2026: The year for sunsetting old guard revenue cycle metrics

For decades, healthcare financial leaders have leaned on the same tired revenue cycle metrics: days in A/R, net collection rate, clean claim pass rate. While these metrics can provide a surface-level view of financial health, the big question is: what have they done for your operational margin lately?

Scaling operations is imperative for providers within the current economic climate, but when it comes to moving the needle on margin, many financial leaders are finding that traditional workflows and benchmarking are not rising to the challenge. The reason? Healthcare organizations still rely on labor heavy processes and metrics that are lagging indicators. The model is broken. We can’t keep throwing people at problems and hoping margin magically improves.

Macro-economic pressures are only intensifying as reimbursements continue to shrink, operational costs keep rising, and staffing shortages aren’t going away. Meanwhile the industry is bracing for the dual shock of Medicaid cuts and higher ACA premiums. Rural health is in especially dire shape with over 30% of rural hospitals now at risk of closure.

So, if we think that legacy revenue cycle metrics are going to carry us through 2026, we’re fooling ourselves. New challenges require new operating models. Below are four tactics financial leaders must embrace to build a sustainable, margin-positive future.

1. Embrace new benchmarking models focused on labor effectiveness

There’s a massive margin opportunity hiding in plain sight: administrative waste, which represents nearly a third of all healthcare waste.

Yet most organizations have zero visibility into how effectively staff are converting work effort into actual dollars. Until financial leaders can quantify the number of human touches required to collect a dollar, they can't measure the true cost, or opportunity, inside their revenue cycle.

A recent analysis of millions of human touches within MedEvolve’s database related to insurance claim collections found that 62% of revenue cycle touches are wasted, and 40% of denials result from pre-registration breakdowns. That’s not a workforce problem; it’s a process problem. And process problems can be fixed.

Benchmarking must evolve to focus on labor effectiveness to speed reimbursement and financial health. Some key targets include:

• >85% Zero Touch Rate—payments that received no human intervention
• <15% Avoidable Touches—actions that did not produce a financial outcome
• <10% of Touches for Denials—efforts to overturn a denial and get payment, including claims issues like pre-authorization, benefits and eligibility and coding
• >90% First Touch Payment Rate— when staff must intervene, payment is received after the first touch

These leading indicators help leaders identify where breakdowns are occurring by identifying root causes of revenue cycle hangups before the financial impact.

2. Use AI and automation where they actually drive ROI

Of all the administrative areas in healthcare where AI and automation are expected to have an impact, revenue cycle ranks high. The key is identifying and deploying solutions that will deliver the greatest ROI.

The reality is that the market is flooded with shiny new tools to improve financial performance. However, moving towards a benchmarking model built on labor effectiveness requires automation that tracks every “human touch” behind a claim and drills down into that data to uncover performance improvement opportunities. EHRs and practice management systems alone are not built for this.

Workforce automation and AI can not only deliver this kind of labor intelligence, but the right solution can also guide staff to daily activity that will speed revenue cycle and produce the greatest ROI.

3. Prioritize upstream fixes; especially in pre-registration

With 40% of denials originating before the patient even walks into the clinic or hospital, pre-registration is the single biggest choke point in revenue cycle performance.

Pre-registration accuracy has become even more critical as payers increasingly deploy bots to deny claims at scale. They simply look for errors such as eligibility gaps, missing authorizations, inaccurate demographics and deny claims instantly.

In effect, providers are competing against automated denial engines with manual processes. It’s a losing battle. If providers don’t automate financial clearance upstream, they are guaranteeing downstream denials, rework, and wasted labor.

Automation and AI that validate eligibility, benefits, authorization, and accuracy before the visit reduce downstream chaos, speed reimbursement, and massively improve zero-touch rates while allowing staff to focus on more complicated revenue cycle issues. Every dollar saved from preventing a denial is worth exponentially more than the cost of overturning one.

4. Re-evaluate outsourced vendors with real performance data

Outsourcing has long been framed as a cost-saving strategy. But lower hourly rates don’t mean lower total cost. Not when the quality of work is inconsistent, inefficient, or flat-out ineffective.Once you benchmark against metrics like zero-touch and first-touch payment rates, you might find that while you’re paying $10 per hour for offshore staff versus $20 for onshore, the difference in quality and effectiveness of work effort tells a different tale. Unfortunately, most leaders lack transparency into the actual work that’s being done by outsourced partners.

Consider what it would mean for the average provider organization to increase its labor capacity by 60% or more internally and eliminate those offshore contracts. Or, by increasing capacity for existing resources, consider how a rural health organization struggling to stay afloat could materially improve operational margin.

2026: The year for rewriting financial health

Every headline right now is about crisis: closures, cuts, staffing shortages, declining reimbursement. Communities depend on financially stable healthcare organizations and patients depend on accessible care, but healthcare organizations are only as healthy as their bottom line.

It’s easy to stay anchored to what’s “always worked” in revenue cycle. However, the industry’s economic reality demands stronger, forward-thinking leadership, and financial leaders are the ones who can reverse the trend by adopting benchmarking and technology that directly improve operational margin.

2026 isn’t the year to just survive. It’s the year to sunset the old revenue cycle metrics and focus on what truly matters: measurable, predictable, margin-positive performance.

Matt Seefeld is CEO of MedEvolve