COVID’s Impact on Healthcare Organizations’ Revenue and Reimbursement: The Lessons We Learned

By Vasilios Nassiopoulos, Vice President of Platform Strategy and Innovation, Hayes Management
Twitter: @HayesManagement

It has been more than a year since the start of COVID-19 pandemic. While it will be years before we truly know the effect it will have on our overall health, economy and society, there are a lot of things we do know about the impact on health systems.

Healthcare systems stepped up in a heroic way. They managed to test, treat and cure millions of patients. We went from having no standard test for COVID-19 to being able to test more than 2 million people in a single day. (Data from the Covid Tracking Project).

But that is not all we saw. Telehealth usage skyrocketed. Elective procedures and wellness visits were postponed or completely skipped by many providers and patients. Safety protocols limited the number of appointments available and many people were afraid to go to the doctor, even when they really needed to.

For most hospitals and health systems, 2020 was a difficult year financially. Let’s look at the challenges faced in more detail.

Billing for COVID-19 Testing and Treatment
Testing for COVID-19 became a vital tool against the fight of the pandemic early on, however the new testing methodology had no standard and corresponding CPT or ICD-10 codes. Temporary codes were rolled out, and then replaced by new ones specifically describing COVID-19 testing and diagnosis.

The challenges of keeping up with the changes and training everyone who needed to know about them resulted in payment delays and denials.

Among our MDaudit users, COVID-19 related services represent more than 40% of the overall denials seen in 2020.

The Pause of Elective Treatment
Elective procedures were placed on hold, as a measure for patient safety and “bed availability”. Even though major metropolitan areas experienced the stress of capacity and bed availability, the majority of community and rural area hospitals never (thankfully) reached similar alarming levels. All hospitals felt the strain of the negative financial impact and loss of revenue resulted from the pause of elective procedures.

MDaudit users experienced approximately 60% in revenue loss in their surgery departments in 2020.

Impact of Claims Processing Operational Changes
The expectation of a quick reimbursement of COVID-19 cases fizzled as third-party carriers also fell victim to their facilities being closed. Remote work was not suited for claim reviews and processing. A temporary suspension of third-party initiated audits offered limited relief but COVID-19 related claims were suspended or denied to avoid incorrect payments or even fraudulent submission.

Influx of Telemedicine Provided Services
The replacement of in-person visits with telemedicine visits provided another significant change. While the rules and policies were simplified, modified or even suspended, documentation and reimbursement was challenging. The new coding and documentation guidelines delayed reimbursement and added to the pandemic-related denials.

The FairHealth Telehealth Regional Tracker has shown 2000%-4000% increase in telehealth services year over year starting in March 2020.

Denial Changes
As you would expect, COVID -19 related denials replaced elective procedure denials and they were much more difficult to work due to the volume and confusion providers faced when trying to bill for COVID-19 or telemedicine related visits they had very little experience or education around.

During the first 4 months of the pandemic, our MDaudit cohorts experienced a 40% increase in their overall denials. All of them were related to incorrect coding, medical necessity, and abnormal lengths of stay.

How MDaudit Reacted
Our MDaudit platform did not stay stagnate during 2020. The changing regulations required technology to evolve to accommodate the new codes. Product enhancements and module additions were rolled out to help our customers to increase productivity, identify and mitigate risks, and reduce denials. Webinars and user training was used to educate clients about the changes in order to help them understand how the software could be used to identify the COVID-19 and telehealth charges they should focus on.

Future Outlook
The negative financial impact from COVID-19 in 2020 was significant and that trend will continue to be a threat for healthcare organizations in 2021. Third-party scrutiny has resumed, risks of incorrect billing and lack of supporting clinical documentation will continue to impact our institutions. That said, having the right technologies and best practices in place will significantly help in ensuring both billing compliance and the maximization of reimbursements are being recognized.

This article was originally published on Hayes Management and is republished here with permission.