TL;DR: The ROI of revenue cycle automation for a NextGen multi-specialty group equals hours saved per task times monthly volume times loaded staff cost, plus recovered revenue from fewer denials and faster A/R. For most groups, payback depends on volume and on which tasks you automate first. Build the case from your own baseline data, not a vendor's average.
If you're a CFO or administrator at a multi-specialty group on NextGen, you've probably been asked to justify automation to a partner group or board. "It saves time" won't survive that meeting. A simple, defensible model will.
How do you calculate the ROI of revenue cycle automation?
Start with two buckets: cost savings and revenue gains.
Cost savings come from labor hours you no longer spend on repetitive tasks. The formula is:
Hours saved per month = tasks per month × minutes saved per task ÷ 60
Monthly labor savings = hours saved × loaded hourly cost of the staff doing the work
"Loaded" means wages plus benefits, payroll taxes and overhead. A common rule of thumb is to add 25 to 35 percent to base wages, but use your own HR numbers.
Revenue gains come from fewer preventable denials, faster authorizations that avoid canceled or delayed procedures, and quicker follow-up that pulls cash forward. These are harder to forecast, so model them conservatively.
Then compare total annual benefit to total annual cost, including software fees, implementation and the staff time spent reviewing the agent's work.
What does the math look like task by task?
The figures below are illustrative. They're not Honey Health customer data, and your numbers will differ. Use them as a template.
Eligibility and benefits verification. Suppose your group verifies 3,000 patients a month, and manual checking takes about six minutes each. That's 300 hours a month. If automation handles 80 percent of those checks with no manual touch, you save around 240 hours.
Prior authorization. Suppose you submit 600 authorizations a month, and each takes roughly 25 minutes across the request, documentation and status checks. That's 250 hours. If automation cuts the hands-on time by half, you save about 125 hours.
Denial follow-up. Suppose staff work 800 denials a month at about 20 minutes each, or roughly 267 hours. If triage and packet preparation cut that by 40 percent, you save around 107 hours.
Payment posting. Suppose posting non-standard remittances and EOBs takes 60 hours a month, and automation handles most of it. You save perhaps 40 hours.
Add those up: about 510 hours a month in this example. At a loaded cost of $30 an hour, that's roughly $15,300 a month, or about $184,000 a year, before any revenue gain. Swap in your own volumes and times.
How do you estimate the revenue side?
Be careful here, because this is where business cases get inflated.
Start from your own denial data. If you have 800 denials a month and a typical rework recovers some share of them, even a modest reduction in preventable denials matters. A group that prevents 5 percent of its denials and recovers more of the rest faster has real cash impact, but the amount depends on your claim values and payer mix.
Also consider:
- Faster authorizations. Fewer delayed or rescheduled procedures means fewer lost slots and less revenue leakage.
- Fewer write-offs. Better appeal tracking and deadline management turn some timely-filing losses into collected revenue.
- Reduced days in A/R. Faster follow-up improves cash flow, which has a financing value even if the revenue was always going to arrive.
Our advice: count labor savings as your base case and treat revenue gains as upside you'll validate in a pilot. That framing holds up better with a skeptical partner group.
What costs belong on the other side of the ledger?
A fair model includes everything it takes to get the benefit:
- Software fees. Per-transaction, per-provider or subscription pricing, depending on the vendor.
- Implementation. Setup, integration with NextGen, and configuration for your payers.
- Review time. Staff time spent checking the agent's output, especially early on.
- Change management. Training and workflow adjustments.
- Ongoing oversight. Someone needs to own exception queues and monitor performance.
Don't forget the honest limit: complex appeals, peer-to-peer reviews and unusual payer behavior still need people. Your savings come from shrinking the routine work, not from eliminating the team.
How long does payback take?
Payback depends on volume and scope. Groups with high volumes of eligibility checks, authorizations and denials tend to see faster payback than low-volume ones, because the savings scale with transactions while some costs are fixed.
A reasonable approach is to model three scenarios: conservative (half the time savings you expect and no revenue gain), expected, and optimistic. If the conservative case still pays back inside your hurdle period, the decision gets easy. If only the optimistic case works, narrow the scope or negotiate a pilot.
Use the first 90 days to test your assumptions. Measure hours per task and denial rate before and after, and update the model with real data. That turns a projection into evidence you can show your board.
What soft benefits should you include?
Some benefits don't fit neatly in a spreadsheet but matter to leadership:
- Staff retention. Repetitive portal work contributes to burnout, and turnover in billing and front-desk roles is expensive to replace.
- Scalability. Automation lets you absorb volume growth, new locations or acquisitions without adding headcount at the same rate.
- Patient experience. Fewer delays in authorizations and cleaner billing mean fewer frustrated patients.
- Data visibility. Structured logs of what was checked and when make audits and performance reviews easier.
List these in the business case, but don't assign dollar values you can't defend.
Honey Health offers agents for eligibility, prior authorization, denial management and payment posting that work alongside NextGen, which makes it straightforward to cost each workflow separately and pilot the one with the best payback first.
Frequently Asked Questions
What is a typical ROI for revenue cycle automation?
There's no reliable universal figure, because results depend on your volumes, staff costs and payer mix. Build your own model from baseline data and test it in a pilot rather than relying on vendor averages.
How do I calculate the cost savings from automation?
Multiply tasks per month by minutes saved per task, divide by 60 to get hours, then multiply by your loaded hourly staff cost. Subtract software, implementation and review costs to find net savings.
Should I include revenue gains in the ROI?
Yes, but treat them as upside. Labor savings are easier to measure and defend. Revenue effects from fewer denials and faster A/R are real, but validate them with your own data during a pilot before counting on them.
How long until automation pays for itself?
It varies with volume and scope. High-volume groups often see faster payback. Model conservative, expected and optimistic cases, and use a 90-day pilot to confirm your assumptions.
Will automation reduce my billing headcount?
Most groups use it to absorb growth and shift staff to exceptions, appeals and payer relationships. Some reduce overtime or temp labor. Decide your approach upfront so the business case matches your plan.
Which task has the fastest payback?
It depends on your data, but eligibility verification and denial follow-up are common starting points because they involve high volume and repetitive work. Rank your tasks by hours spent and dollars at risk, then pilot the top one.
