The Cost of Staffing Shortages in Revenue Cycle Management

Revenue Cycle Management (RCM) is the backbone of healthcare finance. It covers the journey from patient registration and insurance verification to medical coding, claims submission, and collections. When it runs smoothly, providers are paid promptly and can reinvest in patient care. However, the financial and operational consequences can be severe when staffing shortages disrupt the cycle.

In recent years, RCM department shortages have moved from occasional challenges to systemic issues. As turnover grows, vacancies persist, and trained staff become harder to recruit, organizations face higher denial rates, longer accounts receivable (A/R) cycles, and rising administrative costs. This isn’t just an inconvenience—it’s a barrier to sustainability, especially for safety-net providers that serve vulnerable populations.

The Scope of Staffing Shortages in RCM

Workforce shortages in healthcare have been well documented, but much attention focuses on clinical roles. The scarcity in back-office revenue cycle functions are less discussed, yet equally critical.

MGMA polling shows that medical coders, billers, and scheduling staff are consistently among the hardest positions to fill. In 2023, medical groups reported turnover rates as high as 40% in front-office and business-office roles, well above national averages across all industries. These are not one-off gaps: they represent systemic workforce instability that disrupts financial operations.

HFMA surveys echo this concern, with nearly all finance leaders reporting at least one vacancy in their RCM teams. Some organizations—particularly hospitals and larger health systems—reported dozens of open roles simultaneously. Beyond the numbers, leaders point to the difficulty of finding candidates with specialized knowledge of payer rules, coding standards, and compliance regulations. The result: revenue cycles are under strain just as reimbursement pressures intensify.

Financial Fallout: Denials, A/R, and Cash Flow

Staffing shortages directly translate into financial losses. MGMA data indicates that one in three medical groups failed to meet productivity targets in 2023, with staffing cited as a primary cause. A short-staffed billing team can’t keep up with coding changes, denial follow-up, or payer appeals. The ripple effects are significant:

1. Increased claim denials: HFMA surveys show that shortages correlate with higher denial rates. Denials can erode up to 3% of net patient revenue if left unresolved, and a backlog of unworked claims can quickly compound losses.
2. Longer A/R cycles: When fewer staff handle more volume, claims sit longer in accounts receivable. This weakens cash flow, strains provider liquidity, and makes investing in new staff or technology harder.
3. Compliance risks: Price transparency and reporting requirements demand careful oversight. HFMA research found that nearly one-third of organizations with staffing shortages reported difficulty meeting federal compliance deadlines.

Together, these financial and regulatory pressures create a feedback loop. As teams fall behind, stress and burnout rise, leading to further turnover and perpetuating the cycle.

The Hidden Costs of Turnover

Turnover in RCM roles is expensive in ways that aren’t always visible on a balance sheet. Recruiting new staff requires time, advertising dollars, and HR resources. Training adds another layer of expense, especially in roles that require deep familiarity with payer contracts and coding standards.

However, the most significant cost may be the loss of institutional knowledge. A medical biller who has worked with a specific payer panel for years can spot issues before they become denials. When that employee leaves, the organization loses a person and a body of expertise. This knowledge gap often leads to a spike in billing errors, longer onboarding periods for replacements, and overall lower efficiency.

Even a single vacancy can slow billing to a crawl for smaller practices and community health organizations. Larger health systems may absorb vacancies more easily but face higher absolute costs due to scale. Either way, turnover compounds financial pressure and destabilizes the revenue cycle.

Outsourcing RCM: More Than Cost Savings

As the labor market tightens, many providers are rethinking their approach. Outsourcing RCM functions has become more common—not just to reduce costs but also as a strategic hedge against workforce shortages.

Outsourcing offers several key benefits:

1. Stability and expertise: Outsourced partners maintain pools of trained professionals specializing in medical coding, medical billing, and denial management. This provides continuity even when local hiring pipelines are thin.
2. Efficiency gains: Outsourcing partners use standardized workflows and advanced technology. Reducing variation and error rates can lower denial rates and accelerate collections.
3. Scalability: Unlike fixed in-house teams, outsourced resources can flex with patient volumes. This elasticity is especially valuable during seasonal demand spikes or when launching new service lines.

Deloitte and HFMA highlight outsourcing as a strategic tool for healthcare organizations facing operational and staffing pressures. It is no longer viewed as a back-office fix, but as a lever for resiliency and financial performance.

Spotlight on FQHCs, CHCs, and Tribal Health Programs

Federally Qualified Health Centers (FQHCs)

FQHCs provide essential care to underserved populations under complex reimbursement systems, including Medicaid prospective payment and HRSA oversight. Surveys show that some centers have lost a quarter or more of their workforce in recent years, directly affecting billing. Without adequate staff, FQHCs struggle to capture all eligible revenue, threatening financial viability and limiting their ability to expand services.

Community Health Centers (CHCs)

CHCs, many of which qualify as FQHCs, face similar challenges. In 2024, the Commonwealth Fund reported that over 70% of CHCs experienced staffing shortages impacting clinical and administrative roles. At the same time, these centers face shrinking reimbursement rates and rising uncompensated care. Billing accuracy and timely claims submission are more critical than ever, yet increasingly difficult to achieve.

Tribal Health Programs

Tribal health organizations must navigate multiple payer systems simultaneously—Indian Health Service (IHS), Medicaid, Medicare, and commercial insurers. Each payer has unique billing requirements, and staffing shortages exacerbate the complexity. Without sufficient RCM staff, Tribal health programs risk compliance gaps, delayed reimbursements, and funding shortfalls that directly impact the communities they serve.

For these safety-net providers, RCM staffing shortages are not simply administrative bottlenecks—they are existential threats to financial stability and patient access.

CPa Medical Billing: A Trusted Partner

CPa Medical Billing, a GeBBS Healthcare company, provides the specialized expertise and scalability needed to stabilize revenue cycles in this environment. With deep experience serving diverse provider types—including FQHCs, CHCs, and Tribal Health programs—CPa helps organizations reduce denials, improve collections, and ensure steady cash flow. CPa offers a reliable path to financial and operational resilience for providers struggling with staffing shortages.

Conclusion & Next Steps

Key Realities:

1. Staffing shortages in RCM are widespread, costly, and persistent.
2. Denials, A/R delays, and compliance gaps are among the most direct financial impacts.
3. Safety-net providers such as FQHCs, CHCs, and Tribal health organizations face amplified risks.
4. Outsourcing is proving to be a strategic solution—not just to cut costs, but to build resiliency.

Action Steps:

1. Audit key RCM metrics: Monitor denial rates, A/R days, and turnover to assess impact.
2. Evaluate outsourcing: Consider partners with proven expertise in safety-net billing.
3. Benchmark performance: Use MGMA, HFMA, and AMA data to set realistic staffing and productivity goals.
4. Advocate for support: Engage with CMS, HHS, and policymakers to strengthen funding and resources for billing infrastructure.