates and denial rates. But it also requires bringing everyone into the process, including schedulers and surgeons, Smith said.
“Share those denials with surgeons and schedulers,” she said. “So it’s not just one person in the back office doing collection follow-up.”
