Active documentation as a revenue strategy in 2026

Across the U.S., hospitals are facing immense financial pressure. Labor costs are rising, reimbursements are falling behind, and patient complexity is growing – leaving organizations searching for every dollar of recoverable revenue.  

The financial squeeze  

The financial squeeze hospitals face is mostly out of their control: workforce shortages, inflation, supply chain disruptions, and tariffs. Meanwhile, reimbursement rates have failed to keep pace with inflation. In 2023, Medicare paid hospitals only 83 cents for every dollar spent on patient care, resulting in more than $100 billion in underpayments, according to the American Hospital Association (AHA). From 2022 to 2024, general inflation rose 14.1%, while Medicare inpatient payment rates increased only 5.1%.¹ 

In fact, IMO Health’s own data analysis from 12.8M patient records shows $3.04B in reimbursement risk tied to unaddressed hierarchical condition categories (HCCs) that reduce risk-adjusted payments. Now more than ever, it has become pivotal for hospitals to document the full value of care they deliver.   

At the same time, hospitals are treating more complex patients, many of whom have chronic conditions like type 2 diabetes, renal failure, and heart disease, which drives the cost of care.¹ On top of that, hospitals face a mounting administrative burden in managing their denied claims cycle. As hospitals navigate rising costs and slower reimbursement growth, accurate and complete documentation has become a legitimate revenue strategy.

The hidden impact of clinical data 

A patient’s record serves as a concise, clinically meaningful summary that supports care coordination and decision-making. Beyond clinical purpose, this data reveals both operational strength and financial opportunity. In the same analysis, IMO Health’s findings indicate that addressing documentation and coding inaccuracies could yield a $1.58B revenue uplift across hospitals.

Take, for example, the patient’s problem list – where hierarchal chronic conditions are commonly recorded. According to IMO Health’s analysis, 74% of patients have at least one HCC that goes unaddressed on the problem list. Additionally, 37% of all problem list diagnoses are unspecified. Both scenarios are related to undercoding, which results in lower reimbursement amounts due to incomplete documentation.

Furthermore, IMO Health’s data shows 28% of visit diagnoses are unspecified, which directly affects claim accuracy and frequently results in queries or the denials cycle – a reflection of increasing payer focus on coding precision. According to the AHA, 70% of denied claims were eventually paid, but only after multiple costly reviews.¹ Too often, mounting administrative burden and rising costs from denials put a massive strain on hospitals.

It’s essential to recognize that complete and accurate patient documentation is the foundation of financial health – and among the easiest ways to reclaim lost dollars.  

What hospitals can do now 

Strengthening clinical documentation starts with strong clinical terminology – the language that links patient care to coding, billing, and reimbursement. Clinical documentation should use clear, consistent terminology that aligns with coding and regulatory standards (like ICD-10-CM, SNOMED CT®, and HCC categories). When clinicians select precise, structured terms at the point of care, downstream coding becomes more accurate, reducing queries, rework, and denials.

Integrated problem list tooling can improve HCC capture without adding burden to provider workflows. When problem lists are clean, standardized, and free of clutter, they provide strong documentation required for claim submission – helping to boost higher reimbursements and better risk adjustment performance.

When it comes to stopping denials before they start – clinical terminology plays a vital role. Intelligence coding tools that deliver logical code, actionable code corrections, and enriched data reduce clinical burden, streamline mid-cycle processes, and optimize revenue.  

The key takeaway

When it comes to managing costs, some factors are beyond our control; however, hospitals can control their documentation. By trusting in standardized terminology that connects clinical language to the right codes and powers intelligent clinical workflow solutions – costly documentation gaps and operational headaches can be avoided.

Learn more about proactive revenue cycle management in our insight brief: Stopping the cycle of denials, rework, and write-offs for higher ROI.