Artificial intelligence (AI) is transforming radiology practices through improved diagnostic accuracy, efficiency, and patient care. Just as it analyzes images for subtle patterns and anomalies, AI is emerging as an essential tool for streamlining billing, increasing efficiency, and maximizing collections.
CEOs, CFOs, practice managers, billing leaders, and practice owners must stay ahead of emerging trends to remain competitive, efficient, and profitable. Every radiology practice should watch closely to navigate the AI challenges and opportunities of 2025 while understanding the hidden costs of billing automation since not all revenue cycle management (RCM) platforms are the same.
From regulatory adjustments to technological advancements, the radiology industry is experiencing rapid changes that are reshaping how practices operate and deliver care. Among the five to watch in 2025 are:
- Medicare Cuts and Declining Reimbursement Rates – Declining reimbursement rates continue to hamper specialty physician practices, and radiology is no exception. Medicare’s 2025 payment schedule includes a 2.8% cut to the conversion factor, further squeezing margins for radiology providers. To put this in perspective, while radiologists performed 13% more relative value units (RVUs) between 2005 and 2021, inflation-adjusted conversion factors fell by nearly 34%. With other payors often following Medicare’s lead, radiologists are being forced to do more with fewer resources, which places increasing financial strain on small and mid-sized private radiology practices.
- Radiologist Shortages and Burnout – Compounding the financial challenges is the growing shortage of radiologists. With increasing demand for imaging services, radiologists are working longer hours to keep up, leading to higher rates of burnout. The combination of workforce shortages and declining reimbursement creates a difficult situation where practices must find ways to maintain efficiency without overburdening their teams.
- The Rise of Consolidation and Corporatization of Radiology – With economic pressures mounting, more independent radiology practices are considering mergers, acquisitions, or outright sales to large corporate entities. While consolidation offers financial stability and operational support, it can also lead to a loss of autonomy for radiologists who prefer to maintain control over their practices. Some hospitals are also responding to financial pressures by bringing radiology services in-house, eliminating contracts with independent radiology groups. This shift threatens the viability of smaller practices that rely on hospital partnerships for a significant portion of their revenue.
- Regulatory Challenges: The No Surprises Act and Prior Authorization – Regulatory compliance remains a significant hurdle for radiology practices. The No Surprises Act, aimed at protecting patients from unexpected medical bills, continues to add administrative complexity. The Independent Dispute Resolution (IDR) process has helped some radiology groups challenge out-of-network payment disputes, but it also increases paperwork and delays payments. Meanwhile, cumbersome prior authorization processes remain a major bottleneck for radiology services.
- AI Innovation Meets Regulation – AI-powered imaging tools are becoming more prevalent, offering efficiency gains in image analysis and diagnosis. However, with AI adoption comes increased regulatory scrutiny, as governing bodies seek to establish standards for accuracy, bias mitigation, and clinical validation. Radiology practices must carefully vet AI solutions to ensure they meet emerging compliance requirements and do not inadvertently introduce liability risks.
Billing automation is often marketed as the solution to reduce administrative burden and accelerate reimbursement in the revenue cycle. In theory, it should seamlessly process claims and reduce denials. The reality, however, is that some systems are designed to handle straightforward claims but struggle with complex or specialized cases commonly seen in radiology, such as high-cost imaging studies, interventional procedures, or multi-modality billing.
These exceptions are often kicked out of the automated workflow, requiring manual intervention. If not managed properly, this can lead to increased denials, delayed payments, and even patient dissatisfaction. Incomplete automation leads to hidden costs due to inherently complex radiology billing, including:
- High exception rates due to multiple modifiers, detailed medical necessity requirements, and varying payor policies. Incomplete automation fails to effectively manage these complexities, leading to a high rate of exceptions.
- Manual intervention caused by claims that do not cleanly pass-through automation can overwhelm billing teams and cause denials and appeals to fall through the cracks.
- Operational inefficiencies and workflow disruptions caused by rigid billing automation workflows may not adapt to the nuanced needs of your practice, leading to inefficiencies and increased likelihood of errors.
- Limited analytics and decision-making insights prevail without advanced reporting and analytics that effectively track key performance indicators (KPIs), including accurately gauging overall financial performance, evaluating payor-specific reimbursement rates, and measuring the impact of referring physicians.
Billing automation can provide efficiency and cost savings, but only if it fully supports the practice’s complexities. Hidden costs from—high exception rates, manual intervention needs, workflow disruptions, and limited analytics—can significantly impact the practice’s profitability and patient satisfaction.
Thriving in 2025
Practices must consider new strategies to mitigate these financial pressures, such as optimizing RCM processes, leveraging AI-driven workflow automation, and exploring alternative reimbursement models.
The radiology industry is poised for ongoing transformation in 2025, driven by evolving regulations, technological advancements, and changing market dynamics. By staying informed and proactive, radiology practices can leverage these trends to enhance operational efficiency, improve patient care, and maintain financial stability. As these five trends continue to shape the landscape, forward-thinking practices will be well-positioned to thrive in an increasingly competitive healthcare environment.
About Rob Carfagno
Rob Carfagno, a radiology operations expert with over 25 years’ experience leveraging analytics and financial acumen, is Vice President, Radiology Operations at XiFin, Inc., a leader in revenue cycle management (RCM) and billing solutions enhanced with embedded artificial intelligence (AI) for radiology practices.
