COVID-19 Support: Weathering the Revenue Fluctuation Storm

hrgpros.com© 2020 Healthcare Resource Group, Inc ALL RIGHTS RESERVED
Incredible People | Extraordinary Results
COVID-19 SUPPORT: WEATHERING THE
REVENUE FLUCTUATION STORM;
How to keep AR results stable when revenue is anything but stable
Presented By
Cassie Wise, CRCP
Executive Director of CBO Services
Healthcare Resource Group

CURRENT REVENUE CYCLE TRENDS ACROSS AMERICA
The COVID-19 pandemic is putting pressure on hospitals and health
systems across the U.S
MANY URBAN HOSPITALS AND LARGE HEALTH SYSTEMS
Urban Hospitals are equipped to treat
patients critically ill or whom require
ventilators as part of their treatment. Due to
their expertise they are being hit hardest
with positive COVID cases

MANY URBAN HOSPITALS AND LARGE HEALTH SYSTEMS
As a Result Urban Hospitals are experiencing:
► Skyrocketing Treatment Expenses
► Staffing Challenges
► Fear of Bed Shortages
► Loss of Revenue from Canceled Procedures
► Increasing Uncompensated Care Due to Loss
of Employment

CRITICAL ACCESS HOSPITALS
Before the COVID-19 outbreak in the U.S., many
rural hospitals across the nation were already
facing financial challenges. While rural hospitals are
not being hit as hard as urban hospitals with
positive COVID cases, they have lost the bread and
butter of their revenue stream in the canceling of
their elective procedures.
On average Critical Access Hospitals have lost
25% of their monthly revenue.

CRITICAL ACCESS HOSPITALS
As a Result Critical Access Hospitals are
experiencing:
► Loss of Revenue from Canceled Procedures
► Loss of Revenue due to patients avoiding
outpatient treatment for fear of contracting
COVID
► Increasing Uncompensated Care Due to Loss of
Employment

PHYSICIAN PRACTICES / CLINICS
Many Americans have forgone care, including
primary care and other specialty care visits. Health
care providers have raised concerns important care,
such as chronic disease management which can
further jeopardize their health isn’t happening.

PHYSICIAN PRACTICES / CLINICS
As a Result Physician Practices / Clinics are
experiencing:
► Loss of Revenue due to patients avoiding
outpatient treatment for fear of contracting
COVID
► Increase in telehealth visits
► Increasing Uncompensated Care Due to Loss of
Employment

 According to AHA Overall healthcare revenue has decreased a staggering 34.5%
 Hospitals are losing an estimated 50 billion dollars a day
 Some hospitals are being flooded with costly COVID patients while others are losing
patient revenue
 An estimated 27 million Americans may lose their employer-sponsored health insurance
due to job loss. [According to Pew Research unemployment has gone from 3.8% to 13%]
 The American Hospital Association (AHA) is already reporting a 13% increase in Bad Debt
due to COVID-19
 Patients are avoiding care. This will lead to illnesses going undiagnosed and chronic
conditions going untreated
 ER, Outpatient and Urgent care services are down & Telehealth has increased rapidly
KEY TRENDS

REVENUE FLUCTUATION AND AR METRICS

Revenue must be monitored closely as it is your best indicator into the
future of your AR.
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20
Gross Revenue Trend
Example
35%
Decrease
COVID
Shutdown
Began
OBJECTIVE

future of your AR.
Gross Revenue Trend
Example
35%
Decrease
COVID
Shutdown
Began
OBJECTIVE
Revenue vs Cash Forecast
Example
Gross Revenue

future of your AR.
Gross Revenue Trend
Example
35%
Decrease
COVID
Shutdown
Began
OBJECTIVE
Revenue vs Cash Forecast
Example
Gross Revenue Cash Collections

The Unbilled is cash just waiting to be in the bank. Monitoring your
unbilled is key to making sure your cash is as stable as possible
OBJECTIVE
 Sitting on a doctors desk waiting to
be signed
 With the HIM team awaiting codes
 Laying in a patient bed (Services
eligible for Cycle Billing)
 In your claim scrubber
Unbilled Money Can Be Found…

Unbilled claims are cash just waiting to be in the bank. Monitoring your
unbilled is key to making sure your cash is as stable as possible
OBJECTIVE
 Sitting on a doctors desk waiting to
be signed
 With the HIM team awaiting codes
 Laying in a patient bed (Services
eligible for Cycle Billing)
 In your claim scrubber
Unbilled Money Can Be Found…

Claim Submissions are your best indicator of what you can expect in cash
collections. Claim Submissions should always be at a minimum what you
are seeing in revenue each week/ month
OBJECTIVE
Claims Data
 Claims Uploaded into Scrubber
[Count and Dollar Amount & Clean vs Dirty]
 Claims Submitted
 Dollar Amount
 Payer
 Date of Service
$
$
$

