- Hospital-employed physicians nearly doubled — from 24% in 2010 to 46% today — but billing operations have not evolved as fast, creating misalignment as new practices are added.
- Physician billing lags hospital billing because variation is built into the process; hospitals spent $19.7B appealing denied claims in 2022.
- Across medical groups, 8% of claims are denied on first submission and 13%+ of A/R stays unresolved beyond 120 days.
- The fix is to build physician billing as infrastructure — integrating charge capture, coding, denial management and A/R follow-up so automation handles rules-based tasks and experts focus on resolution.
- Structured, consistent physician billing delivers measurable gains: A/R days down up to 25%, clean-claim rates up to 98%, and steadier cash flow.
How hospitals can strengthen physician billing performance through the right balance of people, process, and technology.
Expansion without alignment
Hospitals continue to grow their employed physician networks, and physician billing has become a central source of hospital revenue.
- 24% → 46%Share of hospital-employed physicians, 2010 to today
- $2.38MRevenue per employed physician
The financial opportunity is not up for debate. The challenge is that billing operations have not evolved as rapidly. When new practices are added, the lack of alignment in how work is documented and billed puts pressure on existing systems.
The challenge: physician billing performance lags behind
Physician billing lags because variation is built into the process; every step becomes harder to control. Information doesn’t flow smoothly from the point of care to billing, and leadership can’t easily see those differences across specialties. Delays and denials build from the foundation up.
- $19.7BSpent by hospitals appealing denied claims in 2022
- 16% / 14%Medicare Advantage / commercial claims denied on first submission
Physician billing underperforms because the process lacks uniformity — and without that consistency, errors and denials keep revenue from moving as it should.
The financial impact: inconsistency drains cash flow
Denied claims and slow reconciliation reduce the cash available to support operations.
- 8%Of claims denied on first submission across medical groups
- 13%+Of A/R unresolved for more than 120 days
Until billing operations are rebuilt for consistency, physician groups within hospitals will continue to trail the performance of the larger system.
The strategic fix: build physician billing as infrastructure
Knack RCM integrates charge capture, coding, denial management, and A/R follow-up into a single, coordinated process designed for hospital-owned physician practices:
- Automation handles repetitive, rules-based tasks.
- Analytics surface payer patterns early.
- Experts focus on resolution, compliance, and process improvement.
The result is physician billing that scales with enterprise growth and performs with hospital-level consistency.
What structured billing delivers
Structured, consistent physician billing delivers measurable gains:
- Up to 25%Reduction in A/R days
- Up to 98%Clean-claim rate
- SteadierCash flow and improved forecasting
The takeaway
Strong hospital performance starts with consistent physician billing. When billing is integrated into the larger revenue cycle, the organization gains visibility and control across every point of reimbursement. Knack RCM partners with health systems to align physician billing with the same structure and reliability as hospital billing.
Sources
- American Medical Association. Policy research perspectives: physician practice characteristics. 2024.
- Fierce Healthcare. More physicians are working under hospitals’ corporate entities, report finds.
- Becker’s Hospital Review. Health IT inefficiencies are costing hospitals billions.
- American Hospital Association. Payer denial tactics: how to confront a $20 billion problem. 2024.
- MGMA. Days in A/R trends across practices.
Frequently asked questions
Why does physician billing lag behind hospital billing?
Because variation is built into the process — every step is harder to control, information doesn't flow smoothly from point of care to billing, and leadership can't easily see differences across specialties. That lack of uniformity lets delays and denials build from the foundation up.
How much has hospital employment of physicians grown?
Hospital-employed physicians rose from 24% in 2010 to 46% today, with each employed physician generating roughly $2.38M in revenue — making physician billing a central source of hospital revenue.
What is the financial cost of denied and unresolved claims?
Hospitals spent $19.7B appealing denied claims in 2022. About 16% of Medicare Advantage and 14% of commercial claims are denied on first submission; across medical groups, 8% of claims are denied on first submission and 13%+ of A/R stays unresolved beyond 120 days.
What is Knack RCM's recommended fix for physician billing?
Build physician billing as infrastructure rather than an afterthought — integrating charge capture, coding, denial management and A/R follow-up into one coordinated process where automation handles rules-based tasks, analytics surface payer patterns early, and experts focus on resolution, compliance and process improvement.
What results does structured physician billing deliver?
Measurable gains including A/R days reduced by up to 25%, clean-claim rates rising to as much as 98%, and steadier cash flow with improved forecasting.