Protecting Margins in Outpatient Care: Insights from an Executive Roundtable

In this article, we’ll continue to share strategies and insights from XiFin research, conducted by HFMA, that will empower hospital and health system CFOs to navigate the challenges they surfaced in HFMA’s CFO of the Future survey. In a previous article, we identified pathways to mitigating payor-based margin erosion and consumer affordability pressures. Now, we turn specifically to peer-offered strategies to preserve and expand margins for outpatient, ancillary, and ambulatory services.

Outpatient and ancillary services have long been strong margin contributors, but today, those margins are under threat. Hospital outpatient services costs are up 8.3% (Peterson-KFF data, 2024), and payors are steering patients toward lower-cost competitors. For CFOs, protecting outpatient profitability is now a strategic imperative.

In the HFMA article, “Revenue Cycle Leaders: How They Optimized Financial Performance for Outpatient and Ancillary Services,” (sponsored by XiFin), five healthcare finance leaders from hospitals and health systems throughout the United States shared strategies to address this pressure. From understanding the drivers behind revenue compression to protecting revenue, controlling costs, and strengthening cash flow across outpatient service lines—each panelist shared their thoughts on architecting an enduring, sustainable future for their organization’s outpatient services. Here are some key highlights from the discussion.

Financial Pressures Every CFO Should Watch

Roundtable participants flagged several issues driving margin compression:

• Revenue Risk: Bundled payments, stricter prior authorization requirements, and rising denial rates are threatening collections.
• Operational Bottlenecks: Staffing shortages are creating backlogs in processing high-volume, low-dollar claims.
• Financial Volatility: Delayed reimbursement is leading to illiquid AR and constraining investment capacity.
• Compliance Pressure: Regulations like the No Surprises Act are demanding stronger cost estimation and documentation.

Three Strategies for Financial Leaders

1. Automate to Reduce Denials and Rework

• Use analytics and AI to detect patterns in denials and underpayments.
• Automate repetitive claim edits and leverage exception-based workflows.
• Focus revenue cycle teams on the highest-value activities to preserve margins.

2. Get the Order Right the First Time

• Build validation rules into order entry to catch errors before they create denials.
• Generate real-time cost estimates to support upfront patient collections.
• Ensure authorizations match what was performed to avoid costly rework.

3. Build Discipline Around High-Volume Claims

• Centralize oversight of outpatient claims to reduce leakage.
• Track payor-specific denial trends to drive targeted interventions.
• Monitor KPIs like turnaround time, write-offs, and net collection rates to keep performance on track.

Why This Matters for CFOs and Finance Leaders

For CFOs and finance executives, these strategies go beyond operational tweaks; they are levers to protect liquidity and fund strategic growth. Automating denial prevention, improving order accuracy, and tightening claim discipline directly impact cash flow, days in AR, and overall financial resilience.

Read the Full Roundtable for More

This is just a snapshot of the full HFMA Executive Roundtable, which also covered payor contracting strategies, contingency planning for clearinghouse disruptions, and the growing role of AI in revenue cycle management.

Read the full HFMA article, “Revenue Cycle Leaders: How They Optimized Financial Performance for Outpatient and Ancillary Services,” to see how your peers are protecting margins and preparing for the future of outpatient financial performance. In our next post, we’ll share how building patient trust through the financial experience can further strengthen that financial performance.