The race for more revenue in medical groups: What’s your gameplan?

Every medical practice is feeling some degree of financial pressure in 2025, driven in part by a Medicare physician pay cut and rising practice expenses.

Simultaneously, claim scrutiny and denials are on the rise, with many practice leaders reporting a growing share of claims subject to at least one payer edit, prolonging cash collection cycles, driving up A/R, and placing additional strain on administrative resources.

Staffing challenges only compound the problem. Vacancies in revenue cycle management (RCM) roles remain difficult to fill, while other clerical and clinical staff wages continue to surge year over year. Without cost-effective automation, practices inevitably face higher per-dollar collection costs.

Taken together, medical practices may need to generate 6% or more in additional gross revenue just to maintain margins.

A June 17, 2025, MGMA Stat poll found that only 56% of medical group leaders reported year-to-date revenue increases relative to the same period in 2024. Another 13% said revenue was about the same, while three out of 10 (30%) reported a decline. One percent were unsure. The poll had 269 applicable responses.

What's influencing revenue in 2025

Revenue growth

Medical practices reporting revenue growth so far in 2025 point to several key drivers:

• Increased patient volumes, the addition of new providers, and enhanced productivity expectations.
• Improvements in physician productivity, better provider utilization, and improved scheduling to boost encounters.
• Enhanced RCM, accurate coding practices, and successful renegotiation of payer contracts.
• Strategic service expansions (e.g., ancillary services), positive effects from Medicaid expansion, and improved value-based payment participation.
• One-time financial boosts such as delayed incentive payments or arbitration wins related to the Federal No Surprises Act.

Revenue stagnation

Practices seeing flat revenue this year typically attribute it to:

• Stagnant or declining reimbursement rates from insurers and Medicare cuts.
• Rising operating costs that neutralize any volume-related gains.
• Provider burnout and lower reimbursement per service or test despite steady patient volumes.
• Some improvement in billing practices has helped mitigate the impact of provider shortages, but unchanged payer agreements and market conditions have kept revenues relatively flat.

Revenue decline

For practices experiencing a revenue drop, the primary factors include:

• Decreased patient volumes and reduced reimbursement rates, particularly from Medicare and commercial insurers.
• Provider attrition, temporary absences, and fewer higher-value services (e.g., surgical procedures, telehealth).
• Additional pressures such as claim denials, credentialing problems, increased patient deductibles (which discourage visits), and broader economic strain.

Collectively, these challenges affect patient flow, long-term profitability, and operational efficiency.

Other factors

Many providers have quickly adopted AI-driven RCM tools to reduce denials and accelerate collections. As these solutions mature, leaders should monitor ROI closely — aiming for measurable, multiple-day reductions in denial rates and days sales outstanding (DSO).

On the legislative front, the unresolved Medicare "doc-fix" debate adds further volatility to financial projections. Current proposals in Congress could tie Medicare reimbursement to inflation starting in 2026, potentially stabilizing future revenues. Until then, practices must strengthen their RCM operations to remain financially viable and competitive.

Revenue growth levers for medical groups

Regardless of specialty, several proven strategies consistently drive revenue improvement.

• Invest in front-end rigor: Real-time eligibility verification and transparent price estimation before patient visits can significantly improve cash flow. Providing clear, upfront financial information reduces the risk of unpaid patient balances.
• Implement structured denial analytics: Establishing a feedback loop with root-cause dashboards, automated appeal processes, and regular coding huddles helps identify patterns, resolve systemic issues swiftly, and minimize revenue leakage.
• Adopt intelligent automation: AI-assisted coding, autonomous payment posting, and predictive follow-up tools can streamline RCM operations. The degree of automation may directly affect the reduction in overall cost-to-collect.
• Enhance digital patient payment capabilities: Text-to-pay reminders, securely stored card-on-file, and digital payment tools can significantly boost self-pay collections and improve overall cash flow.
• Take a strategic approach to payer contracting: Model the financial impact of fee schedule adjustments, renegotiate commercial payer contracts to include favorable escalators, and pursue site-of-service carve-outs to combat shrinking margins.

Revenue growth by specialty grouping

Primary care specialties

• Revenue growth for primary care relies heavily on maximizing value-based incentives and integrated care services.
• Leveraging Medicare’s chronic care and behavioral health integration (BHI) codes can boost monthly patient revenue.
• Offering direct primary care (DPC) memberships and same-day appointment access can help stabilize cash flow by reducing patient leakage and no-shows.
• Prioritizing patient financial counseling helps manage rising self-pay balances from wellness visits and Medicaid redeterminations.

Surgical specialty groups (e.g., orthopedics, ENT, ophthalmology, etc.)

• Surgical practices can drive growth by migrating higher-acuity procedures to office-based settings or ambulatory surgery centers (ASCs).
• Offering global-fee bundles and all-inclusive surgical packages can attract cash-pay and employer-sponsored patients.
• Efficient block scheduling, automated prior authorizations, and real-time charge entry for implants can enhance net collections.
• Pursuing joint ventures with hospitals for lucrative outpatient services helps mitigate revenue losses from site-neutral payment pressures.

Nonsurgical specialty medical groups (e.g., oncology, GI, neurology, etc.)

• Optimizing infusion and specialty drug margins — especially through 340B programs or buy-and-bill carve-outs — is a top priority.
• Embracing remote patient monitoring and episode-based payment models can generate new, stable revenue streams.
• Centralizing prior authorization for imaging and using AI-driven coding tools can reduce administrative overhead and denials.
• Proactively managing drug formularies and negotiating favorable pricing helps safeguard profit margins amid rising acquisition costs.

Multispecialty groups (primary + specialty mix)

• Operational efficiency improves when centralized revenue cycle functions are combined with specialty-tailored workflows.
• Unified digital scheduling, automated patient payment systems, and enterprise-wide analytics reduce administrative burdens and improve patient financial experiences.
• Leveraging enterprise-wide contracts (e.g., global capitation, shared-savings models) helps ensure consistent quality bonus capture and maximum reimbursement.
• Investing in virtual specialty eConsult services reduces referral leakage and supports financial growth across diverse service lines.

Finding your growth formula

When evaluating year-to-date revenue, look beyond top-line numbers to uncover the real story behind your organization’s financial health. Start by identifying the core drivers: Is your growth due to expanded patient volumes, improved payer contracting, or increased use of value-based care incentives?

Next, layer in your expense data — staffing costs, denial rates, supply expenses, and technology investments — to determine whether your revenue gains are truly translating into true profitability. For example, higher revenues paired with rising denials or surging labor costs may offer little net benefit. Conversely, even modest revenue growth can lead to improved margins if costs are well managed.

Understanding the connection between your revenue drivers and cost pressures can clarify your financial trajectory — and highlight where targeted operational changes, like investing in automation or renegotiating payer contracts, could unlock additional profitability.

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