Many healthcare executives are fighting the same battle on two fronts. On the clinical side, there are not enough nurses, physicians, and allied health professionals to meet demand. On the financial side, revenue cycle teams are understaffed, burnout is rising, and key processes are falling behind. At the same time, inflation and payer pressure are squeezing margins.
When staffing gaps hit both care delivery and the revenue cycle at once, the result is predictable: delayed services, denied claims, rising aged A/R, and deteriorating cash flow. The organizations that will come out ahead are not the ones trying to “hire their way out” of the problem, but those that rethink how work is organized, resourced, and measured across the entire revenue cycle.
This article lays out a set of concrete strategies for independent practices, group practices, hospitals, and billing companies to address the clinical and revenue cycle labor shortage in a coordinated, financially responsible way. The focus is on business impact, not theory: stabilizing cash, reducing denials, and protecting staff from unsustainable workloads.
1. Quantify the Labor Impact on Your Revenue Cycle Before You Start Fixing It
Most organizations know they are understaffed, but very few can clearly articulate how that translates into lost cash flow and avoidable write offs. Before you invest in recruiting, outsourcing, or technology, you need a baseline view of how today’s labor constraints are affecting the revenue cycle.
Why this matters
Without data, leaders tend to respond to the loudest problem, not the most expensive one. For example, executives may focus on clinical labor costs while millions sit unworked in aged A/R because there are not enough billers and follow up staff. A quantified view lets you prioritize solutions that have the highest return on cash and margin.
Key metrics to capture
- Productivity per FTE: claims billed per biller, follow ups per A/R specialist, encounters coded per coder, pre authorizations per patient access rep.
- Backlog indicators: days from DOS to charge entry, days from charge entry to claim submission, number of unworked denials, number of accounts with no touch in 30+ days.
- Financial impact: net A/R days, percentage of A/R over 90 and 120 days, write offs due to timely filing, preventable denials as a percent of total claims.
- Staff risk markers: average overtime hours, voluntary turnover, open RCM positions aging over 60 days.
Simple framework to apply
Use a three step “MAP” framework.
- Measure current KPIs for each step of the revenue cycle, not just at the aggregate level.
- Assign a monthly dollar value to each failure mode. For example, “$275,000 lost to timely filing denials in Q1”.
- Prioritize issues where a change in staffing model or workflow could realistically move the needle within 6 to 12 months.
When you can say, “We are losing $900,000 a year because we do not have enough denial specialists,” it becomes much easier to justify creative staffing solutions, outsourcing, or automation to your board and finance committee.
2. Redesign Roles and Workflows To Get More Revenue Out Of Each FTE
Once you understand where labor gaps hurt the most, the next step is to get more value from the staff you already have. That does not mean asking people to work harder. It means eliminating low value work, clarifying ownership, and aligning your best talent to the steps that have the highest cash impact.
Why this matters
In most hospitals and practices, highly skilled revenue cycle staff spend a significant portion of their day on tasks that are either duplicative, manual, or low impact. Examples include chasing missing documentation that could be captured automatically from the EHR or re keying data between systems. When you right size workflows, you can increase throughput per FTE without burning people out.
Practical redesign steps
- Segment the work by complexity. Separate simple, high volume tasks (like routine eligibility checks) from complex, judgment based work (like clinical denial appeals). Assign the complex categories to your strongest internal team. Move lower complexity tasks to junior staff or external partners.
- Standardize and script common workflows. For example, build clear decision trees for denial routing, underpayment identification, and patient billing disputes. This reduces training time and variability.
- Remove non RCM tasks from RCM staff, such as IT troubleshooting, ad hoc reporting that could be automated, or repeated manual downloads of payer remittances.
- Leverage batch work for repetitive actions (bulk worklists, standardized appeal letter templates, pre built phone scripts) so staff can move rapidly through accounts with similar issues.
Real world example
A medium size multispecialty group discovered that its senior A/R team spent nearly 20 percent of their time cleaning up demographic errors and chasing prior authorizations that were missed at scheduling. By moving responsibility for demographic accuracy and authorization initiation to a strengthened patient access team, and by tracking error rates weekly, the group reduced initial denials by more than 15 percent and freed senior A/R staff to focus on high dollar accounts and payer escalations.
For leaders facing staffing shortages, workflow redesign is one of the fastest levers to improve performance, often with little or no additional headcount.
3. Stabilize Clinical Capacity So Financial Performance Is Not Held Hostage
It is tempting to view the staffing crisis purely as a clinical operations problem. In reality, every unfilled nursing role or physician vacancy has a direct revenue consequence through fewer billable encounters, longer length of stay, and delayed discharges.
Why this matters
Revenue cycle leaders can optimize claims all day, but if the front end cannot admit, treat, or discharge patients efficiently, your net revenue potential shrinks. Clinical and RCM strategies must be aligned, particularly in service lines that drive a large portion of margin such as surgery, cardiology, oncology, and behavioral health.
Strategic levers for clinical capacity
- Blend staffing models. Use a mix of core employed staff, per diem pools, travel staff where absolutely necessary, and remote clinicians in appropriate specialties (for example, telepsychiatry, tele ICU support, virtual scribes).
- Cross train and upskill. For example, train experienced RNs for expanded roles in utilization review or clinical documentation improvement, which directly influences revenue, while LPNs or medical assistants support routine clinical tasks.
- Rationalize low margin services. Identify service lines where clinical shortages are chronic and margins are thin. Redesign those services, partner with regional players, or in some cases scale back in order to protect the viability of core profitable lines.
Operational linkage to RCM
Revenue cycle leaders should be at the table when clinical staffing decisions are made. At a minimum, tie clinical staffing plans to:
- Projected visit and procedure volumes by specialty
- CDI and coding support needs for complex inpatient and surgical cases
- Expected denials risk if documentation, order entry, or charging steps are rushed or delegated to inadequately trained staff
If clinical leaders opt for a high ratio of temporary labor, make sure there is a plan to orient these staff to documentation standards, order sets, and charge capture workflows. Otherwise, you may see a spike in denials and underpayments that overwhelms an already short staffed revenue cycle team.
4. Use Outsourcing and Offshoring Strategically To Protect Cash Flow
For many organizations, the question is no longer whether to outsource pieces of the revenue cycle, but how to do it in a way that is sustainable, compliant, and cost effective. In the context of domestic labor shortages and rising wages, a thoughtful outsourcing strategy can be the difference between surviving and thriving.
Where outsourcing has the highest impact
- High volume, rules based work. Examples include charge entry from structured documentation, payment posting, secondary billing, routine follow up on small balance accounts, and batch eligibility verification.
- Time zone sensitive tasks. Offshore partners can work queues overnight so your team starts the day with fewer backlogs.
- Specialized skills in short supply locally. This often includes certified professional coders in niche subspecialties or experienced denial nurses for complex clinical appeals.
Risk and quality considerations
To safeguard your revenue and compliance posture, put guardrails in place:
- Define service level agreements for turnaround time, accuracy, and productivity.
- Maintain clear data security and HIPAA requirements, including audit trails and limited access based on role.
- Keep denial and compliance sensitive decisions under internal oversight, especially medical necessity appeals and write off approvals.
- Establish a cadence for joint KPI review so outsourcing partners are accountable for measurable financial outcomes, not just activity volume.
Cash flow and margin impact
Properly structured, outsourcing can simultaneously lower the cost per claim and improve yield per claim. For example, shifting 30 to 40 percent of your back office volume to a global partner at a lower labor cost, while maintaining or improving quality, can free up cash to invest in clinical hiring, automation, and CDI programs.
Choosing the right partner also matters. One of our trusted partners, Quest National Services, specializes in full service medical billing and revenue cycle support, which can be particularly valuable for practices and groups that need both staffing relief and process expertise.
5. Deploy Automation Carefully To Augment, Not Replace, Scarce Talent
Automation is frequently marketed as a cure for the labor shortage, but poorly chosen or poorly implemented tools can create more work rather than less. The right approach is to treat automation as a force multiplier for your best people, not a substitute for them.
High value automation targets
- Eligibility and benefits verification with payer API integrations or clearinghouse tools that automatically update coverage and flag discrepancies for human review.
- Claim status inquiries that auto populate payer responses into work queues, allowing staff to focus on problem claims.
- Denial pattern analytics that highlight root causes by payer, location, physician, and CPT or DRG, so you can prioritize upstream fixes.
- Patient financial engagement such as automated texting and email for estimates, statements, and payment reminders.
