← Becker’s Healthcare Podcast
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- [00:00]
A
This is Alan Condon with the Beckers CFO and Revenue Cycle Podcast. And today I'm delighted to be joined by Stephen Rinaldi, Senior Vice President and Chief revenue officer of UNC Health. That's a nonprofit system with 16 hospitals across 20 campuses in North Carolina. Steven, a real pleasure to have you on the podcast with us today. For those listeners who mightn't be as well acquainted with yourself and the role that you do at UNC Health, you want to give us a little bit more information about your background and your experience?
- [00:32]
B
Oh, sure, I'd be happy to. And thank you so much for giving me the opportunity to meet with you today. So, as you mentioned, I'm the Chief Revenue Officer for UNC Health. We are a $12 billion health care system spanning North Carolina from the mountains to the coast, with our headquarters in Chapel Hill. In my role, I'm responsible for our managed care program reimbursements, and that includes our supplemental programs, net revenue recognition, cost reporting, things of that nature, and then end to end revenue cycle for both professional and hospital operations. I've been with UNC since 2014. I joined the system as a CFO at one of our entities and served previously as a CFO when I was working in New York State. Later moved into corporate finance and have been really thrilled by the opportunity to help build out and sustain our revenue strategy and some of our financial operations at the health care system level. I'm an accountant by trade, so I tend to approach healthcare finance broadly and from that lens, if you will.
- [01:48]
A
Yeah, fantastic and excited to have you on and pick your brains a little bit. Like you said, $12 billion health system, fantastic academic system in UNC Health. 16 hospitals, course headquarter in Chapel Hill. I know you know the system very well from the inside and out at this stage. 11 years at UNC Health, most recently serving in that Chief Revenue Officer role. So, Stephen, I guess the first question I have for you, so much going on a very challenging time in healthcare as we know. What are the two or three trends that you're paying most closest attention to in your seat as Chief Revenue Officer at UNC Health today?
- [02:24]
B
I think the trends that are most front of mind for us are, I think, can be separated into a couple different categories. One would be market headwinds. We continue to see some substantial pressure from our payers across the landscape as they respond to cost and inflationary pressures in the market as well as we do. That includes some of the pressure from OB3 and from some of the related legislation. Secondly would be Challenges that we see with sustaining and assuring an adequate workforce to meet the needs of clinical care delivery as well as sustained administrative functions over the next several, several years. And thirdly would be the excitement around tech enablement and the adoption and implementation of both sort of augmented and agentic AI across our operations.
- [03:26]
A
So certainly market headwinds across the board, some payer pressure related to denials, whatnot, we're seeing in terms of payers and funding. So some of Those ubiquitous challenges, OB3 and related legislation like you had, like you'd notice as well, workforce challenges across the board and tech enablement. I'd love to kind of just dive one bit deeper into the first trend that you mentioned around market headwinds. No doubt. We just received word of policy level. Okay, we're out of the federal shutdown now. There's going to be a vote on the ACA subsidy sometime. We gather in December. But we do know definitively 2027, late 2026 in terms of Medicaid costs coming down the pipeline, a lot still up in the air in relation to ACA subsidies. I'm wondering if you could maybe dive one bit deeper into kind of how you and the financial leaders at UNC Health are thinking about 2026 and beyond as of right now in terms of what we know coming down the pipeline in terms of Medicaid and whatnot, and then also still a bit of in limbo in terms of what we. What we might know in terms of the ACA subsidies next year.
- [04:31]
B
Yeah. So I think. Great question. I think that those headwinds are front of mind for a lot of finance leaders right now. From our perspective, payer strategy and market strategy are probably at the top of that list in different ways. With Medicaid, the pressure from the Federal Government and OB3 that will reduce supplemental payments represents a particular concern. Ourselves and other entities are particularly dependent upon those supplemental programs to invest appropriately in people, process and technology and within the communities. So that represents a challenge that we have a couple strategies to address that. In addition, as you know, Medicaid expansion is part of that dialogue. And so some of the confirmation workflows around proof of employment and RE enrollment are areas from a Medicaid perspective that we need to lean in. So with that, the first one would be partnering and trying to connect with the state around the best way to assure that the patient population we serve are compliant and participating in the revalidation processes necessary under the new Medicaid rules so that they are not losing their access to care. And of course we're not losing a reimbursement source. Lots of data points to the loss of health insurance or access as obviously being negative to socio determinants of health and health equity. So we want to be cautious to make sure that we're continuing to support that population. We do that with financial navigators and with technology and outreach during scheduling and immediately following. On the ACA side, certainly a reduction in subsidy and an increase in premiums for our patients that are in ACA plans represents a concern twofold. One possibility of more participants in those plans stepping away from insurance due to affordability and moving into the ranks of the uninsured. Again, that could have some substantial impacts both in their health and in our ability to sustain serving them in the way and the best way possible. Secondarily, the increased cost of their premiums will put pressure on their ability to satisfy their out of pocket liabilities, deductibles, coinsurance, co payments, things like that, that are a critical component of those plans. So one of our big concerns is that the number of insured will decline and for the portion that remain insured, it'll actually result in them presenting more as if they're underinsured due to those financial limitations. Again, what we're trying to do in that space is be proactive with supporting them with payment plans with estimates from a revenue cycle team perspective and connecting them with our financial assistance programs so that we can assure that we're continuing to serve that important portion of the community as we sort of work through that change.
