The Healthcare Financial Management Association (HFMA) Annual Conference continues to be one of the most valuable opportunities to take stock of where healthcare finance stands, and where it’s headed. This year’s event, held in Denver, brought together finance professionals, industry leaders, and policy experts to discuss the strategies, challenges, and innovations shaping the future of healthcare.
With more than 70 educational sessions under the theme “Leading the Way,” the conference highlighted pressing topics such as artificial intelligence, payor strategy, regulatory changes, market outlooks, and accounting updates. As the sector continues to grapple with cost pressures, workforce fatigue, and evolving expectations around technology and transparency, the insights shared during the event made one thing clear: adapting quickly and strategically is no longer optional, it’s essential.
Technology & AI: No Longer Optional, But Essential
One of the most dominant themes was technology, particularly artificial intelligence. The message was loud and clear: AI isn’t a future trend; it’s a present-day necessity.
Investments in technology are critical to:
- Addressing financial constraints
- Creating operational efficiencies
- Remaining competitive
- Maintaining patient-centered care
AI-driven tools in electronic health records, billing and coding, and financial analysis are streamlining processes and creating unprecedented transparency. However, smaller providers face significant challenges in funding these investments, and the accelerated pace of change—combined with an already strained workforce—makes implementation difficult.
Still, the consensus remains: falling behind on technology adoption is not an option.
The Payor Puzzle: Strategies for Managing Complexity
Another recurring conversation was the growing challenge of working with managed care providers. Providers reported both operational and financial strain, particularly on revenue cycle teams.
Key strategies shared included:
- Maximizing the use of social determinants of health “Z” codes to ensure accurate billing.
- Community engagement in negotiations: One mid-sized health system highlighted its approach of transparent education and communication with community members, securing their support during managed care negotiations.
This level of collaboration reflects a broader industry trend: finance leaders must think beyond the back office and engage stakeholders across their entire ecosystem.
Market Outlook: Stable, But Shaky
The S&P Global team delivered an update with cautious optimism, characterizing the healthcare sector as “stable but shaky.” While this marks an improvement from the generally negative outlook of recent years, the outlook remains fragile.
Positive Trends:
- Revenue and volumes are improving.
- Rating actions are trending more favorably, with more upgrades than downgrades.
- Overall stabilization is evident compared to the immediate post-pandemic period.
Challenges on the Horizon:
- Regulatory uncertainty remains a significant risk.
- Rising expenses continue to outpace reimbursement growth.
- Difficult payor negotiations and policy shifts could impact margins.
- Event-related challenges—from cyberattacks to natural disasters—are becoming increasingly influential in rating decisions.
Looking ahead, S&P is watching several key areas: liquidity, capital investment, governmental and payor environments, and M&A activity.
Capital investments will be critical as aging infrastructure demands upgrades. Many organizations are increasing their line-of-credit capacity to bolster liquidity. Meanwhile, mergers and acquisitions are expected to continue as systems seek scale to manage costs, data needs, and payor leverage.
FASB & Accounting Updates
From an accounting perspective, the Financial Accounting Standards Board (FASB) reported relatively few new standards impacting healthcare, but several notable projects are underway:
- Measurement of Credit Losses: A new ASU is expected in 2025 to simplify applying CECL (Current Expected Credit Loss) for accounts receivable and contract assets. This includes a practical expedient for using historical data without macroeconomic adjustments and an accounting policy election to consider post-balance sheet collection activity.
- Crypto Assets: ASU 2023-08, effective for fiscal years beginning after December 15, 2024, defines crypto assets and addresses accounting and presentation requirements.
- Software Costs: A project is in progress to modernize internal-use software cost accounting, including defining when capitalization begins and introducing the concept of “significant development uncertainty.”
Uniform Guidance (UG) Update
The 2025 Compliance Supplement is expected soon, following notable revisions in 2024. Anticipated changes include:
- New and deleted federal programs.
- Significant revisions to Part 3, including separate sections for pre- and post-2024 UG.
- Updates to performance reporting and compliance requirements.
With historic federal funding winding down and staffing shortages at both agencies and funded organizations, federal grant compliance and collectability are emerging as areas of increased risk. Some providers may even face enhanced going concern considerations as funding levels decline.
Federal Policy & OBBBA: What It Means for Healthcare
At the time of the conference, the One Big Beautiful Bill Act (OBBBA) was still pending finalization. Now that the legislation has passed, we have a clearer view of how it will impact the healthcare sector.
For a detailed breakdown of the finalized provisions and their implications, check out our latest article HERE and explore our OBBBA Resource Hub for additional insights and updates.
The Road Ahead
The HFMA Annual Conference underscored what most healthcare finance leaders already know: the industry’s challenges are complex, but not insurmountable.
Organizations that:
- Invest in technology and AI
- Engage strategically with payors
- Monitor liquidity and risk
- Adapt to regulatory shifts
…will be better positioned to navigate uncertainty and lead the way forward.
If you need further guidance or have any questions, we are here to help. Please do not hesitate to reach out to discuss your specific situation.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