Implementation checklist
- Start with one or two narrow use cases that have a clear business case and measurable baseline.
- Involve front line staff in tool selection and design so workflows align with reality.
- Define success metrics upfront, for example, “reduce manual eligibility calls by 60 percent and cut registration related denials in half within 6 months”.
- Monitor for new failure modes, such as incorrect auto selection of plans, and keep a human in the loop, especially in the early phases.
When automation removes administrative friction from your revenue cycle, the staff you already have can focus on payer negotiation, complex denials, and patient experience, which are the areas where human judgment is irreplaceable.
6. Build a Retention Centric Culture Before You Spend More on Recruitment
In a tight labor market, many organizations default to signing bonuses and higher hourly pay. While compensation must be competitive, those tactics on their own rarely create loyalty. Revenue cycle staff and clinical personnel leave primarily because of chronic stress, unrealistic workloads, and a perceived lack of growth.
Why this matters for revenue
Every time a trained coder or senior A/R analyst walks out the door, you lose not only their productive capacity, but also institutional knowledge of payer behavior, local workflows, and relationships inside the organization. High turnover drives up denials and delays as new staff climb the learning curve.
Retention strategies that directly support RCM performance
- Career ladders and certifications. Offer clear progression for billers, coders, and analysts tied to national certifications and internal performance. Link advancement to measurable outcomes such as denial reduction or improved days in A/R.
- Flexible work arrangements. Where possible, offer hybrid or fully remote options for revenue cycle roles. This can dramatically expand your recruiting footprint and reduce attrition.
- Regular feedback on impact. Share financial performance dashboards with staff, not just leadership. Help them see how their work reduces write offs or improves cash, and recognize high performers publicly.
- Burnout monitoring. Track overtime, queue backlogs per FTE, and error rates. When indicators worsen, intervene early with temporary help, reprioritization, or process changes.
Organizations that invest in the long term success of their people, particularly in “back office” roles, tend to see smoother cash flow, fewer surprises at month end, and a more resilient posture when market conditions change.
7. Align Finance, Clinical, and Revenue Cycle Leadership Around a Unified Roadmap
The labor shortage is not a problem that any single department can solve. CFOs, CMOs, CNOs, practice administrators, and revenue cycle leaders must coordinate their strategies so that staffing, technology, and outsourcing decisions are mutually reinforcing rather than conflicting.
Core elements of a unified roadmap
- Shared financial targets. Agree on specific goals for net revenue, days in A/R, denial rates, and labor as a percentage of net patient revenue. Make sure each goal has both clinical and RCM owners.
- Transparent trade offs. For example, if you decide to allocate more budget to clinical travelers to keep ORs running, what will you do on the RCM side to offset the added cost or increased documentation risk?
- Joint governance of outsourcing and automation decisions. Build cross functional steering groups that include clinical voices when selecting RCM partners or technologies, and involve RCM leaders when choosing clinical documentation or scheduling tools.
- Quarterly portfolio reviews. Treat staffing and process changes as a portfolio of investments. Review which initiatives are improving revenue and which are not, then redirect effort accordingly.
When leaders across the organization acknowledge that labor is a constrained resource and design around that reality, it becomes much easier to protect both quality of care and financial stability.
Turning Shortage Into Strategic Advantage
The current labor market will remain challenging for the foreseeable future. The organizations that will outperform are not those that try to simply fill every vacancy, but those that:
- Understand exactly how staffing gaps damage their revenue cycle.
- Redesign work so each FTE contributes more directly to cash and margin.
- Stabilize clinical capacity for high value services.
- Use outsourcing and automation selectively, with clear financial guardrails.
- Invest in retention and professional growth for revenue cycle and clinical staff.
- Align leadership around a single, integrated roadmap.
If your organization is looking to improve billing accuracy, reduce denials, and strengthen overall revenue cycle performance in the face of ongoing staffing challenges, partnering with experienced RCM professionals can accelerate your progress. One of our trusted partners, Quest National Services, provides comprehensive medical billing and revenue cycle support for healthcare organizations working through complex payer environments.
For help assessing your current gaps or planning a practical roadmap that fits your size and specialty, you can contact us. A focused conversation that connects your staffing reality to your revenue performance is often the first step to restoring control over cash flow and long term financial health.
