Problems are traceable to a number of pandemic-related factors, but two in particular stand out:
So, several months into the COVID-19 pandemic, where does your facility stand from a revenue standpoint, and what should you do moving forward?
While it may not be easy to visualize a silver lining in all this, the crisis does offer opportunities for revenue cycle professionals to reevaluate current processes and institute new ones. In this spirit, five strategies below can strengthen your LTPAC’s revenue cycle function when “normal” times return—and when future crises arise.
Strategy #1: Study your payer mix, plan for adjustments as necessary and carefully manage it over time.
LTPACs that thus far have weathered the COVID-19 crisis from a revenue standpoint have one thing in common: a healthy mix of skilled and non-skilled payers. Plainly speaking, LTPACs with an evenly weighted payer mix – for example, a healthy blend of Medicare and Medicaid – don’t risk losing all their revenue at once during a pandemic or other adverse event. Accordingly, it’s wise to revisit and identify what your planned payer mix has been pre-COVID-19, then measure that against the current mix to understand how any changes are impacting revenue. As part of this, talk to hospitals and other referral sources, then plan accordingly to achieve a healthy balance moving forward. From there, you’ll be in a better position to manage your post-COVID payer mix through referral management.
Strategy #2: Ensure that all of your upstream pre-processes are sound.
Such processes – including prior authorizations, eligibility verification, referral resource management and proper documentation – all impact revenue. By establishing clean claims and ensuring that all your pre-billed processes are sound, you’ll be able to positively impact work flow from pre-bill through follow-up and account closure.
Strategy #3: Focus on cash acceleration.
Many facilities are experiencing a down cycle during the current pandemic, so now is an ideal time to focus on collecting cash. Cash acceleration is simply a focused effort to get high-dollar claims paid—and as a result, cash in the door more quickly. Many LTPAC organizations have older accounts payable on the books; this is the time to work on ensuring these claims are processed and paid. To that end, allocate the appropriate time and resources to collect all outstanding cash over 30 days old.
Related Article: CARES Act Takeaways for LTPAC Organizations
Strategy #4: Keep good metrics—and proactively monitor them.
Metrics by themselves are never the answer; rather, they’re a gateway to potential issues. If you’re looking at your metrics regularly via a dashboard and finding patterns – good or bad – you’ll then be able to recognize real or potential problems. From there, you can craft solutions to current problems, or find ways to proactively mitigate potential problems.
As a starting point, monitor your days service outstanding (DSO) by payer to make sure that your collections are timely, and to identify potential payer issues. For example, if you’re working on a cash projection, review all of your historical payments for a specific payer; understand terms and timing that have driven payments in the past; and determine if those have changed under the current COVID-19 climate—and if so, how. Such changes will impact your organization’s cash flow and revenue, so monitoring them makes good sense.
Utilizing a cash collection rate metric is also useful. You should expect that everything you billed out last month should be collected this month, your cash collection rate should be 100% of the previous month’s revenue. If you start to see a fall-off, there could be a problem that demands a solution.
Strategy #5: Ensure that all private pay money is being collected on a regular basis.
Cash is tight right now for many facilities—and many individuals. While you certainly don’t want to evict a private pay patient (i.e., a long-term patient who doesn’t qualify for Medicaid) from your facility due to nonpayment of their latest statement, you should carefully monitor your private pay money so that the overall balance doesn’t get out of hand as the crisis begins to subside.
In this regard, it’s also important to build personal and trusting relationships with private patient families. In order to operate efficiently and enhance outcomes for patients, the revenue cycle department must collect revenue.
Transforming Skilled Nursing and Long-Term Care Revenue Cycle Management—Embrace the Challenge
Even in difficult times like these, you can begin to transform your healthcare revenue cycle management process into a true revenue-generating function for other areas by identifying gaps such as documentation, intake and more. Challenges and issues like COVID-19 don’t traditionally highlight organizational strengths; rather, they expose weaknesses and liabilities. So, take the steps we outlined above to identify weaknesses and gaps in your revenue cycle and proactively address them. By doing so, you’ll be prepared to move forward from a position of strength, in good times and bad.
To aid you in promoting financial health for your LTPAC and other issues surrounding COVID-19, we have developed a COVID-19 Resource Center which is regularly updated with the latest information.
Contact Richter Revenue Cycle Management Consultants
Do you have questions about uncollected revenue, or other revenue cycle management challenges? Read our e-book, “Six Strategies to Optimize Your LTPAC Revenue Cycle Process” or call Richter’s revenue cycle management consultants at 866-806-0799 to schedule a free consultation.