These are uncharted waters for the healthcare industry as our providers work to combat the novel coronavirus. While the most important and immediate concern is the safety of healthcare workers on the frontlines of patient care, we expect downstream effects to the healthcare revenue cycle and other financial operations. It’s difficult to pinpoint exactly how the revenue cycle will be impacted by this pandemic; however, our revenue cycle practice experts have identified a variety of challenges that we anticipate our hospital and health system clients to encounter.
Beyond the political and macro-economic factors surrounding this global COVID-19 outbreak, we highlight some key indicators of a challenging revenue cycle landscape and our recommendations on how to respond.
A New Virus to Treat
While this observation is apparent to healthcare and non-healthcare professionals alike, the revenue cycle impact may not be so obvious. With the identification of a new virus, comes an influx of new ICD-10-CM codes (i.e., Diagnosis Codes) that hospitals and health systems must incorporate into their revenue cycle operations.
Limited guidance has been provided around billing and coding on the testing and treatment of COVID-19. This leaves hospitals and health systems to choose between billing claims today, with a high likelihood of coming back as a denial for billing/coding errors, or leaving claims in discharged, not final billed (DNFB) until receiving clear direction on billing and coding standards.
Not to mention, hospitals and health systems run the risk of receiving experimental denials on submitted claims, as an antiviral medication nor a standard of care have been established for this new virus.
- Frequently monitor CMS and Commercial Payer updates to ensure your revenue cycle is operating with the latest and greatest billing and coding information.
- Collaborate with local hospitals and health systems to share knowledge and methods on the COVID-19 response.
A Shift in Service-Mix
It is no surprise that service-mix plays a significant factor in hospital and health system revenues. We’ve seen a heavy shift in service-mix, as non-urgent or elective procedures have been postponed allowing for additional capacity to treat patients with COVID-19. Hospitals and health systems are already feeling the financial impact of this shift, and we anticipate further downstream impacts to cashflow. With healthcare labor costs averaging at over 50% of revenue, many hospitals and health systems have already started to furlough non-clinical staff members in order to reduce expenses.
As hospitals and health systems continue to feel the financial squeeze of this pandemic, revenue cycle and financial leadership will need to discover ways of accelerating cash during this COVID-19 surge, and after the surge subsides.
- Engage revenue cycle resources to increase collections effort, and strategically work down receivables to accelerate cashflow.
- In preparation for the wave of elective procedures post-COVID, begin optimizing your scheduling system to seamlessly match supply (Providers) and demand (Patients) for elective procedures.
- As hospitals and health systems transition back to ‘business as usual’, high-dollar surgeries should be prioritized to accelerate cashflow.
Managing Your Remote Workforce
Many healthcare business offices were unprepared for an abrupt shift from an onsite team to a remote workforce. Many staff members were not equipped with laptops, further complicating this transition. With several uncontrollable factors impacting today’s revenue cycle key performance indicators (KPIs), including cash, revenue cycle leadership needs a heavy focus on factors that can be controlled. Two areas that revenue cycle leadership can focus on to improve revenue cycle KPIs are staff quality and productivity metrics.
Through daily monitoring and measuring of staff performance, revenue cycle leadership can determine where to focus staff training and education efforts. Active employee performance measurement equips hospitals and health systems with the ability to identify trends within the workforce and the outliers. Specifically, performance measurement can be used to identify which employees are due for a raise, or a promotion.
- Establish a structured daily check-in for staff; this will allow leaders the opportunity to offer motivational and emotional support, as well as receive status checks on progress and workload.
- Implement quality and productivity programs to actively monitor and measure performance of business office staff. Cerner and Epic reporting features include productivity reports, which can be aggregated over time to provide insightful trends on staff performance.
Compromised Revenue Integrity
Many hospitals and health systems are in the process of converting non-acute-care beds (i.e., Rehab, Skilled Nursing Facility, etc.) to acute-care beds temporarily to increase overall capacity for COVID patients. This process is not as simple as it sounds - with clinically driven revenue cycle EHR systems (i.e., Epic, Cerner, etc.), many build changes are required to ensure orders are transferring to the appropriate billing codes. If the build changes were not incorporated correctly, there is a high likelihood that the revenue integrity division will be negatively impacted.
Revenue cycle leadership should evaluate their current revenue integrity division to evaluate the risk of revenue leakage. The revenue integrity division can perform audits on these temporary beds assess revenue leakage, and react accordingly.
- Start performing revenue integrity audits around the temporary changes that have been implemented, due to COVID-19. (i.e., ensure the EHR build for temporary beds is built properly and not causing revenue leakage)
Colin Batherson is Associate Director, Revenue Cycle Operations for Healthcare IT Leaders. As an RCM transformation consultant, Colin has led comprehensive payment reviews for several large hospital systems, while advising on the development and implementation of centralized billing and revenue cycle analytic programs.