Hospitals Faced $61 Billion in Billing Costs

Healthcare providers dealing with rising claim denials and administrative burdens are seeking new automation strategies.

Updated on Oct. 14, 2026 in Healthcare

Hospitals Faced $61 Billion in Billing Costs

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Is the burden of healthcare claim denials and administrative delays worsening in your community?

Hospitals spent $43 billion collecting insurer payments and another $18 billion overturning claim denials in 2025. Facing these high administrative costs, more organizations are leveraging outsourced customer experience platforms to manage member interactions.

Why it matters

Rising operational friction, compounded by labor shortages and upcoming Medicaid work verification changes in 2027, has squeezed margins for healthcare providers. These inefficiencies now arrive as ACA Marketplace insurers propose a median 18% premium increase for 2026.

Hospitals spent a combined $61 billion on payment collection and denial reversals in 2025, while ACA Marketplace insurers have proposed a 18% median premium hike for 2026, up from a 7% increase the prior year.

The players

iQor

A business process outsourcing firm with 45,000 employees operating across 10 countries.

The details

Providers are increasingly using agentic automation and specialized support teams to handle high volumes of billing and authorization inquiries. These systems analyze 100% of customer interactions to identify recurring authorization blocks, allowing firms like iQor to scale operations by 500% during surges. Dedicated teams can be fully operationalized within 30 days to address these recurring administrative backlogs.

2025: Hospitals spent $43 billion to collect payments and $18 billion to reverse denials.
January 2026: A KFF poll recorded that one-third of insured adults had a claim denied in the past two years.
2026: ACA Marketplace insurers proposed an 18% median premium increase.
October 14, 2026: iQor showcased its healthcare customer experience service offerings.
2027: Medicaid eligibility redeterminations will begin including mandatory work verification.

Market Landscape

The current surge in insurer claim denials and hospital collection costs mirrors the escalating premium trends within the ACA Marketplace. This environment marks a shift from historical administrative norms, as providers increasingly turn to third-party automation to manage regulatory friction.

Operators should review their current authorization and denial management processes ahead of the 2027 Medicaid work requirement changes. Benchmarking the cost of internal administrative teams against scalable, automated CX solutions is essential to maintaining margins as premium pressures rise.

The takeaway

Healthcare providers face a critical need to reduce the $18 billion spent annually on overturning claim denials. Monitor your internal denial-reversal rate as a primary metric to determine if third-party automation is necessary for your operational scale.