February 11, 2026

Managing Risk in the Mid-Revenue Cycle: When Staffing Helps and When Another Solution is Needed

How health system leaders reduce variability, protect margin, and avoid surprises

The mid-revenue cycle is one of the most significant sources of financial risk in healthcare. Performance depends on streamlined, collaborative workflows and the right tools to ensure documentation quality, coding consistency, and manage volume volatility.

Traditionally hospitals address this risk with hybrid workforce models: internal teams supported by external coders, CDI specialists, auditors, and denials resources. This approach is necessary and effective for maintaining throughput and continuity.

The strategic question executives are now asking is not whether to use staffing, but whether staffing alone is sufficient to manage risk. To answer that question, it helps to be clear about what staffing is designed to solve — and what it is not.

Staffing: Effective for Capacity Challenges

Staff augmentation is well-suited to mitigate capacity-driven risk. It helps organizations:

Maintain production during vacancies or leaves
Absorb volume swings and backlog pressure
Access specialized expertise

When risk is caused by insufficient coverage, whether short-term or longer, staffing is the right answer. Challenges emerge when capacity is no longer the primary constraint, but performance outcomes remain inconsistent.

Staffing often becomes the default solution. It’s familiar, safe, comfortable. But it is not designed to redesign workflows, strengthen collaboration, or drive ongoing optimization. By design, augmented resources operate within existing workflows, quality standards, and governance structures. As a result, risks and opportunities for improvement often persist.

What Staffing Doesn’t Solve:

Augmenting your staff solves capacity challenges, but doesn’t reveal risks that might exist such as:

Inconsistent coding and documentation interpretation
Preventable downstream denials caused by program breakdowns and educational needs
Cost structures tied to volume rather than performance
Leadership time consumed by operational oversight and not root cause problem resolution
Workflow inefficiencies

Capacity may be only one of your challenges. Your primary risk may not be rooted in having enough people, but how consistently the work is performed and the process in which you are performing it. When inconsistency and optimization becomes the dominant challenges, organizations often need a different operating approach.

Managed Services: A Solution for Variability and Optimization

Managed services addresses variability risk by shifting accountability from filling a seat to outcomes-based focus.

Rather than just supplying capacity, a managed services partner provides:

Standardized quality and accuracy frameworks
Consistent guideline application across teams
Embedded governance and performance transparency
Continuous optimization as volumes and payer behavior change

For executives, this transforms the mid-revenue cycle from a staffing-dependent function into a more predictable and efficient operating model. At that point, the success of managed services depends as much on mindset as it does on structure and partnership.

Managed Services Works Best as an Operating Partnership

Managed services delivers the most value when it is approached as a long-term operating partnership, not a short-term solution. The goal is stability first, followed by sustained improvement as workflows, quality standards, and governance mature over time. Meaningful results are achieved through continuity, shared accountability, and a clear understanding that performance gains compound and create stability with time. They are not instantaneous. Organizations that are willing to embrace a long-term comprehensive approach are better positioned to realize consistent outcomes, improved predictability, and operational alignment. That said, managed services works for many organizations, but is not the only way to achieve greater discipline and visibility. Each facility has nuanced challenges where models and approaches depend on change management and goals.

Maintaining Control While Improving Transparency

While there are many benefits to a managed services partnership, many organizations choose to retain significant in-house ownership of mid-revenue cycle functions.

For those organizations the priority should be visibility and alignment. Periodic assessments, supported by regular audits provide objective insight into structure, workflows analysis, tools, and performance. These reviews are especially valuable when the organization undergoes change, such as a system implementation, workforce shift, or evaluation of new technologies like AI. A consistent assessment cadence keeps internal operations optimized, performance transparent, and leadership informed — reducing reliance on assumptions and enabling more confident decision-making. Ultimately, the right next step depends on the specific challenges an organization is trying to solve for.

Should I Take Any Action?

The answer is that it depends on the problem you are trying to solve and the risk you are mitigating. Staffing ensures coverage. Managed services ensure control and optimization.

Both play an important role — but they mitigate different types of risk.

As margin pressure intensifies, the most resilient organizations are aligning the right operating model to the right risk and managing the mid-revenue cycle with greater discipline and predictability. The most resilient organizations treat objective, periodic assessments as a core discipline, regardless of operating model."