Across the country, hospitals and patients have cautiously rescheduled surgeries and postponed doctor visits in an effort to minimize contact with coronavirus. Low patient volume has led many providers and billing companies to make the difficult decision to furlough or lay-off employees, leaving their revenue cycle processes understaffed and vulnerable to mistakes. As Americans and hospitals resume elective care procedures, providers and billing companies may find themselves unprepared to manage the sudden surge.
Here are three critical areas we think every hospital and billing company should focus on improving during the time leading up to America's reopen.
1. Prioritize Benefit Verification
Do you use software and automation tools as your main benefit verification method? If your answer is yes, we hate to break it to you, it will not be enough. Many practices and hospitals rely solely on technology to manage this job; however, the details are lacking. Most practice management systems, patient accounting systems and payor websites will only state whether a policy is active or not - that’s it.
Picking up the phone and calling insurance companies is necessary in most cases to gain insight on a patient's copay information, coinsurance details and deductible balances. This will provide a much clearer picture into how much a payor will be reimbursing or how much will be the patient's responsibility.
Now, let us pivot to the pandemic and its effects on benefit verification. According to the Department of Labor, over 20 million Americans have lost their jobs and with that, their health insurance coverage. Even if an individual lost their coverage and has since acquired new coverage, benefit information will need updating.
It is important to note, If a patient's coverage has changed, then their insurance deductible has likely been "reset". This means a heavy shift of financial responsibility will fall on the patient rather than the payor. Not verifying or updating benefit information will cause significant reimbursement delays, especially if a claim is submitted to an incorrect payor. In addition, there will need to be an emphasis on patient collections (self-pay) due to lack of coverage and new deductibles.
2. Establish Rock Solid KPIs.
We all know the reimbursement cycle is extremely segmented and every piece plays a vital role in completing the entire puzzle. That being said, be cautious if your organization is structured to where employees perform distinct billing tasks rather than working the entire claim. If your billing staff is well-versed in their specific job function but not the entire revenue cycle, you may be susceptible to mistake. This becomes an even bigger problem if you do not have the metrics in place to track revenue cycle performance.
Having strong Key Performance Indicators (KPIs) will help your organization pinpoint and monitor trouble spots and make the appropriate adjustments.
Five KPI's you should be tracking now:
- Net Days in Accounts Receivable
- Cash Collection as a % of Net Patient Services Revenue.
- Claim Denial Rate
- Final Denial Write Off as a % of Net Patient Service Revenue
- Cost to Collect
Mistakes happen, that is inevitable; however, being able to remedy them quickly will help replenish your organization with the revenue it has been missing.
3. Hire More Billing & Coding Staff
COVID-19 has had a devastating effect on the financial health of U.S. Hospitals. According to a report from the American Hospital Association, it is estimated:
"U.S. nonfederal hospitals stand to lose approximately $161.4 billion in revenue over a period of four months, from March to June 2020. This includes cancelled surgeries, various levels of cancelled non-elective surgeries and outpatient treatment, and reduced emergency department services."
Despite this jaw-dropping estimate, there is hope. The need for patient care did not disappear; people need to get back to their doctors. Someone who postponed their knee replacement surgery, still needs a knee replacement. At what volume and rate will patients return to their previously scheduled procedures? That has yet to be determined, but we predict it will be a tidal wave. Do you have the staff in place to keep up with the demand? If not, what are your hiring strategies and how many employees can you afford?
According to the Bureau of Labor Statistics, the median rate for medical billing and coding services is $18.83 per hour. This does not include benefits, taxes and operational costs for each employee. You also need to consider the time it takes to find, interview and train your new hires.
Many hospitals and billing companies may find it necessary to look for outside help by offshoring their revenue cycle work. It is a cost-effective and expedited way to grow your workforce. The average time to fully ramp-up an offshore team is 30 days with average claim turnaround times at 24 hours. This may be your best bet to recapture the lost revenue from the past four months.
To see just how cost-effect offshoring can be, use our RCM Savings Calculator for an approximate look. Skeptical of offshoring? We broke down the myths surrounding a global business model here. You can also download our free checklist of questions to ask your offshore candidates to help you narrow down the right partner for you.
A surge of non-COVID related patient care is on the horizon and we predict major backlogs and reimbursement delays, especially for hospital and billing companies that have had to downsize their staff over the last four months. Do not miss this opportunity to recapture the $161.4 billion hospitals are estimated to have lost from cancelled procedures and outpatient care since March. We suggest you put all hands on deck to improve these three areas to maximize your reimbursement cycle:
- Prioritize Benefit Verification: 20 million Americans have lost their jobs and most likely their coverage and automated verification is not enough.
- Establish Rock Solid KPIs: Strong KPIs will help you address and adjust problem areas more quickly. This is especially helpful if you have staff that perform distinct billing tasks rather than work the entire claim.
- Hire More Billing & Coding Employees: With an impending spike in elective care, this is an opportunity to recapture lost revenue from the past four months. Do you have enough revenue cycle employees to manage your processes? If not, you will be more susceptible to costly mistakes. Offshore RCM firms offer very cost-effective options to grow your workforce.