Hospital revenue cycle management leaders are seeing unprecedented declines in revenue due to the COVID-19 pandemic. In a recent estimation, the American Hospital Association pegged monthly losses at more than $50 billion due to the effect of canceled elective services and costs associated with treating and preparing for COVID-19.
Revenue losses and new billing challenges tied to COVID-19 are bringing significant change to the RCM and patient experience landscape for hospital leaders. Here are eight trends leaders need to know:
1. Regulatory changes will affect payment. CMS has changed several payment regulations to give hospitals more flexibility during the COVID-19 pandemic. The most recent changes extend telehealth reimbursement to more care providers and allow hospitals to expand their capacity without facing Medicare payment reductions. Hospital RCM leaders will need to be prepared for more sweeping regulatory changes as the COVID-19 pandemic continues.
2. Expect more uninsured and/or ACA marketplace and Medicaid patients. In coming months, the Urban Institute predicts that up to 43 million Americans may lose their health insurance if the unemployment rate rises to an expected 20 percent. As Americans lose employer-based insurance, many will stay uninsured or shift to Medicaid rolls and ACA marketplace plans. As a result, hospitals will need to be ready for greater challenges with collecting out-of-pocket payments from uninsured patients and lower reimbursement from government health plans. Indigent care requests may also climb as job losses leave patients without income.
3. Advance payments from federal and commercial payers. Under the now suspended Advanced Payment Program, CMS has distributed $100 billion in advance and accelerated payment loans to healthcare providers and suppliers. On the commercial side, UnitedHealth Group has accelerated $2 billion in payments, while others have sent out one-time payments that will be deducted from providers’ end-of-year quality incentive payments. While timely cash increases are necessary to keep providers’ doors open, hospital RCM leaders will have to budget for repayment of the federal APP payments and potential year-end drops in quality incentives.
4. Prior authorization rules for elective procedures may change. Some commercial payers are extending prior authorization for canceled or suspended elective services so hospitals won’t have to resubmit them as patients return. Anthem is extending prior authorizations for elective inpatient and outpatient procedures by 90 days. UnitedHealthcare is also pushing back prior authorization deadlines for postponed elective procedures and surgeries. These changes aren’t uniform, though, and will vary by payer.
5. Uncertainty remains around out-of-pocket costs for COVID-19 tests and treatment. The federal government requires insurers to cover COVID-19 tests. However, patients who have presented to hospitals with COVID-19 symptoms but received a flu test or another service to rule out the virus have faced large bills because they didn’t receive a COVID-19 test. Hospital RCM and patient experience leaders will likely have to put systems in place to help presumptive COVID-19 patients manage unexpected medical bills.
6. Questions remain around whether improved telemedicine reimbursement is temporary. CMS extended Medicare coverage for telehealth services during the COVID-19 pandemic so more virtual visits are reimbursed at the same rate as in-person visits. Several commercial payers have done the same. However, there are questions around whether government and commercial payers will maintain coverage once the immediate threats from COVID-19 lift and more patients return to in-person visits.
7. Questions also remain on whether an increased emphasis on digital payments is here to stay. COVID-19 has brought growth in digital and contactless payments as providers try to limit human-to-human cash exchanges. By 2025, Bain & Co. predicts the adoption of digital payments will accelerate by between five and 10 percentage points globally, and COVID-19 is quickening that adoption. RCM and patient experience leaders will need to address this increased demand and make digital payment options more available.
8. Medical debt collections may increase as hospitals search for ways to shore up finances, but could come with a cost. For many hospitals, collecting past-due medical debt may be a strategy to improve revenue streams while elective services and procedures slowly ramp back up. However, the collection strategy has faced criticism in the press and from patient-focused organizations who argue garnishing wages or other aggressive collection tactics may disproportionately harm those who are newly jobless or uninsured.
During this time of disruption and uncertainty, industry transformation has also occurred with a shift away from traditional financial processes that have historically ruled the healthcare experience. Providers who haven’t yet updated their technology to meet patient consumers where they are can now look to re-imagine these processes with scalability and cost in mind. Zotec has the capacity to build a patient-facing engine with technology solutions and Revenue Cycle Management (RCM) services that connect patients to their providers, as well as agnosticism to multiple EMR platforms and payer organizations, employees and outside labs –all of which empowers monumental transformation of the healthcare landscape. As an exclusive end-to-end RCM and patient experience provider, Zotec is already arming healthcare organizations with an easy-to-use web application for scheduling, check-in and payment options, with the ability to offer patients affordable and accessible high-quality care, in all specialties and across multiple locations. These types of changes to RCM and the patient experience can be a catalyst for widespread industry change amid this new normal, for healthcare organizations of all sizes and specialties.