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Becker’s Healthcare Podcast
Driving Hospital Turnarounds and AI Strategy in Revenue Cycle with Sunitha Reddy
00:23:29
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- [00:00]
A
When it comes to today's rcm, we know the challenges, complexity of claims, talent shortages, low funding and lagging tech. That's why we built MedMetrics. We have the expertise and advanced tech to give you that edge on your revenue cycle. We're a partner who will relentlessly raise your yield. A partner who's on your side because they've been operator side who knows your battles and will make sure you win from start to finish, end to end. Medmetrics Be exceptional.
- [00:30]
B
This is Alan Condon, back with another episode of the Becker CFO and Revenue Cycle podcast. And today I'm thrilled to be joined by Sunitha Reddy, Chief Revenue Officer and Vice President of Operations at Prime Healthcare. Prime was founded in 2001 and has grown rapidly since then. One of the largest health systems in the country, it is both a for profit and nonprofit arm and now operating, I believe, 54 hospitals and more than 360 outpatient facilities across 15 different states. Sunita, an absolute pleasure to have you make your debut Becker's podcast appearance today. For those of our listeners on the podcast who mightn't be well acquainted with you, the fantastic work that you and your team do at Prime Healthcare. Do you mind sharing a little bit more about your role and your background at the health system?
- [01:20]
A
Sure. Alan, thank you for having me. It's great to be here. I always appreciate the opportunity to talk about the work we're doing at prime and brought broader trends shaping healthcare. As you mentioned, I serve as Chief Revenue Officer and Vice President of Operations for Prime Healthcare where I oversee end to end revenue cycle managed care strategy and operational performance across our 54 hospitals and more than 360 outpatient locations nationwide. And my background is in healthcare finance and policy. I earned my MBA from Harvard and a Master's in Public Health during the rollout of the Affordable Care act, which really shaped how I think about the intersection of health policy, finance and access to care. And prior to my role at Prime, I worked in healthcare banking and consulting focused on hospital financial performance and reimbursement. And I think that's what reinforced for me early on that financial sustainability and access to care are so deeply connected and when hospitals are under financial pressure, it directly impacts their ability to serve their communities. And at Prime Healthcare, our mission is centered around saving hospitals, delivering high quality care and improving access in underserved communities. And we view revenue cycle as a core strategic driver of that mission. So it's been incredibly meaningful to be part of that work.
- [02:48]
B
Yeah, no, absolutely. And excited to dive right in so obviously deep, deep experience, Sunita, in healthcare finance. From your experience in the banking sector, your MBA from Harvard, Master of Public Health and what we're going to be talking about today in terms of the revenue cycle finance operations at Prime Healthcare, there's so, so much we could go in this direction. So many, so much going on in terms of challenges, trends and whatnot. But if you could kind of break it down, what are kind of the two or three trends that you're paying most closest attention to today in healthcare?
- [03:20]
A
Yeah, there's a lot happening right now, but I guess I would highlight three major kind of interconnected trends. I think the first is the financial pressure facing hospitals today, especially community hospitals serving these vulnerable populations. Labor costs continue to rise. Medicare and Medicaid rates are not keeping up with the cost of inflation. And Recent legislation, including HR1 represents some of the most significant Medicaid funding reductions in decades. I think you kind of posted about it in your other articles, but the Congressional Budget Office estimates over 900 billion in Medicaid cuts over the next decade with millions potentially losing coverage. And that creates a real sustainability challenge, particularly for community hospitals, and just makes it increasingly difficult to operate without strong operational discipline and the ability to operate at scale honestly. And I think second is just the growing complexity in payer behavior. Denials have become one of the most significant operational and financial headwinds we see today. Health plans are becoming increasingly aggressive, whether that's through prior authorization denials or level of care downgrades and retrospective reviews and truly just finding more ways to delay, deny or underpay claims. And you know, Recent data from CMS and OIG show that initial denial rates are around 20% for Medicare Advantage and even up to 40% for some managed Medicaid plans. What's especially concerning is that a majority of patients never appeal these denials due to the complexity or lack of resources. And this is just creating significant administrative burden on providers and putting real pressure on hospital financial sustainability. Then I guess the third trend which everyone's talking about is really just automation and the acceleration of AI in healthcare. I think this is being largely driven by both labor constraints and the general need for greater efficiency in healthcare. There truly is a real opportunity to automate repetitive workflows, improve accuracy and proactively manage denials. But at prime we're really focused on using these tools to reduce administrative burden on clinicians. Whether that's, you know, helping with prior authorizations or appeals or documentation, but you know, with the focus so that they can really, you know, focus on patient care. And I think when you step back, you know, all of these trends reinforce that revenue cycle is no longer just a financial function. It's central to ensuring access to care and the sustainability of the healthcare system.
