This year has been volatile for our nation’s hospitals.
COVID-19 has created once unthinkable challenges in managing clinical staffing, supplies, patient volume and financial uncertainty. The financial strain on hospitals to combat COVID-19 has forced them to take drastic measures, from furloughing staff to closing their doors to communities they’ve served for decades.
Even with funding from the CARES Act distributed last spring, hospitals’ profit margins were still negative in the second quarter, according to the American Hospital Association (AHA). The AHA projects hospitals will suffer a staggering $323 billion loss due to the pandemic.
While the conditions causing this financial disruption may be present for months ahead, there are steps hospitals can take to increase revenue capture in 2021. Check out three of these strategies below.
#1 – Automate finding and collecting on uncompensated care
Uncompensated care was a major challenge for hospitals prior to the pandemic, with an estimated $41.3 billion in uncompensated care in 2018. With soaring numbers of unemployed and uninsured Americans due to the struggling economy, the Department of Health and Human Services (HHA) distributed $2 billion to hospitals based on their Medicare and Medicaid disproportionate share and uncompensated care payments. Hospitals will likely continue to face high levels of uncompensated care in 2021.
Hospitals can use automated coverage detection technology to find unknown patient insurance. This technology should provide actionable results that clearly articulate active and inactive coverage, even if the patient lacks an insurance card or coverage information. Additionally, this technology reduces collection costs by automating the search for active coverage. It also slashes AR days, maximizes workflow efficiency and, most importantly, boosts revenue by increasing collections and reducing bad debt and write-offs.
#2 – Capture Medicare underpayments that rightfully belong to your hospital
Almost half of all Medicare discharges are coded as transfer DRGs. While your hospital works to recover transfer DRG underpayments, it may not find 100% of them. Underpayments occur when the hospital discharges the patient as a transfer, but the patient doesn’t receive the ordered post-acute care.
It’s up to hospitals to identify claims that failed to transfer and recover payment. Thankfully, there are transfer DRG recovery solutions that can quickly capture underpayments and turn them into revenue, all with little effort from hospital billing and IT teams. Use a solution that not only automates the process of identifying transfer DRG claims, but one that directly connects to Medicare and the Common Working File (CWF), considered by Medicare to be the source of truth for claim data.
Hospitals with effective transfer DRG recovery programs typically use multiple services for a primary, secondary, and in some cases, a tertiary review. This ensures you capture as many underpayments as possible in a time when every dollar is critical.
#3 – Put your organization’s data to work
Most hospitals have a large volume set of revenue cycle data that can provide insights and drive informed decisions. While 93% of healthcare executives say they are looking for improved data analytics, most are hampered by reliance on IT and analytics tools with limited capabilities. Find an analytics partner that takes the burden off your IT team and makes true business intelligence easily accessible and comprehensible.
What can hospitals specifically measure to find pockets of missing revenue? First, insights into your denials are a must-have. A denial analytics tool can identify root causes of denials and solve your biggest challenges associated with denials:
- Enable staff to identify denials before they happen
- Streamline denial workflows
- Automate the appeal process
- Empower your team to identify trends and amend processes upstream
Second, by measuring your probability of returned payment, you can more accurately predict revenue and plan reliably based on your revenue stream. By predicting what claims are most likely to be paid, you can better prioritize. Intuition tells you to work your highest dollar claims first, but the key is to use data to align your limited resources to work claims that matter most. Analytics can reduce this bias and ultimately compresses your payment cycle.
Once you’ve scored claims that need attention, you must assign the correct team members to work them. Analytics can normalize payer data and provide other critical information to bring efficiency to your work queues. Using an analytics platform that examines reason codes and delivers actionable, prioritized data back into your systems makes your work queues smarter, helps you work claims faster and eliminates costly manual labor associated with reason code assessment.
With the right additions to your tech stack, you can fully harness the power of your data to empower faster, more actionable decision-making.
As the COVID-19 pandemic continues to unfold, healthcare organizations embracing modern technology will adapt more easily to shifting financial challenges while remaining focused on improving patient care. Visit Waystar.com to find out how your organization can collect more revenue—more efficiently—in 2021.
Waystar delivers cloud-based technology that simplifies and unifies the healthcare revenue cycle—and brings more transparency to the patient experience.