- [07:51]
A
Yeah, no, it's certainly interesting to hear your perspective, how you're proactively addressing some of these challenges on the insurance side for your patient population. And Stephen, I'm wondering if you could just maybe share a little bit of insight into that other trend that you mentioned in terms of market headwinds on the payer side, in terms of payer pressure. We know denials have been through the roof across the board in recent quarters. Really big burdens in terms of prior authorization or whatnot as payers begin to use AI in their coding and revenue cycle whatnot more and more we now at a point, it seems like, where providers are now playing a little bit of catch up in terms of automation, AI agents and the rev cycle, pushing back against some of these ubiquitous challenges we see on the commercial payer side. Is there anything that UNC Health has found particularly effective, maybe from a strategic standpoint, in terms of protecting your financial performance in the current, in the current age?
- [08:51]
B
Yeah, that's a great question. Certainly lots of headwinds in that area. We have a couple strategies that we are deploying. So at the highest level, denials certainly continues to be a challenge. And to your point, we're seeing a number of payer partners across the country, major payers and even those that are less often in the media deploy technology to deny claims or to create administrative burdens that extend the timeline and the effort necessary to collect reimbursement. As we take a look at that from a provider perspective, it feels quite intentional. Whether or not it is subject to debate. What we're trying to do there is appeal as much as possible, work as much through our analytics process on our authorization procedures and then to increase and automate the volume and the quality of our denials and appeals. We, while we work with the payers through our contracts to work toward negotiating a better protections for the healthcare system to achieve the yield and, or the rates that we negotiated when we set out those contracts.
- [10:13]
A
Yeah. So Stephen, the big question I have top of mind when I think about AI in the revenue cycle. No doubt payers have been using it for quite some time, providers playing catch up as AI becomes more integrated into the revenue cycle. In this arms race, for lack of a better term, how do you see that evolving in this push pull dynamic with payers and providers over the coming years?
- [10:37]
B
Yeah, that's a great question. So spending a lot of time in this space, I think it's, it's one of the most exciting opportunities that we have. You've probably seen some statistics, Lord knows there's, there's lots of them out there. But from an AI adoption perspective, the adoption curve that we're seeing is, is so much steeper than almost anything in history. Certainly more steep than the adoption of the iPhone, for example, which, which surprised everyone. And I think that when we step back and look at this, the question I always like to ask is how many of your friends or colleagues were talking about or using a chat, GPT, a grok copilot or some similar technology either at work or personally six months ago. And you'll find that if you look back, you think, geez, you know, no one was really talking about it. So I think the curve is really high. And if we think about it, I would say that early on, you know, the techies, the visionaries were leaning into that back in 2022, 2023, sort of that early adopter phase. I think we've now moved through the maturity portion of the curve of what I would call the pragmatists in the early majority adoption cycle, I think that that's about where we are. And so I think we have a lot of additional growth and opportunity to learn in this space. So while we're doing that in health care, that's a really critical thing because there's two parts to this. One is technology that we develop ourselves in house around large language models and machine learning. We've got a wonderful ISD team that, that's doing a lot of that work. But we're also partnering with a number of vendor partners in this space. And when we look at them, they're all at various stages of being fully market ready, in various stages of product development as they work to leverage the technology as well as scale. And so I think that because it's early in the process, we're learning a lot. We're learning how we have to leverage these models and assure that we're protecting health information within a secure environment. We're learning how to escalate and build these models to align with our human in the loop expectations of our operation. And it's enabling us to do a couple things. One, you get a good look at some aspects of your operation that maybe have been on autopilot and it gives you a chance to improve those areas, retool things, add some additional controls, and then secondarily it enables you to handle a whole lot of volume at a pace that you couldn't handle previously. Denials is a great example. When we appeal an inpatient denial, our success rate is close to 70%. But because the process is so onerous and time consuming, it's very difficult to appeal more than 20% through our physician advisor and our denial management program. So leveraging technology will be able to appeal closer to 100% of those. And so you only need a modest increase in volume and certainly at the same win rate to shift the table. So over the next several years, I think we're going to see a great increase in the leverage of technology in that space. Authorization denials, estimation from a revenue cycle perspective. At the same time, I see the payers building their technological solutions to protect their business model and in some ways to combat, if you will, what we're trying to do. So I don't know if it's, you know, the clone wars or the bot wars that will happen overnight, but at some point these models are all training each other. So I think we're going to learn a lot over the next couple years. And your guess is as good as mine as to, as to, as to where we'll land.
