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5 Tactics to Drive Cash Flow in Response to COVID-19

5 Tactics To Drive Cash Flow In Response To Covid 19 Web

As our country’s healthcare system combats COVID-19, another battle—on the financial front—is consuming providers. Previous financial budgeting assumptions have largely been thrown out the window with the cancellation of elective procedures, patients avoiding doctor’s offices, and loss of employer-based insurance coverage due to job cuts. In addition, since COVID-19 care thus far has disproportionately affected Medicare patients, healthcare organizations are anticipating a significant financial squeeze.

The following five tactical measures will help healthcare organizations improve cash flow during the pandemic and emerge from the crisis in better financial shape:

Request government funding and support, including advance Medicare payments and state Medicaid waivers.

On March 27, Congress passed and President Trump signed into law the CARES Act, which allocates billions of dollars for healthcare systems. Hospitals will get a 20% add-on payment for inpatient care for COVID-19 patients. Additionally, the bill also allows more hospitals, including critical access hospitals and cancer centers, to request advance Medicare payments based on prior-year payments and pay them back over at least 12 months. This advance payment is intended to help offset the impact of delays in elective surgeries caused by the requirements of the COVID-19 response. ECG has developed a CARES act calculator to help your organization determine the magnitude of the potential relief under that act.

Additionally, CMS has approved Medicaid waiver requests under Section 1135 of the Social Security Act for 29 states (as of March 27). These waivers offer greater flexibility in how resources are utilized for Medicaid beneficiaries, including bypassing some prior authorization requirements, temporarily enrolling out-of-state providers, delivering care in alternative settings, and pausing fair hearing requests and appeal times.

Account for COVID-19 and telehealth shifts in your A/R strategy.

Define the billing indicators and CPT codes required to isolate COVID-19 claims in accounts receivable (A/R) inventories. This may include setting up COVID-19–related codes in your CDM, ensuring resources have information required to appropriately code for these services, and putting in place bill edits to supply relevant billing modifiers. Taking these measures now will allow for quick access to your COVID-19 cases in support of potential government and third-party pandemic response settlements.

The revised A/R strategy should also account for increases in telehealth visits and determine ongoing support of these accounts. Telehealth coverage has been greatly expanded during the COVID-19 response in the short term and appears poised to take on a larger role in patient care going forward.

Finally, providers should ensure the approach taken to traditional A/R maximizes resource utilization through focus on the following priorities (in order of importance):

  1. Accounts approaching timely filing deadlines
  2. High dollar claims
  3. Special projects or “quick hit” opportunities
  4. Low balance strategy to free up potentially scarce resources

Incorporating these measures will allow you to pursue a backlog reduction strategy and project the financial time frame of returning to a “new normal.”

Institute a proactive approach to staff management.

Pursue “real time” volume monitoring to respond quickly to changing billing and collection requirements. Additionally, seek opportunities to cross-train staff across payers and services to bolster flexibility in response to anticipated volume fluctuations. Considering the potential for large settlements or grouped account adjudication, the ability to quickly pivot existing staff will be essential to reducing backlogs and maintaining performance. This approach also has positive implications for management of remote employees.

Augment A/R coverage with short-term vendor support.

In the event of extreme backlogs or staff shortages, relying on existing or new collection vendor relationships can help alleviate risk. Be it from extreme volume shifts or other changes requiring rapid ramp-up of support staff, a defined vendor strategy can target relief in the near or extended term, depending on organizational need. This approach is particularly pertinent in areas hard hit by rapidly escalating infection rates. Flexibility in staffing from resources in other parts of the country can be precisely tailored for tactical support.

Ensure clear lines of communication with major payers.

Enhance engagement with payers to seek creative ways to collaborate on the COVID-19 response:

  • Seek near-term suspension of filing requirements for those major contracts with the most stringent filing deadlines.
  • Gauge approaches for cash flow relief, such as catch-up payments in the short term (e.g., special projects, COVID-19 claims).
  • Utilize prior-year payments to project reimbursement shortfalls.
  • Follow Medicare guidance on telemedicine to ensure continued coverage in both the short and long term.
  • Identify opportunities to revise or eliminate patient-portion requirements for COVID-19 visits.
  • Request advance payments based health systems’ and payers’ shared goal to cover the patient population throughout the continuum of care.

The cash flow implications of COVID-19 on hospitals and health systems have already been significant. Being flexible in your approach and nimble with course corrections will be paramount in weathering the certain cash flow storm ahead.


Contact us with your questions and concerns about how to address the COVID-19 crisis.

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