Payer Non-Payment as a Public Health Crisis: Making the Case for a Broader Healthcare Response to Payer non-payments

A healthcare organization can have a powerful operational engine, but if its revenue cycle transmission is failing, eventually the entire organization loses its ability to move. The engine may still be running. Patients are being seen. Clinicians are delivering care. Administrative Employees are working. Claims are being submitted. From the outside, the organization may appear "operationally healthy". But beneath the surface, something critical is breaking down: the revenue generated from delivering care is not making its way back into the organization.

In healthcare, the revenue cycle serves much like a vehicle’s transmission: it takes the activity generated by the operational engine and converts it into the financial movement necessary to sustain the organization. The operational engine is made up of the people, infrastructure, technology, clinical services, administrative processes, and resources required to deliver patient care. When reimbursement flows as expected, those dollars can be reinvested into payroll, workforce development, technology upgrades, care expansion, infrastructure process improvement; and the communities the organization serves.

Much like a transmission, the revenue cycle is made up of interdependent components that must work together to keep revenue moving. These components include patient access and eligibility verification, authorization, clinical documentation, coding and charge capture, claim submission, payer adjudication, contractual payment accuracy, reimbursement, payment posting and reconciliation, denial management, accounts receivable follow-up, and revenue recovery.

When that financial transmission repeatedly breaks down month after month, the impact does not remain isolated within the revenue cycle. A disruption downstream, particularly at payer adjudication and reimbursement, can create financial pressure that travels back upstream into the organization’s operations. Over time, that pressure can affect staffing, workforce investment, technology, infrastructure, service capacity, and the organization’s ability to expand or maintain patient access. What begins as a reimbursement disruption can ultimately produce consequences outside the walls of the organization, affecting the behavioral health workforce, patients, families, communities, and the broader economy.

This exposes an important reality: the revenue cycle is not entirely within the provider’s control.

A provider and its administrative teams can perform every upstream function correctly, verify eligibility, obtain authorization, document care, code accurately, and submit a clean claim, yet the cycle can still break down when the payer fails to appropriately adjudicate and reimburse that claim. Much like a transmission can have functioning mechanical components but still experience failure when fluid is insufficient or cannot circulate properly, an otherwise healthy revenue cycle can lose financial momentum when reimbursement is disrupted.

Ultimately, without consistent reimbursement flowing back into the organization, even a strong operational engine cannot indefinitely sustain the people, infrastructure, and services required to deliver care.

But here is where the conversation gets bigger: At what point does payer non-payment stop being a revenue cycle problem and become a public health problem?

PAYER NON-PAYMENT CAN BECOME A WORKING-CAPITAL PROBLEM

When reimbursement is delayed or remains unresolved, the healthcare organization’s financial obligations do not stop simply because payment has not arrived. Payroll must still be met. Rent and leases remain due. Technology platforms, insurance, clinical infrastructure, vendors, contractors, taxes, and other operating expenses must still be funded.

The organization must therefore finance the gap between the cost of care already delivered and the reimbursement it has not yet received. The financial significance of an interruption in claims reimbursement is not merely theoretical. The federal government has recognized that disruptions in healthcare claims payments can create substantial cash-flow pressure for healthcare organizations.

A particularly instructive example occurred following the February 2024 Change Healthcare cyberattack. The attack disrupted the electronic infrastructure used to submit and process healthcare claims across the country. Importantly, this disruption was not caused by payer denial or wrongful non-payment, and should not be interpreted as evidence that payer denials caused the resulting financial distress. It does, however, provide a real-world illustration of what can happen when reimbursement for services is interrupted while the financial obligations associated with delivering those services continue.

In response, the Centers for Medicare & Medicaid Services established the Change Healthcare/Optum Payment Disruption Accelerated and Advance Payment program specifically to alleviate financial strain associated with disruptions in Medicare claims submission and payment. CMS ultimately issued more than $2.55 billion to over 4,200 Part A providers and approximately $717 million to 4,722 Part B suppliers, including physicians and other healthcare suppliers. CMS described these payments as a means of easing the cash-flow disruptions healthcare providers experienced following the interruption. Centers for Medicare & Medicaid Services The scale of that intervention is significant for understanding the economics of reimbursement disruption.

