By Todd Davis, Director of RCM, InSync Healthcare Solutions
Healthcare organizations are still feeling the aftershocks of 2020, when revenue cycle management (RCM) took a major hit at the onset of the coronavirus pandemic. The economic fallout and job losses resulting from COVID-19 impacted health coverage for millions of Americans, and left organization billing and collections teams scrambling to adapt.
They’re still trying to regain lost ground.
The challenges are even steeper for many specialized medical practices, such as physical therapy practices and ambulatory surgical centers, due to the enormous number of postponed visits and surgeries in the first half of 2020. According to a Medscape study, only 28% of primary care physicians and 32% of specialists who lost pay in 2020 have seen it restored. A separate Health Affairs study estimated a gross revenue loss in U.S. primary-care practices of $67,774 per full-time primary-care physician in 2020.
Given these setbacks, specialists will need to pay closer attention to their billing and collection practices — and policies for the indefinite future.
What’s needed is a new approach to RCM that’s patient-centered, yet proactive. Practices need to be sympathetic to patients’ day-to-day healthcare coverage and payment concerns, while also ensuring they’re not incurring bad debt.
Glimpse of Future Challenges
Before implementing changes, it’s important to understand what challenges remain in practice operations, and how they’ll potentially impact operations long-term, beyond late 2021 and early 2022.
For example: The rise in joblessness amid pandemic forced more patients to pay out of pocket for medical care. This has undoubtedly slowed down operations in 2020, but the effects will be ongoing. As patients struggle to pay for visits that were once covered by health plans, write-offs could become more common – and debt could rise to unsustainable levels.
Another example: Patients who postponed care in 2020 due to COVID-19 may be racing back to doctor’s offices – but the care and services they will require will be different. This is concerning, because many of the patients who needed screenings and preventive care will now need costlier treatments for diseases and conditions that were not identified in 2020.
One recent article on cancer patients who delayed screenings in 2020 sheds some light on how avoiding preventive care led to rising costs down the line, when small Stage 1 cancers advanced too quickly for simple treatments to remain an option. Should a practice find a substantial number of its patients needing more intensive care, the threat of more intensive medical debt — from unpaid claims — could follow.
Incidentally, a study from LendingTree found that the number personal loan inquiries to pay for medical expenses was 50% higher in the last week of 2020 than it was in the same period in 2019.
Going forward, practices need a new game plan for their operations, with emphasis on proactively improving eligibility, prior authorization, payments, collections, and so forth. Here are five actions specialist practices should employ to ensure their RCM runs smoothly, and patients have the care and service they need.
- Increase eligibility and authorization checks.Avoid problems with payments on the back end by ensuring patients are covered at multiple touchpoints: when they book their appointments and again at check-in. Because insurance coverage could fluctuate with a patient’s employment status and health plan, the once-routine process of checking eligibility is twice as important. If a patient lacks prior authorization for an encounter, or a procedure, a practice can arrange other payment options (instead of sending a bill later, and potentially incurring debt).
- Collect payment information in advance. Most practices estimate patient co-payments ahead of time, but don’t always charge patients before the visit. Collecting credit card information prior to appointment tells patients that they will be responsible for whatever portion of a medical bill isn’t covered by insurance and can speed up payment of unexpected charges.
- Enhance transparency. Consumers expect to know what they’ll pay for a service or procedure up front, especially with specialty care: Knowing how much they’ll pay out of pocket for gastric bypass surgery or a torn ACL, for example, can inform their scheduling decisions. Ensure that financial information is clear: According to one recent study, 49% of patients said having clear information on expected out-of-pocket costs before receiving treatment impacts their decision to use a healthcare provider.
- Analyze financial KPIs on the regular. The only way to know how your practice is performing is to benchmark its progress. But if this is only done once a quarter, practices might not catch a problem (e.g., denials linked with a common code for more than two payers) before it escalates and drags down a practice’s performance in one or more financial key performance indicators (KPIs). Analyzing reports on a weekly or biweekly basis ensures practices aren’t letting an issue drag on before addressing it.
- Seek outside expertise when needed. If your practice is seeing an uptick in claim denials, days in A/R, and/or first-pass resolutions, it could mean that claims are too complex, weighted down by codes and modifiers encompassing multiple conditions and services. A dedicated third-party RCM expert can help ensure claims are processed without issue, and that a practice understands its performance trends.
It’s time to accept that RCM needs to adapt to the times. By embracing a more proactive approach to billing and collections, specialty practices can stay financially solvent when times are tough and ensure they’re better positioned for profitability as the economy gets back on track.
Todd Davis is the Director of RCM at of InSync Healthcare Solutions.
The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.