In light of the COVID-19 pandemic and the moratorium on elective procedures, hospitals are trying to minimize financial impacts by cutting staff hours, temporarily closing hospital departments, and utilizing furloughs and laying off nonmedical personnel in revenue cycle departments.
The pandemic’s effects on revenue cycle operations include:
- Disruption and decrease of cash flow
- Smaller workforces to submit and follow-up on claims to payers in a timely manner
- Increase in uninsured and underinsured patients
- Increase in patients who are or will become eligible for Medicaid and financial assistance, such as charity and discounted care programs
- Potential negative impact on loan paybacks and Medicare Advance Payment program recoupments
Health care organizations should be preparing for the impact of these effects on their financial status and future cash flows by focusing on the management of revenue cycle operations.
Below, we outline four steps health care organizations can take to help bolster revenue cycle management operations after COVID-19 subsides.
1. Understand and develop procedures.
It’s important to understand and develop procedures around newly-emerging billing and collections guidelines as a first step.
Since the beginning of the COVID-19 crisis, Medicare and other payers consistently revised their coding, billing, and reimbursement procedures.
Many of these revisions are time-sensitive and applicable only within certain periods. Some revisions are retroactive and will require re-billings to receive the correct payment.
It’s essential that billing procedures are developed to properly bill and collect accounts receivable generated before, during, and after the pandemic.
2. Educate and redeploy staff.
Revenue cycle staff will need to be educated in newly-emerging coding, billing, and reimbursement guidelines.
Special focus should be provided within the payer processing guidelines that vary based on time periods.
Plan to evaluate your staffing complements and redeploy resources for both COVID-19 and non-COVID-19 patients accounts in line with:
- Patient volumes
- Payer mix
- Outstanding receivables
Financial Performance Benchmarks and Predictions
In light of the billing changes, rules and regulations, payer policy changes, and shifting patient volumes, key indicators should be used and report trends should be run on a regular basis to address the changing receivables landscape.
To assist your analysis, your organization should plan to:
- Revise bad debt reserve models and future cash predictions on a monthly basis.
- Develop solutions to address cash flow shortages and disruption in the collections process.
- Track and trend payer mix fluctuations and regulatory changes.
Providers that received advance Medicare payments should develop a strategic plan and implement procedures to properly record recoupments that will begin after 120 days.
3. Upgrade your procedures for uninsured and underinsured patients.
With millions of Americans out of work, the volume of uninsured and underinsured patients will increase.
This impacts future services provided by health care organizations, in addition to patients who currently have open liabilities owed to the facility for previous services and might no longer be able to honor those payment obligations. Other patients who received a bill and intended to pay might now need to prioritize paying other bills.
Many patients might not be aware of coverage options, so your staff should prepare for increases in requests for financial assistance.
Consider updating your hospital collections policy and financial assistance policy to include provisions for temporarily unemployed patients and small business owners.
4. Monitor governmental and payer websites for updates.
Medicare and other payers are updating their policies and procedures to respond to COVID-19.
Payers are changing authorization, patient transfers to various levels of care, and plan notification protocols for specific time periods.
Some changes in revenue codes require new codes that need to be on claims for certain dates of service in order to receive payment. Additionally, some claims need to be submitted retroactively, while other claims will be automatically reprocessed by payers.
Adding to these changes, patient liabilities could potentially be waived by payers. It’s important to monitor all these changes for proper claims adjudication.;
As Medicare and other payers revise billing regulations and requirements in these turbulent times, it’s important to remember that once the pandemic subsides, regulatory organizations will audit again for compliance.
We’re Here to Help
Upfront planning and implementation in response to the COVID-19 payer changes will allow health care organizations to collect their claims and maintain cash flow as business returns to normal economic activity.
To learn more about how your organization can manage its revenue cycle operations, contact your Moss Adams professional.
For regulatory updates, strategies to help cope with subsequent risk, and possible steps to bolster your workforce and organization, please see the following resources: