By Vasilios Nassiopoulos, vice president of platform strategy and innovation, Hayes.
2020 will undoubtably be a year that the healthcare industry will want to forget. The COVID-19 pandemic not only introduced unprecedented care delivery challenges—at least in modern times—but has also left devastating financial consequences in its wake for today’s providers.
Razor-thin pre-pandemic margins of just 3.5% are now met with the reality that 97% of health systems will lose an average of $2,500 per coronavirus case despite incentives. Further exacerbating the situation is an expected increase in denials as healthcare organizations learn how to interpret new guidance around coding and billing for COVID-19 related care.
While many in the C-suite may be tempted to put their head in the sand and wait for the industry to round the corner into 2021, there is an opportunity to change current dynamics in the last lap of 2020. Amid many lessons learned from the pandemic, healthcare organizations must consider the role of sound revenue integrity practices for future preparedness and sustainability.
Progressive revenue integrity models are designed to integrate systems and processes for the purpose of eliminating revenue cycle complexities arising from issues like COVID-19 that can fast become liabilities for providers. Within these models, healthcare organizations are increasingly finding that strong partnerships between revenue integrity, revenue cycle and billing compliance teams are essential. While these functions have, more frequently than not, operated in siloes, embracing shared monitoring and auditing processes can streamline budgets and improve revenue recoupment and generate long lasting collaboration and communication.
To get ahead of the evolving revenue storm, hospitals and health systems can take four steps to get their billing and compliance house in order:
Did you hear the one about the disbarred lawyer who embezzled more than $1.2 million from a hospital in Kansas City over four and one-half years? This is not the start of a joke; it is unfortunately all too true. The long-trusted attorney supposedly served the hospital by collecting past-due payments from patients. Money collected was to go into a trust account. However, his fingers were more than a little sticky when checks were mailed back from patients and found their way into his personal account.
Slow-/no-pay patients have become a much more important aspect of hospital financial management as high deductible health plans (HDHP) become the norm across America. What once was considered little more than an annoying write-off, keeping bad debt to an absolute minimum is very much a priority. Gone are the days when more than 90 percent of revenue came from the insurance companies. Hospitals must look to patients for 50 percent, or more, of that revenue now. My bet is the number of checks embezzled by the attorney has only recently become material, which is why it took so long to catch him.
We can criticize the hospital for not staying on top of its account receivables. Certainly, payment plans, offered at the time of service can help keep A/Rs down as can reminders emailed to the slow-poke-paying patients. But that’s misses the larger point.
Unfortunately, any time checks are directed to third-party services, the potential for maleficence exists. Any point in a process where the payment can be touched, there is an opportunity for a redirection of those funds as in the case of the hospital in the city of fountains.
A significant portion of this could have been avoided if the hospital used an online paperless solution to bill their patients. It cuts off those sticky fingers, figuratively speaking. A paperless method keeps out crooked collectors because there is no reason or way for them to get their hands on the funds since they are not deposited directly into the hospital’s bank account and reconciled nightly. There’s nothing to touch or divert.
I am of the opinion that this crime in Kansas City is not all that unusual or isolated. Perhaps a perpetrator is uncovered and reparations are made under the cover of a sealed agreement, but it happens entirely too often.
In the past year I’ve seen reports of CEOs, CFOs and directors shown the door for embezzling millions from healthcare facilities in Alabama, Idaho and Wyoming, among others. The Alabama case involved a whopping $14 million.
Cash flow has become a top priority for all segments of healthcare, but especially hospitals. As I already suggested, the presence of HDHPs has made it so. But the manner in which these institutions bill for services rendered and go about seeking payment, is opening them to the same fate as these other organizations who were robbed and so the time to change is now.
Keeping your practice fiscally healthy while you keep patients physically healthy can be tricky. Medical practices work hard, offices get busy, people need attention and everyone on staff does their best to provide the immediate goal of helping people feel well. But we also know that the only way you can continue to help your patients feel well is if you maintain a healthy business that sustains your overhead, staff costs and profit.
Your ability to collect maximum reimbursement can make or break your ability to provide excellent healthcare to your patients. Without steady, high levels of reimbursement your practice will likely suffer from low cash flow and minimal profitability. It can also impact your staffing choices, ranging from running with too few employees to underpaying critical staff members, resulting in poor care. The stress level in a practice that is under-reimbursed can damage your practice from the inside out.
One way to keep a practice in the black is to minimize claims denials — that’s not as easy as it sounds. A recent American Medical Association study sought to calculate just how much reworked claims can cost a practice and found that medical offices waste as much as $14,600 each year on correcting denied claims via appeals, trouble-shooting and countless phone inquiries.
But you already know all about this — your billing staff or outsourced billers probably tell you all the time how many obstacles stand in the way of successfully submitting claims.
Here are some tips to help you avoid leaving $14,600 on the table each year: