Blog Post

Navigating the Revenue Cycle through COVID-19

Navigating The Revenue Cycle Through Covid 19 Web

COVID-19 testing, treatment, and prevention permeate the news today. Healthcare leaders share concern for the industry’s response to this public health crisis but also must account for the realities of our third-party payer system and revenue cycle construct. Updates and modifications are provided by the government and payers on a near-daily basis, resulting in the need for a rapid response from busy executives.

ECG has identified five areas that financial and revenue cycle management must focus on as they work to stabilize near-term financial health.

1. Coding and Reimbursement

With decreases in elective volumes, shifts in payer mix, and coding and billing requirements changing frequently, maximized reimbursement should be top of mind for healthcare executives. Address the following areas to optimize reimbursement and operational efficiency:

  • Coding and Billing: In addition to a rise in COVID-19-related inpatient care, healthcare organizations have now expanded delivery of nonemergent outpatient care via telehealth. Medicare and all other major payers are releasing new coding, billing, and reimbursement guidelines to address the growth in these service types, which revenue cycle management must constantly monitor and implement in real time. ECG has summarized these requirements in our Coding and Billing Resource Guide.
  • Charge Capture: As many payers are reducing patient liability for COVID-19-related testing and inpatient services, as well as increasing eligible telehealth services, organizations’ historical methods for charge capture may not be adequate to maximize billing and collections in the current environment. Ensure your organization’s chargemaster is updated so that clinicians can select the most appropriate billable service, and educate providers on supporting documentation requirements.
  • Payer Relations: Insurance and provider alignment is critical to ensuring a patient-centric focus and appropriate reimbursement. Many payers are requiring that specific place of service, modifier, and diagnosis code information be furnished, and these requirements are constantly evolving. To remain up to date and compliant:
    • Schedule or maintain at least biweekly meetings with all major contracted payers to guarantee a platform is in place to receive updates, raise concerns, ask questions, and maintain regular communication.
    • Prioritize the review of all payer bulletins through a designated internal resource.
    • Understand and document any evolving unique payer requirements. Additional information on national commercial payer policies can be found in ECG’s blog post COVID-19 Commercial Payer Policy Updates: Coverage, Testing and Telehealth.

2. Insurance Receivables Management

ECG’s blog post 5 Tactics to Drive Cash Flow in Response to COVID-19 acknowledges providers’ need to accelerate revenue. Healthcare delivery executives understand that the entire US healthcare industry has been affected by the pandemic, which also extends to third-party payer organizations. As a result, revenue cycle leaders must utilize a two-pronged strategy to resolve outstanding A/R incurred prior to the pandemic and new A/R, which will accrue as a result of COVID-19:

  • Modify your approach to resolving pre-COVID A/R. The current-state reality dictates that a reduction in outpatient services and elective admissions will inevitably lead to a reduction in A/R while orders to reduce non-urgent/-emergent cases remain in effect.
    • Identify existing A/R that requires minimal intervention or follow-up from the payer and ultimately generates positive A/R relief (i.e., a payment). This includes targeting clean claim rates and specific low-effort denials.
    • Most organizations have a backlog of A/R that requires timely attention, typically due to high volumes or staffing constraints. With a decrease in services, focus on this aged A/R to keep staff productive and ultimately accelerate revenue.
  • Target maximization of reimbursement on revenue-generating services. Following the initial surge, organizations can expect to see a drop in gross receivables, coupled with a spike in A/R attributable to telehealth- and COVID-19-related encounters that payers may be unprepared to immediately process and adjudicate.
    • Identify and isolate payers that are unable to effectively operate at this time. Where appropriate, remove this A/R from active staff work and escalate it in bulk with payer representatives.
    • Utilize payer communication forums that have been put in place to conduct timely conversations to rectify identified A/R increases and trends.
    • Promptly revisit your A/R days calculation, as pre-COVID-19 and current-state charge and receivable volumes could be dramatically different.

3. Self-Pay Receivables Management

Patients are experiencing financial difficulties, and healthcare organizations must have a strategy in place to direct changes to the self-pay collections process in order to address patient and organizational needs.

  • Configure a strategy that incorporates empathy and flexibility for all patients.
    • Proactively communicate this strategy to the community to promote transparency and a patient focus.
    • Ensure the adopted policy is also readily available at the time of patient admission or check-in.
  • Create an organizational strategy specific to self-pay balances that have accrued prior to and/or are unrelated to COVID-19 services (e.g., suspend agency collections, suspend all collections, adjust balances in full, issue bad debt write-offs, understand cost report impact).
  • Determine a clear understanding of patient financial liabilities with regard to COVID-19 services.
  • Determine how various technologies can be used (e.g., expand payment options, telephony capabilities) to increase patient convenience, reduce labor, and minimize other overhead expenses.

4. Remote Work Strategy

While healthcare providers are considered essential service workers and can report to their place of work, most organizations have already transitioned non-patient-facing revenue cycle staff to a work-from-home (WFH) setting. Remote work presents a unique set of opportunities and challenges; in the near term, take the following steps to maximize operations in this new model:

  • Confirm that both the organization and all remote staff members have the appropriate tools and technology in place to complete all job duties and functions.
  • Determine which functions must remain on site. Some business office functions must be conducted in person (e.g., patient and payer mail correspondence, charge and payment posting). Organizations must ensure the safety and health of employees who cannot perform their jobs at home while continuing to identify manual processes that can be transitioned to remote work (e.g., electronic remittance advice enrollment, scanning solutions for paper-based processes). These changes will increase efficiency and reduce the number of staff working on site.
  • Modify communication methods to ensure that all staff are engaged, productive, and informed.
    • Schedule regular staff check-ins and maximize the use of video.
    • Ensure productivity tracking and quality reviews occur.
    • Refine or introduce new policies and procedures to ensure HIPAA compliance.

For additional specific information on WFH strategies, read ECG’s blog post COVID-19: Deploying a Remote Revenue Cycle Workforce.

5. Revenue Cycle Coordination with Finance Stakeholders

Coordination between revenue cycle leaders and the finance and accounting departments is critical to guarantee that organizational budgets and financial statements represent an accurate picture of financial health for informed strategic decision-making.

  • Financial statements may include atypical metrics that could reflect:
    • Dramatic shifts in payer mix.
    • Increases in bad debt.
    • Fluctuating A/R.
    • Impacts to historical contractual adjustments.
  • To the extent possible, financial analysts should integrate the above revenue cycle–related impacts while modeling projected changes in service mix, volumes, payer reimbursements, and net revenue due to the pandemic.
  • While obvious, it is critical to ensure that all charges, payments, and adjustments are reconciled, posted, and completed prior to the month-end close process, which drives the organization’s monthly financial statements. These key tasks should be accommodated in your remote work strategy.

Revenue cycle management should work closely with finance staff to ensure that financial executives understand the root cause behind these shifts as or before they occur. This will help the finance team accurately budget and forecast for the future.

Take Charge in Defining Your Revenue Cycle’s Response

Revenue cycle leaders must take appropriate steps now to respond to the current crisis. With little advance warning, stop-gap measures were likely introduced to continue operations and drive near-term cash flow. As we enter a postsurge environment with some near-term stabilization in sight, leaders need to evaluate their organization’s initial response to the crisis and refine any policies, processes, or structures that were rapidly introduced during the early stages of the pandemic. Healthcare executives must acknowledge our current realities and begin to consider immediate, near-term, and long-term strategies to fully optimize revenue cycle performance in a postsurge—and ultimately, post-COVID-19—environment.