Trends and Revenue Cycle Strategies to Mitigate the Impact of COVID-19 and Improve Long-Term Stability and Financial Resiliency

by | Nov 16, 2020

As we move into the winter months, COVID-19 continues to surge in communities across the country. It is particularly challenging for hospitals and health systems that were already struggling to maintain financial stability prior to the pandemic. With recent spikes in cases, hospitals that weren’t impacted early on are now approaching or surpassing full capacity. Organizations that were on their way back to normal volumes have been hit with a new wave of cases. There’s even talk of stopping elective procedures again, although no orders have been passed at this time. While impending vaccines should help bring the pandemic to an end, it will take time. Distribution will happen in phases and will likely require two doses three to four weeks apart.[1] The point is that the financial fallout from the pandemic could last well into 2021 or beyond.

What can hospitals do now to safeguard existing revenue streams while ensuring long-term financial resiliency? Following are best practices for mitigating the impact of the pandemic and to inform a more future-forward strategy for long-term stability and financial resiliency.

Keep employees engaged

COVID-19 has taken a toll on the mental health of individuals across the globe. For healthcare workers on the front lines, the impact has been incredibly hard.[2] But even workers not on the front line have been affected, especially those forced to work remotely. Isolation and “pandemic fatigue” can lead to disengagement and reduced productivity. One of the best ways to mitigate the impact on remote employees is to implement processes and tools that remove barriers and improve social connectedness.

  • Ensure employees can participate in video meetings by providing external video cameras to those without video capabilities on their laptops.
  • Offer tools such as instant messaging to allow for real-time communication.
  • Include remote associates in meetings with onsite teams.
  • Provide time during virtual meetings where employees can share what’s going on in their lives, just as they would during onsite meetings.
  • Find ways to recognize and reward remote employees for hanging in there during difficult times.

Enhance the patient financial experience and improve self-pay receivables

Patients have been hard-hit through the loss of jobs and employer-sponsored healthcare. When it comes to choosing between paying utility bills and putting food on the table or paying a medical bill, the former will take priority. Hospitals that use aggressive collections tactics—especially now—risk damaging the hospital’s reputation and the provider-patient relationship. Plus, aggressive tactics rarely achieve optimal results.

  • Ensure your patient registrars understand they are the face of your hospital and that first impressions set the stage for the entire experience.
  • Educate patients about their financial responsibility and provide them an overview of the costs along with an estimate of what portion they will be responsible for.
  • Be an advocate for your patients by helping to identify opportunities for financial assistance.
  • Offer flexible payment plans that align with the patient’s unique financial situation now and that can be changed as their situation changes.
  • Make sure your collections staff realizes how a positive patient financial experience reflects on your hospital’s brand identity and patient satisfaction ratings.

More than 60% of consumers say they would switch healthcare providers for a better financial experience.[3]

Shore up your denials management process

Every penny counts in these difficult times. Although many hospitals believe denials are unavoidable, they can be greatly reduced with just a few changes. For example, the majority of denials are due to the patient not being eligible for the service provided.[4] This can be avoided by using patient access technology to identify eligibility prior to or at the time of registration. In fact, technology is the key to preventing denied claims and for better managing those that do occur.

  • Verify patient coverage at or before registration and share that information with patients.
  • Implement claims automation technology to identify coding errors or missing information before a claim is submitted to the payer.
  • Stay on top of payer changes for timely filing deadline and documentation requirements.
  • Don’t neglect small-dollar denials, which can quickly add up over time and are often low-hanging fruit.
  • Leverage software to easily identify codes and claim history to streamline the denials research and appeals process.

[CALLOUT] Hospitals lose an estimated $3.5 million each year in denial-related costs.[5]

Have the right partner in place

Many hospitals and health systems use outsourcers for portions of their revenue cycle processes, especially self-pay collections. This option can bring even greater value during difficult times, such as these. But not all outsourcers are created equal, and it can be challenging to rate their performance; most use their own methods for reporting results, and those methods typically skew in their favor. In fact, an analysis conducted by Healthfuse of more than two billion hospital accounts found more than 50% of self-pay vendors were non-compliant with best practices, SLAs, or government regulations. Lack of transparency, lack of data, or simply a lack of time to manage those relationships can be a real challenge for hospitals, especially now. The best vendors are those that:

  • Work alongside existing hospital staff as an extension of the team,
  • Understand their impact on the hospital’s reputation,
  • Take ownership in the patient relationship,
  • Leverage technology to measure their effectiveness and validate results, and
  • Are open to feedback and training.

What’s next

A recent article by McKinsey & Company reports that COVID-19 could “depress healthcare industry earnings by between $35 billion and $75 billion compared with baseline expectations.” The same article states, “Question everything about your role in healthcare and future business model as your organization transitions from ‘wartime’ to ‘peacetime.’”[6] It’s not enough to hang on until the pandemic passes. Hospitals must look for ways not just to survive but also to thrive. Taking a new approach to the revenue cycle can help them do just that.