At hospitals and health systems across the country, revenue cycle leaders are finding solutions to problems brought on by the new coronavirus epidemic.
How Covid-19 will impact the financial outlook for the health care industry
Advisory Board's Revenue Cycle Advancement Center last week held a small group network session with revenue cycle leaders along different points of the Covid-19 curve to share their strategic initiatives. The diverse group of attendees engaged in a nuanced conversation about the top challenges facing revenue cycle leaders during the country's new coronavirus epidemic, and revealed how they are responding. Below are four top-of-mind issues for revenue cycle leaders.
1. Claims adjudication has slowed, and payer communication is lacking.
Across the board, attendees have experienced slowed claims adjudication, with one leader citing a 10-day lag in payments. Some report that payers cited increased volumes as the cause, but that has garnered skepticism (most health systems are seeing at least a 30-40% reduction in volumes and claims). Continuous changes to codes and modifiers also make it difficult for both revenue cycle staff and payers to stay up-do-date, exacerbating delays.
Delayed and/or confusing communication also hamper the billing and claim adjudication process. Revenue cycle leaders also noted that payer policies vary quite a bit, and change frequently, indicating that payers potentially made public commitments they may not have been ready to deliver on.
2. Socialize performance expectations today.
Performance on critical revenue cycle metrics will likely decline significantly when compared with 2019 performance. Revenue cycle leaders must identify which metrics will see the most significant performance differences from pre-Covid performance and/or projections, and begin to socialize that reality with other health system executives. Understanding when and how metrics will change both in the short-term as well as medium- and long-term is critical to avoiding unwelcome surprises, and accurately planning and budgeting through the pandemic and beyond.
It's also important to explain which metrics will be most impacted, and when. Bad debt may lag well behind other indicators as the uninsured rate continues to increase, while days in accounts receivable may have seen a welcome reduction in the short-term as revenue cycle staff focused on existing claims.
3. A virtual workforce offers fixed cost reduction opportunities.
While outsourcing, automation, and virtual work have all been debated and considered among revenue cycle leaders, those that moved toward remote work pre-Covid have been well-positioned to maintain productivity and engagement levels among staff. Revenue cycle departments that built a remote workforce from the ground up saw a four-week lag as they overcame policy and IT barriers. Despite upfront challenges, it is likely that remote revenue cycle work will continue into the post-Covid epidemic era. Along with increased staff satisfaction comes a significant reduction in required office space, allowing systems to repurpose—or even sell—real estate assets.
4. Telehealth is here to…
Well, that depends on which revenue cycle leader you ask. Leaders were split on whether the demand for telehealth will continue at the level it's seen during this first Covid-19 wave. With lingering questions around telehealth reimbursement and regulations, it is not clear that it will remain financially viable. As widespread use of telehealth continues, it is imperative that revenue cycles adapt the patient financial experience, billing, and claims adjudication process.
Revenue cycle action items to mitigate the Covid-19 cash crunch
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.