- [06:15]
B
Yeah, I think fantastic. I think really breakdown so eloquently put. And obviously those three trends that you mentioned do tie so closely into one another in terms of the financial pressure facing hospitals, specifically community hospitals like you mentioned. No doubt eyes transfixed on some of those Medicaid reductions coming down the pipeline end of this year. Indeed into next denials like we hear from so many leaders like yourself. It's just such a challenging environment. And then automation acceleration of AI in healthcare, which I'd love to kind of touch on a little bit more down the line. But quick follow up, Sunita, in relation to the first trend you'd mentioned in terms of no secret to you, myself and many of our listeners at Beckers, in terms of that financial pressure facing hospitals, I believe the latest we've seen from Kaufman hall is around about one third of nonprofit hospitals continue to operate in the red. Certainly big challenges coming down the pipeline like you said, in terms of Medicaid funding cuts. I know a big part of Prime's strategy is indeed to acquire partner with some of these community hospitals. Could you maybe put together the benefits that community hospitals see with a large health system or financial partner like a Prime Healthcare in terms of combating some of those pressures and trends that you just touched on?
- [07:30]
A
Sure, yeah. And I can kind of maybe speak to a little bit more about just prime and revenue cycle as it relates to these kind of turnarounds. So at prime, our mission is centered around saving hospitals and ensuring continued access to care, particularly in these underserved communities that are so impacted. And many of the hospitals we acquire are financially distressed. So our focus is on stabilizing them quickly while maintaining high quality care. I think one of the key differentiators at prime is just how we view revenue cycle. It's truly not a back office function. It's a core transformational engine that helps drive hospital sustainability. I think that mindset shapes how we operate every day, particularly as we continue to grow through acquisitions and scale best practices across the system. I think our approach at prime starts with the true end to end view where we're not just focused on billing and collections, we're looking across the revenue cycle continuum. So patient access, utilization management, appropriate clinical documentation, coding, revenue integrity denial management and managed care. And you know, all of those functions kind of come together and are looked at Collectively and holistically and importantly, we manage all of these functions in house, which is kind of unique and it creates strong alignment between operations and financial performance. And we also have really strong corporate teams that are able to support these functions at scale. I think, you know, kind of the second piece is really the speed and standardization at Prime. So the majority of our system 34 hospitals now are on Epic and we built a defined revenue cycle playbook for these new acquisitions. And so that allows us to quickly implement standardized workflows and reporting, especially in those kind of critical first six to 12 months after an acquisition. And we've also come a long way in just standardizing our revenue cycle management technologies and vendors so we can implement these tools and vendors and scale efficiently. I think the third, and I think this is really unique to prime is our clinical alignment. We're a physician founded and physician led organization and our clinical leaders are actively engaged in revenue cycle operations, denial management and care delivery decisions. That alignment improves both quality and financial outcomes honestly for the organization. Another key focus is managed care. Most of the hospitals we acquire have challenging payer mixes, you know, mostly Medicare and Medicaid. So ensuring appropriate reimbursement is critical. And we take a data driven approach to evaluating contracts to ensure those rates are sustainable, competitive and aligned with the cost of care. You know, often when you first acquire these hospitals, the issue isn't just operations, it's that reimbursement from managed care hasn't kept up with the true cost of care. And then I'd say, you know, finally we're really data driven and monitor performance rigorously. We track metrics like denials, cash collections, underpayments very closely. And I think that makes prime unique in that revenue cycle is a shared responsibility across leadership. It's not siloed within one department and it's not fully outsourced. So I think that level of integration and accountability across operations, clinical teams and revenue cycle leadership is a key differentiator for prime and has been so critical to executing turnaround strategies at scale. So I think when you put it all together, it's really about standardization, alignment and defined operating playbook that allows us to kind of stabilize these hospitals at scale.
- [11:23]
B
Yeah, it kind of aligns what I've heard exactly from your colleague Steve Aleman, cfo, of course, of Prime Healthcare recently and obviously Brian, to your point, has acquired multiple hospitals recently, expanded into Illinois, expanded into Maine. You talk quite a bit about what really differentiates Prime. Prime's revenue cycle playbook there in terms of integrating some of these Financially distressed hospitals. We're seeing a ton of growth, M and A across the, across the spectrum at the moment, I guess. Is there anything in terms of lessons learned or a kind of key takeaway for your peers at other health systems who are looking to acquire and integrate some of these hospitals into their own systems? From a revenue cycle standpoint, what's the kind of key lesson that you might have learned through some of these previous acquisitions?