Healthcare organizations do not stop consuming resources simply because the flow of reimbursement has been interrupted. The financial obligation instead shifts: the organization must find another source of capital to sustain operations until reimbursement resumes.

The Change Healthcare experience therefore offers an important demonstration of the underlying financial mechanism, not of payer misconduct, but of working-capital displacement. When expected claims revenue does not arrive on schedule, healthcare organizations may need another source of liquidity to temporarily replace it. For CMS, that temporary source was accelerated and advance Medicare payments. In ordinary operations, however, healthcare organizations may have to rely on their own financial resources. A financially stable practice may initially use operating cash or reserves. Others may draw on a line of credit, obtain a business loan, receive additional owner contributions, restructure obligations, postpone hiring, delay planned expenditures, or defer investments in technology or expansion while reimbursement remains outstanding.

These mechanisms may protect employees and patients from immediately experiencing the consequences of payment disruption. But they do not eliminate the financial cost; they transfer it. Reserves absorb the disruption. Borrowing converts it into a financing obligation. Owner contributions shift the burden to organizational leadership. Deferred expenditures push investment into the future. And the longer reimbursement remains unresolved, the more consequential those decisions can become.

Eventually, some organizations may determine that all or part of an outstanding balance is no longer reasonably collectible and write it off. From an accounting perspective, the receivable may disappear from the balance sheet. Economically, however, the consequences of that missing revenue do not necessarily disappear with it.

There is also a forward-looking consequence. In that sense, the financial impact of payer non-payment is not limited to revenue that was lost in the past. It can also influence investment that does not occur in the future. But what happens when the financial capacity lost to non-payment begins affecting the people responsible for delivering care?

THE FINANCIAL HEALTH OF PROVIDERS AND THE HEALTH OF COMMUNITIES ARE CONNECTED

The financial health of healthcare organizations and the stability of the healthcare workforce cannot be examined as completely separate issues.

For employees, compensation is more than an organizational expense; it is part of the economic relationship between the worker and the organization. When that compensation becomes delayed or unreliable, the effects can begin influencing how employees engage with their work, manage their own financial obligations, and make decisions about whether to seek income elsewhere.

A 2025 study published in BMJ Global Health provides an important starting point. Among the healthcare workers studied, salary delays were associated with lower motivation and salary satisfaction, increased unauthorized absenteeism, and a greater likelihood of seeking outside employment. But there is another layer to this relationship that deserves attention: an employee remaining with an organization does not necessarily mean the workforce is stable.

Research from the IZA Institute of Labor Economics examining wage arrears, wages that had been earned but remained unpaid, identified what researchers described as a “bonding effect.” Although the study examined workers within a Russian manufacturing firm rather than a healthcare organization, the underlying labor-economic concept offers a relevant framework for understanding how delayed compensation can influence employee behavior, financial dependency, and eventual workforce separation across employment settings.

During an initial period of wage arrears, worker separation rates actually declined. Employees who were owed money had an incentive to remain connected to the employer while they waited to recover compensation they had already earned. That distinction is critical.

At first, financial disruption may not appear in traditional workforce metrics as turnover. The employee is still technically employed. The position is still technically filled. From the outside, workforce capacity may appear unchanged.

But beneath the surface, instability may already be developing. The BMJ findings help us see what that period can look like: decreased motivation, increased absence, and a greater likelihood of seeking outside employment. In other words, staying is not always evidence of stability.

An employee may remain while simultaneously experiencing financial pressure, supplementing income elsewhere, becoming less engaged, or questioning whether the organization can continue meeting its financial obligations.

The IZA research then shows what can happen when payment disruption becomes repetitive and confidence deteriorates. After workers experienced losses associated with the first episode of wage arrears, the researchers found that workers affected by subsequent arrears became substantially more likely to separate during and after the later repayment period.

