If you’re sitting in a hospital business office, staring at a $700 denial and a $7,500 denial, it makes sense to tackle the larger one first, with the smaller one relegated to the "Later" pile. Only in most hospital business offices, where teams are chronically understaffed, "Later" usually never comes. And many of the smaller denials go untouched.That would almost be okay if it were only the occasional $700 denial going ignored. But when it's $700 one day, $225 the next, and $185 after that, those denials add up.
AI gives payers the ability to deny claims at a volume that no lean business office can respond to. At least not without the same technology. Churning out denials at that rate doesn’t cost the payer anything. It’s a much different story for the hospital.
The AHA says hospitals spent $43 billion in 2025 trying to secure payments insurers already owed them. Nearly $18 billion of that went to just overturning denials.
And the team doing that work? The same report found that in 2024, the average hospital had about 64 people on the billing and administrative functions tied to denial management. That’s roughly 6.5% of total staff.
So that’s sixty-four people per hospital, trying to corral everything payers owe. Those odds aren’t great.
Here's what makes the whole scenario sting even more for hospitals and health systems. That same AHA report points to a Health Affairs analysis of Medicare Advantage claims, which found that plans denied about 17% of initial submissions and that 57% of those denials were eventually overturned.
The same study found that only 60% of denied claims were ever resubmitted. Of the ones that were, two-thirds got paid. So the denials that were addressed mostly got paid, but four out of ten never got that far. In a lean business office, those are the sacrifices that have to be made.
Most of the conversation about denials is around prevention. Of course, it’s useful to have that information going forward, but it doesn’t help with all the claims currently sitting in your “Later” pile. Those need someone working them yesterday.
Hiring more people seems like an obvious answer. Until you consider the shortage of experienced RCM professionals available, and how long the onboarding process is to get a new employee ready to take on denied claims. The backlog won’t wait.
Which means the capacity has to come from somewhere other than hiring full-time employees. Keep in mind this isn't a temporary surge to withstand, either. AI-powered denials are the new normal, and the volume isn't going to recede. Hiring your way out of it means carrying a lot more fixed overhead, which most hospitals can't afford.
Plus, the same shortage of hours that impacts denial management also affects the rest of the back office’s responsibilities. The longer A/R is allowed to age, the less likely it is to ever be collected. What business offices need is a way to handle heavier workloads without relying on hiring cycles.
That scenario entails experienced RCM people handling appeals and other judgment-intensive work, while AI handles the repetitive, high-volume work that lives on the rungs underneath. That combination lets hospitals get the best out of the staff they have and extend their office’s ability to get more done.
Capacity shouldn’t decide which claims get worked. Especially when the odds for successful appeals are so high.
Whether a hospital builds its own AI-plus-expertise setup internally or brings in a partner with a ready-now solution is a separate question. But more capacity is out there. Hospitals and health systems just have to find their best way to integrate it. And fast.
Meduit combines experienced RCM professionals, proven processes, and AI-driven tools to add capacity across the business office, fortifying the team already in place rather than replacing it. That’s what our Comprehensive Business Office is built to do.
Download our CBO brochure to learn more.