Coronavirus Crushes Providers. Health Plans to the Rescue!
To support healthcare providers financially impacted by COVID-19, health plans rush to provide funds, ease administrative burden with prepay and engagement initiatives.
Right now, the healthcare industry is in the thick of the novel coronavirus pandemic, with providers bearing the brunt of the impact. Already risking their health in service of sick and scared patients, providers of all stripes – hospitals and private practice alike – are facing another dilemma. How will they survive financially? With the understanding that healthcare providers are one of our best assets in fighting COVID-19 and ensuring a healthy population, the government and private payers are taking short-term and long-term action to shore up this valuable resource. Immediately, by directly and indirectly paying out funds to providers. Longer-term, by investing in prepay and engagement tools to decrease providers’ administrative burden.
In recent weeks, there’s not a health plan we’ve spoken with that isn’t striving to support those on the front line as best they can. But we know that health plans will also need support. We have had numerous internal discussions around how we view the current industry situation. Here are some of the short-term and long-term actions we see occurring:
Short-Term Action: Inject Monetary Support
The COVID-19 crisis has created a perfect storm of financial issues for providers:
- In order to keep exposure to a minimum, elective procedures have been delayed indefinitely, and patients are self-selecting to avoid preventive care and other non-emergent healthcare. In our largely fee-for-service (FFS) environment, that means a huge chunk of revenue has evaporated for hospitals and physician practices.
- In some locations, patient volume is not an issue because of the sheer number of patients needing COVID-19 treatment. However, the number of uninsured and patients with high-deductible health plans means the considerable treatment costs – $20,000-70,000 according to some estimates – will be difficult to recoup.
- At the same time, providers are having to devote what little funds they do have to high-priced personal protective equipment (PPE) and ventilators, as well as infrastructure to support telehealth visits.
From the government, CMS has released the first $30 billion of the $100 billion earmarked for providers in the Coronavirus Aid, Relief and Economic Security (CARES) Act. This federal stimulus money is based on Medicare FFS volumes and does not have to be repaid. In addition, CMS is offered 34 billion in accelerated payments to providers, again based on Medicare FFS revenue, as a loan to be repaid within seven months to one year. Additional stimulus funds, particularly to providers who serve primarily Medicaid populations as well as those in COVID-19 hotspots, are likely forthcoming.
Commercial health plans also have stepped up with direct cash grants to providers, in one instance providing “up to $200 million through financing guarantees, advance payments and the restructuring of contracts.”
In addition to directly paying providers, new policies directed toward members promise to relieve providers of the costs incurred to treat COVID-19 patients. Many health plans have pledged to waive cost sharing for testing and inpatient admissions and reimburse telehealth at the same rate as in-person visits. The First Coronavirus Response Act (the FFCRA) and the CARES Act require commercial health insurers to provide testing and care visits at no cost to further increase the chances of providers being reimbursed for expenses incurred.
Additionally, health plans are relieving providers’ administrative burden short-term by reducing prior authorization requirements, including for those patients not affected by the virus, and providing triage tools so they can make best use of limited resources. Health plans are also re-thinking payment integrity activities most likely to cause provider abrasion and pausing aggressive post-pay claims audits.
Long-Term Action: Reduce Administrative Burden
No matter the short-term relief provided, if the “business as usual” response kicks in, providers – many of whom are either at the front lines or have lost revenue – are likely to grow increasingly frustrated with the red tape that characterizes their payer relationships. The goodwill generated by financial support will dwindle as time goes on. But these challenges aren’t unanswerable. Health plans can rapidly innovate, prioritizing technologies that reduce administrative waste and increase collaboration and engagement between payers and providers.
Strategic shift to prepay
With as few as 15 days to make a pay/deny decision on a claim, many health plans choose “pay and chase.” But is this a risk that payers want to take during the COVID-19 crisis compounded by a stressed economy? For some health plans, the pandemic serves as a catalyst to grow prepay efforts. Already a long-term goal for many, the commitment to reducing provider abrasion has prioritized this shift.
This risk of delayed income could be reduced if health plans had a robust prepay operation that could quickly identify and respond to overpayment trends before claim payment. Prepay efforts – while not frictionless – create less abrasion among the provider community and can be continued in extraordinary times like the one we find ourselves in now. In addition, a shift to prepay reduces administrative burdens for health plans and providers while reducing improper payment risk.
What codes should providers use for COVID-19 testing and diagnosis?
New codes have been published to designate healthcare encounters related to the novel coronavirus.
Pneumonia: J12.89 and B97.29
Bronchitis: J20.8 and B97.29, or J40 and B97.29
Respiratory infection: J22 and B97.29, or J98.8 and B97.29
ARDS: J80 and B97.29
Exposure: ruled out Z03.818, confirmed Z20.828
CDC laboratory test: U0001
Non-CDC laboratory test: U0002
For current Pareo clients, it’s easy to move more claims work prepay. The integrative platform allows a health plan to ingest data from multiple sources (such as CMS, states, claims, etc.), apply successful post-pay concepts prepay, configure workflows to effectively stack internal and vendor efforts – including fraud, waste and abuse mitigation – and make fast payment decisions.
Some suggest that health plans cannot move swiftly enough on urgent care coordination responses, like prior authorizations, that have left patients without COVID-19 taking up valuable hospital beds as they await discharge. And, strategically shifting the payment integrity mix to include more prepay internal efforts won’t do much on their own to support valuable network providers and decrease abrasion. Solution? Real-time engagement and communication.
Some health plans already use tools like portals to push messages to providers, like sending prepay information to providers along with education on how to correct incorrect billing issues. While that is a start, true engagement is a more encompassing initiative, one that mutually beneficial advanced technology can help support. Think of dashboards that highlight key performance indicators of the payer-provider relationship, integration with the EHR to streamline clinical documentation requests, and the ability to automate underpayment and denials inventory management.
Proactively and continuously opening the lines of communication with providers eases their administrative burden at a time they need it most. This initiative will pay dividends for health plans and providers alike, long after the threat of the pandemic has passed, paving the way for needed innovations that will transform the industry and set us up to weather future challenges.
Now’s the time for total payment integrity
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