This introduces an important progression:

Payment disruption → employee remains financially connected → financial pressure develops → supplemental employment or workforce disruption emerges → confidence deteriorates → risk of separation increases.

For healthcare, that progression raises a much larger concern. What happens when financial instability moves from the balance sheet into the workforce responsible for delivering care?

Because the loss does not necessarily begin on the day a clinician resigns.

It can begin much earlier, with declining motivation, divided employment, absenteeism, financial stress, and deteriorating confidence in the organization’s ability to provide economic stability.

And when separation finally occurs, the organization does not simply lose an employee.

The healthcare system potentially loses capacity.

For behavioral health organizations already operating within constrained provider markets, that distinction matters. Reduced clinical capacity can mean fewer available appointments, increased workload for remaining clinicians, longer wait times, and fewer providers available to meet community demand. This is the first point where the consequences of financial disruption begin moving beyond the organization, and toward the population it serves.

When workforce instability reduces an organization’s available clinical capacity, the next potential consequence is not difficult to identify: patients wait.

And in behavioral health, waiting is not necessarily a neutral period between requesting care and receiving it.

A 2018 study published in Health Economics examined waiting times within early-intervention psychosis services in England. Researchers found that longer waits were significantly associated with deterioration in patient outcomes 12 months after acceptance for treatment among patients who remained in early-intervention care. The effects were strongest when waiting periods exceeded three months. That finding changes the significance of a behavioral-health waitlist.

A waitlist is not simply an operational measurement of demand exceeding appointment availability. Behind every position on that list is a person whose behavioral-health condition continues to exist while access to treatment is delayed.

More recent research provides another perspective on what can happen when that access barrier is removed.

A 2025 study published in Psychiatric Services examined the elimination of a 702-person behavioral-health waitlist through a phase-based care model designed to prioritize new patients with higher-acuity needs.

Of the 702 people waiting for services, 614 attended triage clinics within 3.5 months, and patients identified as needing acute care entered treatment within two weeks.

Following implementation, researchers reported substantial changes in service utilization and organizational performance: behavioral-health visits increased 165%, behavioral-health evaluations increased 287%, no-show rates decreased 33%, behavioral-health revenue increased 29%, and the evaluated patients had 23% fewer non-behavioral health medical encounters per month.

The importance of these findings extends beyond the waitlist itself.

They illustrate how access, workforce capacity, healthcare utilization, and financial performance can intersect within the same behavioral-health delivery system.

Now trace that pathway backward.

If sufficient organizational capacity can help move hundreds of people from waiting into assessment and treatment, what happens when financial instability forces an organization in the opposite direction, reducing staffing, restricting capacity, limiting payer participation, or slowing expansion?

What begins as an unpaid or delayed claim can potentially travel much farther than accounts receivable.

Classifying payer non-payment through a public-health lens would fundamentally change how we measure its impact. Instead of looking only at denial rates, accounts receivable, underpayments, and provider financial losses, we would also examine its potential relationship to workforce stability, provider supply, network adequacy, wait times, continuity of care, health equity, healthcare utilization, and ultimately population-level outcomes.

Because once the consequences of non-payment begin affecting who can access care, where they can receive it, how long they must wait, and whether sufficient providers remain available to serve a community, we are no longer discussing a problem contained within the revenue cycle. We are discussing a potential threat to the infrastructure that makes behavioral healthcare accessible in the first place.

PROVIDER FINANCIAL INSTABILITY CAN BECOME A NETWORK INSTABILITY AND HEALTH EQUITY PROBLEM

A healthcare provider does not have to close its doors or leave the workforce for a community to lose meaningful access to that provider. There is another pathway through which financial pressure can reduce healthcare access: network participation.

A clinician may remain in practice while deciding that participation with a particular health plan is no longer financially sustainable. From the provider’s perspective, they remain part of the behavioral-health workforce. But for patients who depend on that insurance network, that provider may have effectively disappeared.

This distinction is critical: provider supply and accessible provider supply are not necessarily the same thing.

