Nashville, Tenn.-based HCA Healthcare is seeing rising denials and underpayments, but efforts to strengthen its revenue cycle are helping mitigate the effects, CFO Mike Marks said.
Mr. Marks said that the denials and underpayments are occurring “pretty broadly across payer and across products” but singled out Medicare Advantage as a “specific driver within the product mix.”
Over the past several years, HCA has added resources, technologies and other capabilities to “really go after the root cause of the denials.”
Mr. Marks said the system’s work in recoveries, dispute resolution and appeals was able to mitigate the effects of the increased denials and underpayments HCA is seeing, and it did not see a significant year-over-year effect on earnings.
“But the denials and underpayments are still really high and so it’s a key part of our industry to continue to work together on,” he said. “We launched, over the last 18 months, a series of partnerships with many of our strategic payer partners.
“These partnerships really focus on digital integration to try to share more digital and structured data back and forth between us and our payers, eliminate faxes, eliminate paper. [There has been] a lot of work around administrative simplifications for both us and our payers to deal with the really significant administrative cost burdens that are associated with healthcare in America.”
HCA reported an operating income of $2.29 billion (12% operating margin) in the first quarter of 2026, down from $2.33 billion (12.7% margin) during the same period last year. The system saw a 42% decrease year over year in respiratory-related admissions and a 32% decrease in respiratory-related emergency room visits. A winter storm in January also negatively affected volumes in certain markets for the three months ended March 31.
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