Provider Considerations as COVID-19 Persists
Healthcare providers across the U.S. continue to deal with COVID-19’s ongoing effects, and several areas of the country are experiencing significant increases in COVID-19-related incidence and hospitalizations. Providers in these areas have been striving to provide care to these patients while facing inherent disruptions to operations, and governments have been considering, extending, or reimplementing restrictions such as bans on elective procedures to manage hospital capacity. Providers not yet affected by this new wave are actively planning for how to address a potential spread to their service areas.
Given that the COVID-19 pandemic is affecting providers for an extended period of time, especially related to the parameters of the original relief funding programs offered through federal, state, and local governments, providers should consider these key issues as they address the ongoing situation:
- Maintain Operating Margins: Pressures on operating margins caused by lost revenue and increased expenses associated with the pandemic’s effects are exacerbated by the extended period, meaning providers need to be prepared to implement or continue cost-saving measures, such as timely and effective management of labor costs, as these disrupting effects continue.
- Enhance Pandemic Relief Funding: Identifying, capturing, and retaining funding from sources, such as the U.S. Department of Health & Human Services Provider Relief Fund, are a key to maintaining operating margins for most providers. Given little specific guidance regarding use requirements, overlap of funding between the various programs, and announced audit and reporting requirements, providers should document pandemic-related financial effects now to better avoid potential repayment requirements in the future. In addition, providers should consider all available funding opportunities, such as the Employee Retention Credit, on an ongoing basis as these fluid program opportunities become available.
- Cash Flow/Revenue Cycle Management: The pressures on operating margins along with disruptions in key administrative functions such as revenue cycle management (with associated slowdown in accounts receivable collections and/or loss of revenue from denials and unworked accounts) have created cash flow difficulties for some providers, with many others experiencing similar issues that have been temporarily cured by relief funding. Given the extended period of these effects and potential for further staffing disruptions, such as establishing a remote workforce to maintain administrative functions with COVID-19 absences, providers must closely monitor and project cash flow results and the performance of key associated functions, such as revenue cycle staff productivity, and be prepared to implement corrective actions in a timely manner.
- Increase Telehealth Opportunities: The pandemic has placed a premium on being able to provide services to patients in less invasive ways, yielding a boom in the demand for telehealth services. This gives providers the opportunity to offer additional services to patients while creating new requirements to manage and bill for these services. Given the continuing pandemic, providers should act on the service opportunities afforded by telehealth, ensure that collections from the services through revenue cycle processes are enhanced, and establish efficient processes for the services to avoid expense inefficiencies in their delivery.
BKD advisors assist our clients in each of the above areas and welcome the opportunity to discuss them in more detail with you. For more information, reach out to your BKD Trusted Advisor™ or use the Contact Us form below. To keep up with the latest news, changing guidelines, and newest regulations, visit our COVID-19 Resource Center.