Coronavirus Impact on Revenue of Rural Hospitals
While the "Hot Spots" of the Novel Coronavirus dominate mainstream media -- many of these locations being densely populated cities and urban communities -- it is important to shine a light on the how rural hospitals are being impacted.
These rural hospitals and healthcare providers are still feeling the impact as resources are less abundant than their urban counterparts.
Handling the Loss in Revenues
Many rural hospitals rely on outpatient care, medical procedures, and tests to generate revenue, making up an estimated 50 - 80% of their incomes.
In a recent Q&A session, American Hospital Association interviewed Rex McKinney, president and CEO at Decatur County Memorial Hospital in Greensburg, Ind., and Mary Ellen Pratt, CEO at St. James Parish Hospital in Lutcher, La., to provide answers to the cash flow problem.
Q: How has your hospital maintained cash flow?
Pratt: We have been tracking daily cash and revenue. Cash was not impacted immediately (obviously there is a lag in collections in health care), but our revenue dropped considerably (more than 50%) during the peak. We very quickly applied for the Centers for Medicare & Medicaid Services prepayment and received that very quickly. Some of our managed care organizations are doing the same. We are keeping abreast of the grants and applying for whatever we can. We are using consultants to help us with this since we are so busy managing the COVID-19 crisis.
McKinney: Over the past two years, our organization has put forth a focused effort to improve our financial position. This helped create a “rainy day” fund, which helped cash flow throughout this challenge. With the high degree of uncertainty, we did acquire a line of credit and are applying for several federal support programs.
While each hospital will take its own unique approach, understanding what other hospitals are doing and what federal funds or loans that are available is critical for rural hospitals. Additional articles and resources can be found on Rural Health Info website.
CMS Recommendations for Re-opening Hospitals
The entire country is patiently waiting for the day America can return to the "norm" and fully reopen. While this is the dream scenario, the plan is for America to reopen slowly with an easing of restrictions.
This is the same for hospitals and healthcare providers. While the CMS recommends the usage of telehealth modalities, it realizes that some procedures requires in-person care. CMS has published its recommendations to consider for reopening:
General Considerations:
- In coordination with State and local public health officials, evaluate the incidence and trends for COVID-19 in the area where re-starting in-person care is being considered.
- Evaluate the necessity of the care based on clinical needs. Providers should prioritize surgical/procedural care and high-complexity chronic disease management; however, select preventive services may also be highly necessary.
- Consider establishing Non-COVID Care (NCC) zones that would screen all patients for symptoms of COVID-19, including temperature checks. Staff would be routinely screened as would others who will work in the facility (physicians, nurses, housekeeping, delivery, and all people who would enter the area).
- Sufficient resources should be available to the facility across phases of care, including PPE, healthy workforce, facilities, supplies, testing capacity, and post-acute care, without jeopardizing surge capacity.
The CMS goes on to detail additional considerations for Personal Protective Equipment, Workforce Availability, Sanitation Protocols, Supplies, and Testing Capabilities.
Click here to view entire recommendations for CMS.
RCM Servicers Taking Proactive Approach to Drive Revenue for Clients
It is common that rural hospitals outsource a portion or, in some cases, the entire revenue cycle management operations to third parties such as RCM companies, clearinghouses, billing companies, and lockbox providers.
These third parties should be proactively working with their hospital clientele to better understand their individual needs, while simultaneously investigating new technologies that can better help their clientele.
We have outlined how the capabilities of Artificial Intelligence can be applied to to different aspects of RCM, including:
- Solving accuracy problems in RCM
- Automating billing and collections
- Building better denial management solutions
- Delivering integrated receivables for medical lockboxes
During these unprecedented times, it is more important than ever for RCM Servicers to take the lead in driving revenue for their customers.