- [12:10]
A
Yeah, you know, I think one of the key lessons is just we've been through this now with 38 hospitals, with these three upcoming hospital acquisitions in Maine. And I think, honestly, truly at prime, we believe, like, healthcare is local and we really try. There is no. I talked about all of these different levers I think that we focus on when we do some of these transitions. But, you know, really, I think what makes prime unique is that we really look at each hospital individually, we assess the market, we kind of figure out what are the key service lines that are needed. We try to do the same thing on the revenue cycle side to really make sure that we're kind of supporting, you know, supporting the teams that are there, supporting the operating model. And there's no really one size fits all kind of revenue cycle solution that we implement. We really work with the teams, we work with the communities, we work with the hospital leadership and kind of figure out how to best support them kind of financially and operationally.
- [13:10]
B
Yeah, it's such a interesting, unique kind of playbook that prime has ton of growth. Like I said, physician founded, physician led. Now, I believe, 13 different states, 54 hospitals. But Sunita, the conversation that we're always going to get to in this, you touched on it earlier in terms of the trends that you're following. Of course, it wouldn't be a CFO revenue cycle podcast without coming to AI. So I'm so, so curious to get, kind of get your thoughts, your expertise in terms of what you're seeing, in terms of this, for lack of a better term, AI arms race we're seeing evolving in the coming years as AI becomes more deeply sophisticated, more deeply integrated into the revenue cycle by both payers and indeed providers. How do you see this again? AI arms race really evolving in the coming years as this technology becomes more sophisticated.
- [14:01]
A
Yeah, that's a great question, Alan. And I, and I do think arms race is a fair way to describe it. You know, we're really seeing both payers and providers invest so heavily in AI, but it seems like with very different objectives, right? Like payers are using AI to scale claims review they're, you know, automating denials and there's payment scrutiny at much higher speed and volume. And you know, providers on the other hand, I think are using AI to improve accuracy and efficiency, particularly in areas like documentation coding and denial prevention, to, you know, really push to ensure appropriate reimbursement. So I think, you know, as payers become more automated in their processes and I think they're a little ahead in this process, we're just seeing increased volume and speed of denials, which is creating, you know, additional pressure on providers to, you know, implement this technology and kind of catch up. And so I think that, you know, that's happening. I think another thing that we're seeing is just the potential shift towards a more predictive and eventually more autonomous revenue cycle. So you know, we're instead of reacting to issues after the fact, we can, you know, try to identify documentation gaps up front, you know, predict denial risk before submission, you know, resolve authorization issues earlier. But you know, I think that being said, there's still a long way to go for providers to kind of seemingly seamlessly adopt these tools. I think AI in healthcare is not plug and play. It requires thoughtful integration, strong operational teams and ongoing governance, especially. Right. With all the new introduction around agentic AI. So at prime we're really focused on using AI to kind of support our teams, not replace them, and ensuring we have the appropriate oversight and accuracy and compliance, especially on the patient facing side. So looking ahead, I believe success will come down to kind of three major things. The first is how well AI is integrated into workflows across the end to end revenue cycle. Second, how are organizations adapting their operating models to introduce and implement AI? Because this is as much about people and processes as it is about technology. And then the third is just around governance and accountability because ultimately it's not just about efficiency, it's about access to care and trust in the system. So I'd say AI is accelerating the revenue cycle and definitely has potential to reshape it, but it really has to be implemented thoughtfully and to truly deliver on that.
- [16:43]
B
Promise a lot there to unpack, I guess. Is there something that you're most excited about when you think about AI and automation? The revenue cycle, or maybe a specific initiative that hasn't isn't here yet, but you're working on a prime, whether that's in the area of agentic AI, automation or anything else that you'd like to highlight?
- [17:03]
A
Yeah, you know, I think at prime we're really looking at, you know, where are all the opportunities that we can kind of implement AI in the process. And you know, I think it's kind of taken part at least in the revenue cycle side, you know, mostly in phases. I think the first is kind of, you know, how do we integrate, how do we integrate some more of these, you know, RPA or robotic process automation opportunities? Right. To take some of that manual work and more kind of transactional kind of areas. And, and then, you know, I think now we're really thinking, you know, where are ways that we can kind of better integrate it into the system. And so it, you know, kind of all ties back to, you know, where, where areas that we can more seamlessly implement and integrate these kind of AI solutions throughout the RCM continuum.