- [14:38]
A
Yeah, no it's fascinating to get your perspective and to your point, just how deeply embedded AI has become not just in healthcare healthcare, but really across the board over the last six 12, 18 months. So kind of curious, excited to hear what's coming down the pipeline, but kind of interesting thoughts there, Stephen. We talked quite a little bit about the challenges there. That's one area, no doubt of excitement for providers, but also we see some challenges of pears too. What do you think about the future of UNC Health in particular? Is there one area that you're particularly excited about, whether it be on the tech enablement side or something else?
- [15:12]
B
A couple of things I'm really excited about. Certainly on the tech enablement side, in addition to implementing the technology and revenue cycle, we're implementing technology to support our providers in terms of using solutions for ambient listening to help complete documentation during office visits, of course with patient consent. And we're at getting clinical decision supportive tools built on our platform in EPIC to help increase and prompt ideas around data and data aggregation. We think about the electronic medical record as being electronic, but there's still a fair portion of material that is scanned into or paper that ends up as part of the medical record. And some of this technology will help collect the information that is in those sources as well as the information that is in the electronic record and help create a profile to help our providers. So definitely excited about that. Really excited about our ability to see what that technology will do. One of the very important goals of UNC Health is to be an international and national leader in research and in our academic mission. And so I think we're going to see some exciting use of that technology in that space, maybe helping us get to clinical therapies or drug development or other insights quicker based on the ability to process a lot of information and work through variables and Monte Carlo analyses, if you will. I think that's going to be great to supplement the outstanding minds that we have at the School of Medicine and in our university program and in our provider group that are engaged in research. I don't think that that's unique for unc. I think that that would be a wonderful thing for all R and D academic institutions in this space, which I think will be great for society. Another thing that we're really excited about is we're building a three plus billion dollar children's hospital here in the Research Triangle, which is the Raleigh, Durham, Chapel Hill area. We're partnering with Duke Health on this project to build the first standalone children's hospital in the state of North Carolina, which I think is going to be wonderful for the community and really represents a great opportunity for everyone that cares about that service line and children to come together and do something wonderful for the state, not just for today, but for generations to come.
- [17:42]
A
Yeah, no, fantastic. I know. We recently covered the news on Becker's as well. The three billion dollar children's hospital in partnership with Juve Held, which kind of ties nicely into our last question for you, Steven. I know that's obviously one huge key area of growth for UNC Health, but how else are you looking at growing across the health system? Is there potential opportunities for M and A? Is it expanding, growing service lines? Obviously, the children's hospital is a huge initiative. But anything else you'd like to highlight there in terms of what's coming down the pipeline over the next 12 months or so?
- [18:13]
B
Yeah, absolutely. I think one of the things that's really exciting and helpful about North Carolina is what we're seeing from a population perspective. When we go back and we think about where we were Since 2020, our population has grown by 7.5%, which is really substantially the result of net in migration of folks moving into the state as opposed to births. As a result, we're really working to expand our care model, doing that in a couple of ways. One, adding and connecting with independent physicians across the community to be part of our independent network. Through the work that we're doing in the Health alliance, identifying areas and communities that need specialty practice and then also the construction of additional new hospitals. We are building another standalone hospital here in the Triangle, which would be a typical adult and acute care facility. We've recently applied for a con to work to build a hospital in the western part of the state. And in so doing, we're really trying to meet the population growth and the community needs in the areas, you know, that we are both operating in and where the growth is occurring. So I think that that's really important from a growth perspective when we look at our delivery model across the state. At some point, the conversation of rural health strategy needs to come into the discussion. North Carolina, like many states, is distinctly rural and we're working with the state and other partners to develop the best strategies and programs to address care needs that are present across our state and rural communities. Really excited about that work and how we approach that.
- [20:10]
A
Yeah, fantastic. So greatly appreciate you taking the time to kind of let me pick your brains a little bit of what's going on in the revenue cycle. Kind of some interesting growth opportunities coming down the pipeline for UNC Health such an interesting market and state in North Carolina as well. Stephen, thank you so much for taking the time to be a part of our Becker CFO and Revenue Cycle podcast. We really appreciate it.
- [20:29]
B
Well, thank you. Appreciate the opportunity to celebrate the things that UNC Health is working on and the tremendous work of many in our community to bring health and well being to our communities.