An insurance card may establish coverage for behavioral-health treatment, but coverage alone does not guarantee that enough in-network clinicians are available, accepting new patients, and financially willing to continue participating with the plan. Research suggests that payment conditions may be part of this equation.

A 2022 Health Affairs study examining Medicaid managed-care networks noted that lower Medicaid physician participation has been attributed, in part, to lower reimbursement and greater payment uncertainty, including time to payment and claim-denial rates. The researchers also found that approximately one-third of listed outpatient primary-care and specialist physicians saw fewer than ten Medicaid beneficiaries during the year. Care was heavily concentrated: 25% of primary-care physicians provided 86% of primary care, while 25% of specialists provided approximately 75% of specialty care.

In other words, being listed in a network does not necessarily translate into meaningful patient capacity. Federal behavioral-health research reinforces the payment-participation connection. HHS's Office of the Assistant Secretary for Planning and Evaluation has identified low reimbursement as a potential barrier to behavioral-health provider participation in health-plan networks. Conversely, the Medicaid and CHIP Payment and Access Commission has reported an association between higher Medicaid payment rates and greater physician acceptance of new Medicaid patients.

The network problem is already particularly visible in behavioral health.

A Health Affairs analysis of 531 Affordable Care Act Marketplace networks found that only 42.7% of psychiatrists and 19.3% of non-physician mental-health providers participated in any Marketplace network studied. On average, plans included just 11.3% of mental-health providers practicing within their state-level markets, compared with 24.3% of primary-care providers. And even those numbers may overstate realized access.

Another 2022 Health Affairs study compared Oregon Medicaid provider directories with providers who actually treated Medicaid patients. Researchers found that 58.2% of directory listings were "phantom" providers under the study's definition, including 67.4% of mental-health prescribers and 59% of non-prescribing mental-health clinicians.

A network can therefore appear adequate on paper while being functionally inadequate for the people attempting to use it.

Existing research does not establish that payer non-payment alone causes behavioral-health providers to leave networks. Participation is influenced by reimbursement rates, administrative burden, workforce supply, geography, practice structure, and other factors. But the evidence gives us reason to examine payment conditions as part of the network-adequacy equation.

If reimbursement and payment uncertainty influence provider participation, then persistent denials, underpayments, delayed reimbursement, and unresolved claims should be studied not only as revenue-cycle events, but as potential contributors to network instability.

This is also where payer non-payment begins to intersect with health equity.

Patients who can afford private-pay or out-of-network care may have alternatives when an insurance network contracts. Medicaid beneficiaries, lower-income patients, rural communities, and others with fewer alternatives may not. The equity concern becomes even more significant when we consider what patients can lose when meaningful access to healthcare providers becomes more difficult.

What do patients actually lose when they do not have meaningful access to primary care?

The consequences of reduced provider access are not unique to behavioral health. Primary care provides an important comparison because it is one of the primary points through which patients receive preventive services, chronic-disease management, screening, and early identification of health conditions before they require more intensive intervention.

A 2019 study published in JAMA Internal Medicine by Levine and colleagues provides an important example. Using nationally representative U.S. data, researchers compared adults with and without primary care. After adjusting for measured demographic and clinical differences, adults with primary care were significantly more likely to have received a routine preventive visit and multiple forms of recommended high-value care.

Seventy-eight percent of adults with primary care received recommended high-value cancer screening compared with 67% of adults without primary care. The differences were particularly pronounced for colorectal cancer screening and mammography. Adults with primary care were also more likely to receive blood-pressure screening, influenza vaccination, recommended diagnostic and preventive testing, and high-value diabetes care.

The significance of these findings extends beyond primary care itself. They demonstrate that access to healthcare providers is one of the mechanisms through which healthcare infrastructure becomes preventive healthcare. When meaningful access contracts, what may be lost is not simply an appointment slot. Opportunities for screening, early detection, chronic-disease management, counseling, and prevention may be lost with it.

Population-level research provides an additional reason to take changes in provider capacity seriously.

