Inflation is affecting many businesses, but medical practices tend to see the brunt of its effects because of the way payment structures are dictated by insurance payers. Even more worrisome, practices have had to increase wages significantly and the current job market tends to favor employees. In some instances, employees are asking for wages 20-30% higher than previous, and understandably can command these wages as there is fierce competition for skilled employees. While these issues are affecting many businesses, there are things medical practices can do to help ease the squeezing margins.
From the early stages of the COVID-19 pandemic, healthcare providers have been reaching out to us expressing some of the most difficult decisions they have ever been faced with; Practices are struggling to keep their doors open as costs mount, and revenue has fallen significantly. Practices are faced with temporarily shutting down or closing permanently, even the ones that have seen growth and success for years. Where should we all be looking to ensure practices remain open, implement the right changes, and evolve their operations for the future?
Most physicians who have been practicing for a few decades remember the days when private payer reimbursements dwarfed Medicare reimbursements. That dynamic has long since flipped, starting with the 2008 recession. Reimbursements have been flat or have lost value from inflation, while practice costs have seen double-digit increases. Meanwhile, hospitals and insurance-owned health networks have seen reimbursements increase to 300% or more of Medicare in some cases, whereas it’s not uncommon for private practices to receive rates far below Medicare standards. Many practices have seen their volumes decrease from 30% to up to 90%, and a significant number are closing their doors for now. As states start to allow elective surgeries to resume in the coming months, some specialties will see some slight increases in patient volume, but this pandemic will have long-lasting repercussions for every practice and every specialty. Whit that in mind, here are four examples of how the COVID-19 Pandemic is effecting specialties across the nation in real-time:
Revenue Cycle Management is the financial process that helps to bridge the ever-growing gap that divides business and healthcare. The revenue cycle itself encompasses all the administrative tasks and processes that take place from the scheduling of a patient to the collection of revenue. This may include patient registration, coding, collecting payments, and submitting or collecting claims from insurance providers.