Administrative waste remains one of the most persistent and under-addressed cost drivers in U.S. healthcare. While conversations about affordability often center on drugs or clinical utilization, countless dollars each year are consumed by the administrative machinery required to navigate reimbursement. Activities such as contract interpretation, policy maintenance, prior authorization, coding oversight, and payment reconciliation now represent a substantial share of operational effort for provider organizations. These processes are necessary to secure reimbursement, yet they prove to be a burdensome step, consistently yielding in denials or resubmissions.

These consequences extend beyond cost alone. Administrative overhead raises the expense of delivering care, increases friction for clinicians and staff, and slows patient access to needed services. These are further exacerbated by fragmented manual workflows leading to unnecessary delays, inconsistencies, and avoidable denials that require further rework. As organizations scale, so do staffing needs devoted purely to interpreting the intricacies of payer relations rather than improving care delivery. The result is a system in which complexity compounds, and operational energy is diverted away from patients and toward paperwork.

Root Causes: Why Contract and Policy Complexity Drives Waste

At the center of this waste is the growing complexity of payer contracts and policies. Reimbursement rules are rarely standardized and are frequently updated, often with little coordination across payers or product lines. A single health system or physician group may manage dozens of payers, each with unique fee schedules, coverage criteria, billing methodologies, and documentation requirements. Even small variations in language or timing can require new interpretations and workflow adjustments.

This constant influx of variability creates a structural administrative load. Every department involved in the RCM lifecycle must repeatedly interpret the same evolving rules, often in parallel and without a shared source of truth. Knowledge becomes siloed causing inconsistencies across organizations. Rather than a one-time burden, complexity becomes continuous, forcing organizations into a cycle of reactive updates that steadily expands administrative effort over time.

Impacts: How Waste Manifests Operationally

These structural issues surface in daily operations in ways that are both predictable and costly. Outdated or misapplied policies lead to preventable denials and high-volume appeals, creating labor-intensive rework cycles that absorb time and resources. Misaligned fee schedules or reimbursement methodologies result in systematic underpayments that quietly erode revenue. Prior authorization requirements, when interpreted inconsistently or too late, delay scheduling and disrupt patient access to care.

Coding teams face frequent edits and rejections driven not by clinical ambiguity, but by unclear or shifting payer expectations. Without centralized contract intelligence, each department develops its own interpretations, leading to duplicated effort and workflow inefficiency. Compliance risks grow as outdated rules persist in local processes, increasing exposure during audits. Financial performance becomes harder to predict, as inconsistent rule adoption introduces volatility into reimbursement outcomes. What begins as small operational frictions accumulates into substantial, recurring waste across the organization.

Solution: Trek Health’s Contract Intelligence

Addressing this challenge requires rethinking how organizations manage contracts and policies. Instead of treating payer rules as static documents that must be manually interpreted, Trek Health’s Contract Intelligence reframes them as structured data that can be operationalized. By ingesting and normalizing contracts, fee schedules, and policy updates into machine-readable formats, organizations can embed reimbursement logic directly into workflows rather than relying on human interpretation alone.

When paired with emerging transparency initiatives and open payer datasets, this approach enables a continuously updated, centralized source of truth. Systems can surface the right rules at the right time, automatically guide billing and authorization decisions, and propagate updates across departments simultaneously. Automation replaces manual lookups, reducing errors and eliminating redundant work. Rather than chasing policy changes, teams operate with real-time intelligence that supports consistent execution.

Strategic Implications: Cost, Access, and Workflow Transformation

The implications of this shift extend far beyond incremental efficiency gains. Automating one of the largest sources of administrative labor lowers overhead and allows organizations to redeploy staff toward higher-value activities. Faster authorization and fewer preventable denials help patients access care sooner, improving both experience and outcomes. Reduced friction across contracting, revenue cycle, utilization management, and coding streamlines operations and improves overall performance.

From a financial perspective, fewer errors and underpayments strengthen revenue integrity and create more predictable results. Importantly, organizations gain scalability: they can manage increasing payer complexity without proportional increases in headcount. Over time, contract intelligence has the potential to become foundational infrastructure for healthcare operations. By transforming contracts and policies into actionable intelligence, healthcare organizations have an opportunity to move beyond manual processes and build a more efficient, accessible, and sustainable system.

Be on the lookout for Trek Health’s newest paper quantifying this problem, scaled across organizations: from single provider practices to enterprise operations. In our paper, The Economics of Contract Intelligence: Quantifying Cost Savings & Revenue Lift for Payers and Providers, we expose where and how much you’re potentially leaving on the table by sticking with old practices.