The COVID-19 pandemic carries unprecedented challenges for our health care system.
While hospitals are currently addressing testing and treatment challenges of COVID-19, changes to health plan policies are taking place that will affect hospital collections and financial viability in the upcoming months.
Many health insurers have announced they are waiving co-pays and deductibles for COVID-19 patients. There is confusion regarding both the announcements and how providers will navigate the application, billing, and collections processes within their revenue cycle.
In this time of uncertainty and complexity, organizations may want to consider assembling a small task force to optimize revenue cycle operations. They should be aware of and assess all programs available to them, learn the application process, and gather the necessary documentation to apply.
Models will need to be customized to track claims, receivables, and predict cash flow.
Below are key considerations for providers and c-suite and revenue cycle leaders as they mitigate the financial stress of their revenue cycle during COVID-19.
For most third party insurers, this applies only to COVID-19 patients for:
For self-insured plans, the employer may choose whether or not to waive testing co-pays and deductibles for self-insured patients.
Some providers will be paid at out-of-network, in-network, Medicare, or Medicaid rates. It remains unclear how payers will handle the differences of COVID-19 cases at full reimbursement, while non-COVID-19 cases are to be paid contracted rates less deductibles and co-pays.
You can anticipate decreased cash collections due to:
Organizations should review their current revenue cycle procedures and revamp policies as needed to address patient liabilities.
Work queues need to be reassigned or altered.
Cash flow projections and rolling forecasts should be revised to account for the rising numbers of uninsured patients.
Strong revenue cycle management policies and procedures and active monitoring will be essential to manage from the back-end and allow organizations to plan for the future.
This could be a deceptively difficult issue and involve integral considerations your revenue cycle department must undertake.
In order to properly account for COVID-19 patients vs. non-COVID-19 patients, organizations could take the following steps:
If you’ve separated patients into two different pathways—COVID-19 and non-COVID-19—your staff will need to track definitions of cash flow, bad debt, and reimbursement based on these distinctions.
By having dedicated teams assigned to each subset, your staff could become well versed at handling these cases.
Try to put the following elements in place as quickly as possible:
Further diversification could be achieved by assigning specific collectors and analysts to each major plan, so they are familiar with payer reimbursements and rates.
Ongoing monitoring of key metrics could be tracked using calculations and projections based on the different subsets to create rolling cash flow forecasts.
Cash flow is a major concern for organizations during this time as elective surgery volumes have decreased, or been halted all together, and emergency rooms and intensive care units are overflowed with COVID-19 patients.
Ideally, the revenue cycle department could get claims processed and paid quickly and efficiently, but that’s not a reality for many. Organizations are turning to advanced payment programs to merge the gap.
While this could be a viable option to free up cash flow, your organization should consider the eventual reconciliation process. There could be a disparity between what you were owed and what you were paid. Careful documentation should be kept if you choose to go down this path.
Due to the COVID-19 pandemic, organizations should prepare for the inevitable increase of uninsured patients. Cash flow projections should be altered to account for this influx.
Organizations will need to make decisions about how they are going to address uninsured patients while continuing to be a steward of health amid COVID-19 and rising health costs.
For example, they’ll need to decide how aggressively they plan to go after insurance companies should coverage be lost, and then consider potential coverage alterations. Additionally, they’ll need to think about how they want to communicate this information to the patients themselves.
If you have any questions regarding your revenue cycle, please contact your Moss Adams professional.