With The Financial Health of Hospitals at Stake, AI-Powered CDI Can Provide a Critical Revenue Boost

By AGS Health

July 23, 2022

The financial repercussions of the COVID-19 pandemic are considered secondary to the health crisis, but there’s more overlap between them than you may think. A viewpoint published in the Journal of the American Medical Association cites the challenge of running a financially solvent hospital during staffing shortages, overwhelming demand, and a pause in the outpatient and elective procedures that often make up the bulk of hospital revenue.

As the U.S. emerges from the pandemic, the financial impact to healthcare institutions of all sizes is significant. Delayed preventative treatments led to worsening population health, resulting in longer hospital stays. Economic conditions are fragile and exacerbated by the great resignation and inflation, which are putting more financial pressures on healthcare institutions. Many hospitals are laying off staff to meet budget needs. All the while, regulatory audits have become even more scrutinous. All of this contributes to the need for revenue cycle optimization.

One way to improve efficiency is to rely on technologies (such as artificial intelligence ) to automate tedious manual processes. Using technology to improve the speed and accuracy of coding allows people to shift their focus and perform more complicated tasks, such as gathering clinical documentation.

Clinical documentation has always been a challenge. Providers often document patient issues differently and use shorthand only they understand. Documentation clarity is critical for proper reimbursement. 56% of healthcare professionals believe clinical workflow optimization is obstructed because clinical documentation is unstructured data.

Most clinical documentation is stored in an electronic health record. Organizations evaluate the documentation accompanying each patient encounter. Payers add pressure by denying reimbursement to providers who fail to prove the necessity of services. New payment models containing risk scores have also made it critical for providers to document underlying issues during visits, creating additional complexity and opportunities for process improvements.

The AI approach

Machine learning, natural language processing, computer vision, and, to a degree, robotic process automation all fall under the umbrella of artificial intelligence. These subcategories require an implementation road map, including reference content to teach an algorithm how to process raw data and turn it into useful information. NLP, for example, helps computers read and process written information, such as that contained in a clinical knowledge graph.

An NLP solution can accurately determine the relationship between diagnosis codes, charge codes, prescription drug names, body parts, and syntax. Once the baseline capabilities have been established, the content can be updated with abbreviations, reference language, and nuances unique to a facility’s EHR template or a physician’s notation preferences.

AI possesses all the raw capabilities mentioned above, but further refinement and integration are critical. There’s a big difference between being able to read something and understanding it. Clinical NLP powered by knowledge graphs is capable of scanning charts for specific words and identifying them. However, it cannot understand the meaning of those words in context as a physician, nurse, or coder could.

Adding additional layers of analysis could be the answer. We’re within a few years of AI being able to evaluate the patient and the case in context to determine whether specific diagnosis codes are valid.

Augmenting existing efforts

Revenue cycle departments are fighting to protect and increase revenue, but the personnel needed to staff clinical documentation improvement programs is difficult to come by. Before being coded and billed, charts can be reviewed by a machine and implemented by AI-powered CDI Software. This ensures the consistency required to capture risk scores, avoid denials, and survive audits. CDI leaders can also get the job done with fewer people: By shortening the time physicians spend looking at screens instead of interacting with patients, they can help reduce burnout and depression, which impact more than 40% of healthcare workers.

Evidence supports the use of CDI Software, with Black Book Market Research finding that hospitals surveyed averaged $2.7 million in financial improvements from AI-enhanced CDI in 2021. They achieve this by boosting efficiency in the documentation process, reducing coding errors to minimize revenue loss, and identifying missed opportunities to maximize reimbursement.

Even before the pandemic, revenue cycle management was crucial in enabling providers to fund the services necessary to provide the best possible care to their patients. Now, as physicians struggle to keep pace with rising case volumes and complex reimbursement schemes from payers, CDI programs’ ability to maintain documentation quality while reducing manual processes is becoming increasingly important.

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AGS Health


AGS Health is more than a revenue cycle management company—we’re a strategic partner for growth. Our distinctive methodology blends award-winning services with intelligent automation and high-touch customer support to deliver peak end-to-end revenue cycle performance and an empowering patient financial experience.

We employ a team of 12,000 highly trained and college-educated RCM experts who directly support more than 150 customers spanning a variety of care settings and specialties, including nearly 50% of the 20 most prominent U.S. hospitals and 40% of the nation’s 10 largest health systems. Our thoughtfully crafted RCM solutions deliver measurable revenue growth and retention, enabling customers to achieve the revenue to realize their vision.

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