- [17:51]
B
Yeah, got it. Certainly seeing where AI was maybe a year, two, three years ago and then seeing where it might be one, two, three years ahead, certainly exciting a lot of challenges, but indeed a lot of great opportunities there as well. Sunita, last question for you before I let you go. It's something you kind of touched on a little bit earlier in terms of the revenue cycle workforce and Deep prime. And youself have said using AI, using automation, things like RPA to support your team, support your workforce, not replace them. With that in mind, I guess, how are you seeing revenue cycle teams evolve as AI does, become more embedded in their workflows and then what skills do you see is really defining that next generation of revenue leaders?
- [18:33]
A
Sure. You know, I think we're already seeing a meaningful shift, honestly, in how revenue cycle teams operate. You know, historically, as I mentioned, the work's been very transactional. Right. Focused on billing and collections. But as automation and RPA take on more of that work, I think the function is becoming much more analytic and strategic. So teams are now focused on understanding what's really driving performance is it denials, payer behavior, documentation and addressing those issues more proactively. And so at Prime, I think this is showing up in a few ways. I think first is a stronger focus on data driven decision making. So using data to drive action, not just reporting. I think the second is just a deeper alignment and understanding and integration with clinical teams since documentation and care delivery directly impact revenue cycle performance. And third, I think is the growing importance of technology leadership. So I think what that means is just really understanding how to evaluate and implement tools like AI in a way that actually improves outcomes. So I believe that that that shift in kind of the use of AI is really just driving a different skill set for leaders and all of that is kind of evolving. So I think you need data literacy, cross functional leadership and adaptability because this environment is changing so quickly.
- [20:02]
B
Yeah. Fascinating to kind of hear your perspective there. I did tell a lie. I said it was the last question, but curiosity has gotten the better of me. I just have one quick last follow up. Sunita, I'm wondering if you could expand on it. I thought it was so, so fascinating in terms of how your teams are evolving. Be more analytical, be more strategic. You talked about how you're now more proactively addressing some of these denials upstream. Can you maybe expand on that for our listeners in terms of how that shows up in practice and kind of some of the early wins you might be seeing there?
- [20:32]
A
Sure. You know, I think, you know, there's a couple of examples that we can kind of speak to. But you know, I think now, you know, we're being, we're able to kind of leverage all of these different tools and technology to kind of pull in, you know, denial patterns and trends and identify, you know, what's going on as it relates to kind of these underpayments. And so we've been able to kind of pull this data in a more seamless way. I think now we're kind of shifting towards, okay, we have this data now. How do we, you know, the next generation of, you know, revenue cycle leaders is now expected to kind of take that data and, and move forward with it. Right. How do we implement, how do we implement best practices? How do we kind of work to, you know, implement workflows around kind of the data so, you know, that that's happening. I think we're also kind of able to kind of leverage some of these tools and functions to, as I mentioned, better assist our appeals teams. Right. So, you know, how are we kind of pulling together kind of essential data into our appeals to make sure that we're capturing kind of the core content of kind of the medical necessity aspects and trying to use that to, you know, make sure that we're, you know, more successful in our, in our appeals and escalation. So I think we're really, you know, taking a comprehensive view and figuring out where are the best places we can, you know, integrate AI into our workflows. And you know, as I mentioned, I think we still have providers in general have, you know, ways to go to kind of implement this to be kind of a seamless end to end solution. But I think again, from the prime side, we're really focused on supporting our revenue cycle decision makers, supporting our clinicians in their daily workflows and trying to take out some of the administrative burden that's kind of embedded within kind of revenue cycle and operational workflows.
- [22:21]
B
Yeah, no, fascinating. I think so. So great. Greatly appreciate you curiosity got the better. We had to ask a follow up question but I appreciate the level of specificity and breaking it down in such layman's terms for me as well. Sunita, an absolute pleasure. Thank you so so much for being a part of the Becker CFO and Revenue cyc. Fantastic leadership there surrounding you and you indeed yourself. Thank you so much and we look forward to catching up with you again down the line.
- [22:47]
A
Yeah, thank you again for having me. It's been truly a pleasure speaking with you and sharing more about all the exciting things and work happening at Prime. I really appreciate the opportunity. Thank you so much. Alan. When it comes to today's rcm, we know the challenges. Complexity of claims, talent shortages, low funding and lagging tech. That's why we built MedMetrics. We have the expertise and advanced tech to give you that edge on your revenue cycle. We're a partner who will relentlessly raise your yield. A partner who's on your side because they've been operator side who knows your battles and will make sure you win from start to finish, end to end. Medmetrics be exceptional.