The Revenue Integrity Perspective on Managing COVID-19

Where does recovery for healthcare start? With efforts to improve revenue so that hospital and physician office doors stay open and the lights stay on.

A version of this article was first published June 4, 2020, by HCPro's Revenue Cycle Advisor, a sibling publication to HealthLeaders.

Editor's note: The National Association of Healthcare Revenue Integrity (NAHRI), an HCPro association, is currently celebrating Revenue Integrity Week, a national week of recognition for revenue integrity professionals. This week's instructor note has been adapted from two case studies originally published by NAHRI. Visit NAHRI.org for more information on Revenue Integrity Week. Click here for details on additional deals and exclusive drawings as well as information on how you can become a NAHRI member for just $99.

Recovering from Covid-19: Mid-revenue cycle management

by Adriane Martin DO, FACOS, CCDS

Martin Luther King Jr. Day took place January 20 this year. What else makes January 20, 2020, significant? It was the day the CDC confirmed the first case of COVID-19 in the United States. In the following days, weeks, and months, profound changes impacting every facet of our lives were made to slow the spread of the disease and to properly care for those who contracted COVID-19.

The changes worked. New cases of COVID-19 declined nationally, and there were fewer deaths. However, success did not come without a steep price. The negative economic impact wrought by COVID-19 will likely resonate for years to come.

Healthcare has been hit particularly hard. For instance, cancellation of elective procedures and admissions coupled with increased spending has left many hospitals facing significant revenue loss, compounding the preexisting problem of thin operating margins.

Where does recovery for healthcare start? With efforts to improve revenue so that hospital and physician office doors stay open and the lights stay on.

Improved revenue begins with mid-revenue cycle management. For immediate revenue lift, look toward a pre-bill MS-DRG review process. Optimization of inpatient revenue through an MS-DRG pre-bill process is critical. In this process, the medical record is reviewed to ensure complete and accurate clinical documentation and coding prior to final billing. While many regulatory waivers have been issued to allow for flexibility in responding to the public health emergency, they did not excuse inaccurate or incomplete documentation from being a target for review and denial by payers. By uncovering missed documentation, coding, and query opportunities, the pre-bill process drives revenue integrity, mitigates financial risk, and secures future revenue. Clinical documentation integrity (CDI) efforts should be assessed and aligned to support the goal of revenue lift. In the face of staffing limitations and changes in payer mix, a shift in the usual practice of inpatient CDI departments may be needed.

Mid-revenue cycle management must also be considered in the ambulatory setting to ensure accurate reimbursement under accountable care organizations and managed care organizations. Complete hierarchical condition category capture can be accomplished with a pre-visit planning process designed to alert providers to open, missed, or suspected conditions.

Complete economic recovery from COVID-19 will require many different solutions. The strategies listed above for mid-revenue cycle management provide avenues to impact the immediate short-term need of revenue lift and start healthcare on the road to recovery.

Martin is the vice president of physician services at Enjoin. She also serves on the NAHRI Networking Committee.

Quantifying the impact of COVID-19 on your organization

by Jeff Morgan, FHFMA, CHAM, and Brian Parrish

In times when many hospitals and health systems will face negative margins, employing activity-based costing principles that support a value-based healthcare economy provides essential information for healthcare leaders. Using this method to understand expenses associated with providing care exposes process inefficiencies, as well as capacity, across your value cycle. This is information that will help future-proof your organization.

Breaking down a complex problem

As hospitals brace for and emerge from peak impact of COVID-19 on their communities, leaders must be prepared to handle an unprecedented change across their financial statements. 

Begin by categorizing your patient population by medical condition and relative volumes as well as distinguishing between elective (E) and non-elective (non-E) procedures/services for each category. For each new grouping of medical conditions (E and non-E), it is necessary to understand expected volume case-mix variance through reviewing historical data. 

Additionally, analyzing the variance of relative expenses—direct versus indirect—illuminates what can potentially flex down and up.

Lastly, from a resource consumption and cost perspective, consider the inherent flexibility within employee skillsets.

Use the following actions by category to project the effect on revenue, cost, and overall profitability of your hospital.

Volume case mix

In some cases, a general decrease of volume was expected; in others, a significant change in the case mix, particularly in regions that have experienced the full impact COVID-19 spread, has been realized. Actions to consider include:

• Qualify and quantify the volume case mix variance in order to identify the medical condition/specialty

• Analyze the financial impact of what has been cancelled versus what is new in the volume case mix

Facility / supplies / equipment investments

Provided supply vendors do not subscribe to demand/offer gaming, the overall financial impact of the supply category should not be significant. Nevertheless, actions to consider include:

• Qualify and quantify the unplanned investments in order to clearly identify facility investments, equipment, supplies, and other related expenses

• Analyze overall financial impact

Labor resource variation 

With the change in volume case mix and a noticeable variation in surgical cases, a relevant portion of procedural staff has likely been temporarily reassigned to other care areas. Actions to consider include:

• Qualify and quantify the unplanned shift of activities and analyze impact on staff. Develop a thoughtful and thorough staffing plan to support the crisis as soon as possible.

• Analyze overall financial impact.

Patient revenue shift

The average reimbursement by case has dropped. To preserve the bottom line, compensation with some other revenue, like public funding or pass-thru, has become imperative. Actions to consider include:

• Qualify and quantify the unplanned revenue mix shift across all payers and respective contracts, as well as the overall variance from expenses

• Analyze financial impact by payer

Bottom line

Resource consumption at a patient level, comparing related losses with reimbursement and expenses, is key to understanding the impact of the COVID-19 pandemic.

Morgan and Parrish respectively serve as the sales executive and vice president of marketing for Craneware Healthcare Intelligence® in St. Louis, Missouri. They can be reached at CHI@craneware.com.