The events of 2020 have driven changes to many of the clinical and operational processes in our delivery of care - which has had a significant impact on your finances.
Have you modified your payer contracts to reflect these changes?
A recent article in the HFM Winter 20-211 magazine highlighted the decrease in chronic care visits and the corresponding drop in revenues from canceled elective procedures due to fear of COVID.
The WSJ2 reported on January 20 that UHC’s quarterly earnings report cited additional costs for care that had been delayed as having an impact on their profits, even though UHC’s revenues had increased.
When the pandemic started, CMS increased payments to providers to cover the additional costs of providing care during the pandemic.
Let’s look at some of these costs.
- PPE from new and more expensive sources.
- Increased staff costs: contract nursing (often at premium pricing) for infected or worried nurses.
- Staff PTSD & HR costs:
- non-productive time worrying about loved ones, elevated stress for prolonged periods.
- Constriction costs from converting resources to ICU or laminar flow rooms.
- Reconfiguring your facility layout to accommodate regulatory time and distance protocols.
- Decreased revenue from essential and non-essential care.
- Have your contracted for profit payers made similar adjustments for their government or commercial product reimbursements?
When you measure how your clinical and operational costs have increased for providing care since the national health emergency started, have you considered the cumulative operational and financial impacts of these changes?
If you are in risk based relationships have you measured how patients being afraid to seek healthcare may have increased the amount and intensity of the care you now have to provide under the pre-pandemic payment models?
Payers have been collecting premiums throughout the pandemic and adjusting future premium increases in anticipation of some of these costs.
They have also been issuing an increasing number of denials according to the American Journal of Managed Care3, “Medical Claim Denial Rates Rising, Highest in Initial COVID-19 Hotspots.”
If your fee for service system is highly accurate at
If not, you are likely to be accepting rates that may have been adequate in the past, but no longer are.
Is it time you revisited your relationships with your payers to adjust your contracts to reflect the new realities of providing care to their subscribers?
CMCS assists our clients to have fact based business conversations so we can align your contracts with your strategies for your market.
We use analytical tools specifically developed for this task, combined with experienced negotiators who have been payers to develop contracts that deliver the revenue to support your strategies.
The payers have already adjusted their rates – isn’t it time we did the same?