How Covid-19 will impact the financial outlook for the health care industry
Background
For most hospitals and health systems, the costs associated with canceling elective procedures will far outweigh the revenue generated from Covid-19 patient care. Advisory Board's analysis found that elective cancelations will leave a big financial hole—a typical system will lose roughly $145.3 million in quarterly revenue. Comparatively, a moderate Covid-19 scenario will generate $31 million in quarterly revenue—not nearly enough for organizations to stay afloat. Maximizing reimbursement under Covid-19 requires intense focus on revenue capture across the entire revenue cycle. It is critical to develop a Covid-19-specific strategy, starting with updating the chargemaster, providing training on new CPT and HCPCS codes, mitigating Covid-19 denials, and understanding how payers have altered policies around preauthorization and out-of-network definitions.
Phase I: Mitigate the cash crunch
Covid-19 has exposed and exacerbated the preexisting weaknesses many institutions grapple with across the revenue cycle. Margin pressures, complex reimbursement contracts, payer mix shifts, and workforce constraints aren't new problems for most leaders; however, Covid-19 has pushed them into overdrive.
To help, our revenue cycle team identified the following seven mandates for addressing Phase I of this challenge: decreasing the cash crunch caused by Covid-19. Keep an eye out for future research on Phase II and Phase III considerations to optimize revenue cycle operations throughout and beyond Covid-19.
Resource: How Covid-19 will impact disruptive market entrants
7 top priorities for revenue cycle leaders
Revenue cycle leaders should focus on seven strategies:
- Double down on accounts receivable by redeploying staff to revisit accounts receivable work queues and identifying opportunities to collect revenue.
- Adjust the patient financial experience during these difficult times by waiving missed appointment fees, suspending collection calls, and extending payment plans.
- Reallocate revenue cycle staff to high utilization departments to accommodate patient need.
- Design your Covid-19 claims strategy to flag and monitor all claims associated with Covid-19 care to better evaluate reimbursement and patient obligations.
- Improve debt position and reevaluate bond covenants and associated risk.
- Partner with stakeholders across the system to confirm reimbursement implications for managed care and identify fundraising efforts through philanthropy.
- Prioritize payment accuracy to maximize reimbursement opportunities.
Want more information?
Download our research note to learn more about maintaining the financial health of your institution by bolstering your revenue cycle operations. Keep an eye out for future research on Phase II and Phase III considerations to optimize revenue cycle operations throughout and beyond Covid-19.