More Medicaid and self-pay patients, fewer radiologists, and a greater need for efficiency should prompt radiology practices to optimize revenue cycle management.
Declining volumes and revenues during the COVID-19 pandemic could spell big trouble for many radiology practices unless the providers refocus revenue cycle management efficiency and effectiveness for a post-pandemic world.
The COVID-19 pandemic has led to dramatic decreases in examination volumes – of up to 80+ percent in some cases – for private radiology practices that rely solely on revenues from examination interpretation, according to a special report from the RSNA COVID-19 Task Force.
The severe economic impact of COVID-19 has forced many practice leaders to take drastic cost-cutting measures to stay open, including decreasing salaries, paid time off, benefits, and hours of work despite increasing work responsibilities, the report’s authors stated. While practices need to be fiscally responsible during these difficult times, it is not possible for groups to cut expenses as a solution to long term profitability.
“Some groups may prove unable to survive the COVID-19 pandemic, potentially fueling trends either toward consolidation into larger radiology groups or toward increased employment by hospitals,” wrote lead author Richard Sharpe Jr., MD, MBA, a radiologist Mayo Clinic, and colleagues in a report that is one of many studies drawing attention to the economic impact of COVID-19 on radiology. “We anticipate that small radiology practices may be at greatest risk for consolidation with larger radiology groups that have a more diversified practice model regarding inpatient-outpatient mix, subspecialty service lines and geography.”
While this new environment may cause some trepidation for independent groups and physician shareholders, it has also created opportunities for groups with long-term strategic goals and data at their fingertips, especially in consideration of merge light agreements. When groups “merge light,” both entities share a tax ID number, a board of directors, and an executive committee while retaining their original compensation, benefits, and management structures.
Another study published in the Journal of the American College of Radiology during the early stages of the pandemic revealed dramatic volume declines across all types of radiology providers, while a more recent analysis found that work relative value units at community radiology practices declined by about 52 percent from a high of more than 120,000 in February 2020 to a low of 55,000 by April 2020.
While productivity is starting to rebound as communities reopen, this information could prove valuable for the survival of radiology practices in the long-term.
“With no end in sight to the current pandemic, such information could prove actionable for both radiologist workforce and practice financial planning, particularly if a predicted potentially disastrous ‘second wave’ of coronavirus disease indeed materializes,” Richard Duszak Jr., MD, of Emory University’s School of Medicine, and colleagues wrote in the July 2nd JARC analysis.
How well practices recover from the economic fallout of COVID-19 will depend on payers and patient demographics, according to radiologists from Yale New Haven Hospital.
State budgets are taking a hit during the pandemic and in response, Medicaid reimbursement rates are likely to fall even further to make up for state revenue shortfalls, they explained in a recent Radiology report.
Radiology practices will rely more on Medicaid and self-pay patients in the aftermath of the pandemic.
The Urban Institute estimates that 10.1 million people will lose their employer-sponsored healthcare coverage from a COVID-19-related job loss during the last three quarters of 2020. Of these individuals, the non-profit think tank projects about a third to switch to another source of employer coverage through a family member, but 28 percent will enroll in Medicaid and 6 percent in the non-group market.
Even worse, about 3.5 million people in this group will become uninsured by the end of 2020.
“As the economy struggles to return to normal, the demand for most imaging services should rebound above historical baseline levels as deferred, but necessary, imaging gets scheduled. Some of the revenue from this rebound will be offset by the aforementioned decreased percentage of commercially insured patients,” wrote the radiologists.
Best practices have developed over the years for radiologists, for instance, hanging films migrated to PACs systems. The ability to verify insurance coverage and engage patients early in the collection process must also take a similar evolution. As patient responsibility and liability continues to increase, groups must engage new and enhanced technology and processes to capture the lost revenue opportunity.
But radiology practices will have to adapt to greater patient engagement with a slimmer workforce. Collecting the most difficult dollars with a streamlined workforce requires more focused technology and effectiveness in the billing cycle.
Additionally, practice leaders will have to get comfortable with more remote work, especially as patients and providers seek to alleviate the pent-up demand for radiology services.
Technology investments and process improvements in the revenue cycle will be key to overcoming the financial and operational challenges of COVID-19.
For example, convenient payment options, such as payment plans and online bill pay, cost estimations prior to the service, prompt pay discount,s and early out programs for true self-pay will be required for practices to be successful and thrive, especially as more patients struggle to make ends meet during the recession. The addition of AI and machine learning algorithms will also solve the issue of coverage denials.
The enhanced patient digital experience uses an all-encompassing “omni-channel” approach to provide radiology practices with a fully integrated experience for addressing self-pay and bad debt issues.
Business intelligence and revenue cycle management systems can also support cost-cutting efforts radiology practices must undertake to increase efficiency amid unfavorable payer mix shifts. A data-driven approach to financial stability is key to understanding a practice’s cash flow and physician productivity.
At the same time, however, the financial challenges of COVID-19 are still a human problem.
Radiology practices must still ensure a compassionate, personalized patient experience. Practice leaders must also keep their workforce in mind when implementing strategies for reducing overhead costs and redesigning the practice of radiology.
Balancing technology with highly trained staff will be crucial to surviving the COVID-19 pandemic and its economic fallout. Selecting a revenue cycle management partner who understands the specific challenges in radiology can help practice leaders achieve that balance.
A partner can help optimize revenue cycle management functions, such as medical billing and physician productivity tracking, and leverage automation to help front-end revenue cycle staff, for example, deliver accurate, upfront cost estimates to improve patient experience. Howard Pingston, Regional VP of Business Development in Radiology with Zotec Partners, agrees.
“Radiology groups will not only face an increase in bad debt, but also potentially an 8 to 11 percent reduction in reimbursement in 2021, depending on the CMS final ruling. Now more than ever, radiology practices need an RCM partner that is truly equipped to help them identify revenue opportunities and provide full transparency throughout the process in order to weather this storm in the near term and succeed in the long term,” he says.
Rethinking revenue cycle management using a blend of technology and training will be key to succeeding in a post-pandemic world in which there are more uninsured patients, fewer radiologists, and a greater need for efficiency.