Another day, another spate of dire revenue outlooks for hospitals large and small. The COVID-19 crisis is clearly a medical crisis and a financial one as well. In a recent report, the American Hospital Association (AHA) estimated that the total financial impact of COVID-19 on expenses and revenues for hospitals and health systems from March 1 to June 30, 2020 is $202.6 billion in losses –an average of over $50 billion a month. According to the Advisory Board, a typical 1,000-bed hospital system with a moderate surge in COVID-19 patients will lose 50 percent of its quarterly revenue.
In an interview with NPR, Rick Pollack, AHA president and CEO, described the situation as a triple whammy.
“We have the increased expenses that have been incurred in terms of preparing for the surge and caring for the COVID patients,” Pollack explained. “And then we have the decreased revenues associated with having shut down regular operations in terms of scheduled procedures. You combine that with the increased number of uninsured as a result of the economic situation, and you’ve got a triple whammy there.”
Consequently, this triple whammy means it is even more important for healthcare organizations to establish financial resilience with Revenue Cycle Management (RCM) and capture every dollar they can to make up for revenue deficiencies. While furloughs and reduced pay are already being utilized in many organizations, there is more that hospitals and healthcare systems can and must do.
3 Tips to Financial Resilience with a Hospital Revenue Cycle Management Solution
- Start with the right RCM solution. Even before the pandemic hit, many hospitals lacked an effective RCM solution and often utilized outdated manual processes that contributed to poor cash flow. The road to RCM resilience starts with a solid RCM that includes a core patient accounting and billing foundation.
Today’s market mantra is that any existing patient accounting system gets the job done—hospitals just need bolt-on solutions to fill in any gaps. Unfortunately, this is false as too many bolt-ons cause significant interoperability and workflow issues. One of the most important things a hospital can do is to make sure financials are on solid ground with a robust RCM solution that optimizes efficiencies, meets the greatest number of needs, eliminates the need for bolt-on solutions and maximizes reimbursements.
WHAT DO YOU REALLY NEED IN AN RCM SOLUTION?
- Patient accounting and billing that is fully integrated and has interwoven modules with no required dependencies
- Denial tracking that addresses and resolves denials in a timely manner with denial notifications and reports to help analyze patterns of claim denials
- Integrated claims resolution that utilizes a fully automated, workflow-driven process for resolving tasks upfront via automated claims edits versus traditional free-standing scrubbing software
- Patient payment portal to make it easier for the patient to pay in a variety of ways, ensuring faster payments
- Business intelligence and advanced analytics, including executive dashboards, dynamic work queues, and reports that allow key decision makers to easily and effectively analyze and act upon crucial patient service and financial data
- Service Level Agreements (SLAs) should be an integral part of the software offering, implementation and support for any RCM solution to ensure high quality, consistent performance
- A Software-as-a-Service option, which offers many advantages: faster implementation, affordability, little or no upfront costs, easier upgrades
- Ensure you have an efficient patient payment strategy in place. Patients have already seen their healthcare costs skyrocket over the past few years due to high deductible health plans. Now, estimates show over 5 million people across the U.S. have become uninsured after experiencing job losses due the pandemic and economic decline. This likely means they will have a harder time paying out-of-pocket costs. By offering flexible payment options—interest-free payment plans, the ability to pay through mechanisms like ApplePay or a portal—the likelihood of timely payment will increase to the benefit of hospitals. Also, automated eligibility verification in an RCM solution enables providers to capture current eligibility data at every encounter and determine the patient’s copay responsibility upfront.
- Keep abreast of new and evolving billing guidelines and payer expectations. Temporary payment parity for virtual care visits through Medicare and Medicaid. Varying virtual care coverage (often at lower rates) for commercial payers. Relaxed requirements for providers offering virtual visits across state lines. A 20 percent add-on payment for services related to treating Covid-19 for Medicare. All of these things and more impact the revenue cycle and need to be accounted for to maximize Covid-19 reimbursements. Proposed increases to Medicare inpatient and outpatient payment rates for fiscal year 2021 could also impact revenue in a positive way.
- As Rick Pollack says, “Hospitals are facing perhaps the greatest challenge that they have ever faced in their history.”
- Hospitals need to act now to address their RCM issues for long-term viability.
- The ongoing pandemic has amplified the need for automation and modern technologies to minimize revenue leaks, achieve financial health, and create RCM resilience.
- To truly excel in revenue cycle management, you must have a cohesive patient accounting and billing solution foundation to successfully lower costs, while improving on financial accountability and rapid collections of monies owed by the patient and payer.
- Updating patient payment strategies and staying up-to-speed on billing guidelines and payer expectations are also necessary parts of the RCM resilience equation.
2021 and Beyond
If there’s anything that we’ve learned from 2020, it’s that what comes next could be something we’ve never imagined. That’s why it’s important for healthcare organizations to build resilience with their revenue cycle management now. Those organizations that effectively manage their revenue cycle will be more likely to persevere through whatever may come next.
Considering a new RCM solution to help you achieve financial resilience? Medsphere’s RCM Cloud helps healthcare organizations drive resilience and sustained profitability through a combination of knowledge, solutions, experienced RCM experts that act as an extension of your organization, SLAs, and an economical SaaS model (with no upfront fees).
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