A separate 2019 JAMA Internal Medicine study by Basu and colleagues examined primary-care physician supply and mortality across U.S. counties between 2005 and 2015. Researchers found that greater primary-care physician supply was associated with lower population mortality. Because this was an observational study, the findings should not be interpreted as evidence that the loss of an individual provider directly causes mortality. Rather, the study provides broader population-level evidence that the availability of primary-care infrastructure is associated with community health.

Taken together, these studies help illustrate why provider-network stability is more than an administrative or contractual concern. Levine and colleagues demonstrate what meaningful access to primary care can provide at the patient level: greater receipt of screening, preventive services, and recommended care. Basu and colleagues demonstrate that primary-care supply itself is associated with population-level health.

That distinction becomes particularly important when evaluating payer non-payment. The argument is not that a delayed or denied claim directly causes a poor clinical outcome. The concern is the pathway through which repeated financial disruption can potentially travel: if payment conditions contribute to providers restricting network participation, reducing capacity, or leaving financially unsustainable markets, the consequences can eventually reach patients through a reduction in meaningful access to care.

And those consequences may not be distributed equally. Communities with fewer financial resources, fewer providers, greater dependence on public insurance, or fewer realistic out-of-network alternatives have less ability to absorb the loss of accessible provider capacity. What begins as a financial problem between a payer and a healthcare organization can therefore become something much larger: a network-adequacy problem, an access problem, and ultimately a health-equity concern.

CONNECTING THE DOTS: FROM PAYER NON-PAYMENT TO POPULATION HEALTH

The evidence explored throughout this article begins to reveal a larger pathway:

Payer non-payment → provider financial instability → workforce and operational pressure → reduced provider and network capacity → restricted access → potential population-health consequences.

The argument is not that every unpaid claim produces a poor health outcome. The question is whether persistent and systemic payment disruption can create cumulative effects that extend beyond the revenue cycle and into the healthcare delivery system itself.

Existing research helps establish individual connections within this pathway. What remains less understood is how these effects connect longitudinally, beginning with payer non-payment and following the impact through the provider, workforce, network, patient, and community.

That is where JLW Medical Management Consulting intends to contribute.

JLW Medical Management Consulting is developing the Payer Impact Systemic Surveillance Evidence Dashboard (PISSED) to help investigate this hypothesis.

Traditional revenue-cycle analytics tell us what happened to the claim: how much was denied, delayed, underpaid, appealed, recovered, or written off. PISSED is designed to take the investigation one step further: What happened because the money did not arrive?

The dashboard will track payer-payment patterns alongside potential downstream indicators involving organizational financial pressure, workforce capacity, network participation, patient access, and other measurable impacts. The purpose is not to begin with the conclusion that payer non-payment is a public-health crisis. The purpose is to build the evidence necessary to determine whether, and under what circumstances, it becomes one. PISSED represents JLW Medical Management Consulting's effort to begin following the unpaid dollar beyond the claim and measuring the broader consequences that traditional revenue-cycle data may not capture.

How does the broader healthcare system work together to prevent and ultimately eliminate this problem?

What responsibility should payers have beyond simply processing claims?

What role should CMS, state Medicaid agencies, Departments of Insurance, public-health agencies, and policymakers play in monitoring the downstream consequences of persistent payment disruption?

Should network-adequacy oversight examine not only how many providers are contracted with a plan, but whether reimbursement conditions allow those providers to remain meaningfully accessible?

Should payment systems automatically identify claims approaching statutory or contractual payment deadlines and trigger stronger accountability, including interest, penalties, escalation, and regulatory reporting when appropriate? And should public-health surveillance begin considering provider financial stability as one of the upstream conditions capable of influencing healthcare access? These questions require a broader healthcare response.

If we are serious about strengthening the behavioral-health and broader healthcare workforce, expanding access, improving health equity, and building sustainable provider networks, then we must also be willing to examine what happens when the organizations providing that care are not reliably paid for delivering it.

To learn more about JLW Medical Management Consulting, LLC and our revenue

recovery services visit us by selecting the link below or the red button to be redirected to our home page. www.jlwmedicalmh.org.

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