Cash Projections are utilized to obtain estimated cash and when to expect
it. When calculated well it can give excellent insight into the future of your
Cash Collections
OBJECTIVE
CALCULATION Separate each weeks claims by payer. Multiply the claim submission
amount by the average collection percent for each payer to come
up with an expected payment amount. Review previous payments
for each payer to identify the “Payer Time to Pay”. Utilize the “Time
to Pay” to identify which week you can expect payment from the
claims submitted .
Claim Charges Expected CashCollection %
Week Submitted Date Expected Payment DatePayer Time To Pay

Monitor expected cash collections based on your projections and compare
to your actual cash collections.
OBJECTIVE
What if Cash is lower than Expected?
1. Identify which payers have come in
shorter than expected
2. Work backward. Review a sampling of the
claims that were expected to pay
3. Review Denials for root cause
unanticipated cash shortages

OBJECTIVE
CALCULATION
Accounts Receivable (AR) days were designed to produce a number that
can be described as the average number of days between when charges
are booked and payment is received
Divide the revenue over a given period by the number of days in
that given time period produce your average daily revenue. Take
that average daily revenue and divide it by the total outstanding AR
to get your Days in AR
Gross Revenue
(last 3 Months)
Number of days
(last 3 Months)
Average Daily
Revenue
Gross AR
Average Daily
Revenue
AR Days
NOTE: This works well when revenue on average fluctuates less than 10%

31.2
32.0
28.8
30.3
31.2
30.6
25.1 24.9
31.7
38.3
20.0
25.0
30.0
35.0
40.0
Mar-20 Apr-20 May-20 Jun-20 Jul-20
< 10% Revenue Fluctuation > 10% Revenue Fluctuation
EXAMPLE LESS THAN
10% REVENUE
FLUCTUATION
EXAMPLE GREATER
THAN 10% REVENUE
FLUCTUATION
$195
$200
$180
$190 $190
$200
$150
$130
$150
$200
$100
$120
$140
$160
$180
$200
$220
Mar-20 Apr-20 May-20 Jun-20 Jul-20
< 10% Revenue Fluctuation > 10% Revenue Fluctuation
REVENUE
ARDAYS

$150
$200
$-
$50
$100
$150
$200
Jun-20 Jul-20
REVENUE
$135
$175
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
Jun-20 Jul-20
GROSS AR
$50
REVENUE
DIFFERENCE$40
GROSS AR
DIFFERENCE
REVENUE/AR DELTA
DIFFERENCE
The purpose of this calculation is to
remove the fluctuation in revenue
from the Gross AR to identify if the AR
is moving in the appropriate direction.
In this sample, the revenue grew $50
but the AR closed with an increase of
$40. This means the billing team
cleaned more off of the AR than was
put on in increased revenue as
compared to the previous month.
-$10
DELTA
DIFFERENCE
When Revenue is not stable throwing your Days in AR off, an alternative
calculation that can be used is the REVENUE/AR DELTA DIFFERENCE

KEY TAKE AWAYS FROM THIS EXAMPLE
1. Revenue was reduced substantially (greater than 10%) over the course of 3 months but has rebounded
2. Outstanding Gross AR has not increased as much as the Revenue has
3. AR Days have increased substantially
In this scenario similar to hospitals across America the revenue wave has caused increased days in AR but is
not a true picture of the performance of the AR
When Revenue is not stable throwing your Days in AR off, an alternative
calculation that can be used is the REVENUE/AR DELTA DIFFERENCE

CALCULATION
Accounts Receivable (AR) Aging gives you a snapshot of the revenue that is
outstanding past a certain age. This metric is used to identify when there
are billing/ collecting issues
Divide the AR over a given age (typically 90 days) by the total
outstanding Gross AR to get your AR Aging percent.
Aged AR Balance
(Accounts aged 90 days or greater)
Total Gross AR AR Aging Percent
NOTE: (Again) This works well when revenue on average fluctuates
less than 10%
OBJECTIVE

EXAMPLE LESS THAN
10% REVENUE
FLUCTUATION
EXAMPLE GREATER
THAN 10% REVENUE
FLUCTUATION
KEY TAKE AWAYS FROM THESE EXAMPLES
The dollars aged greater than 90
days were consistent throughout
both examples, but aging
fluctuated just 2% when revenue
was stable, however the aging
fluctuated 8% in the example
where revenue was inconsistent.
Sharp revenue fluctuations will
not effect your aged AR for 90
days. There should not be an
expectation that aged dollars will
drop as quickly as the overall AR
when an sharp revenue drop is
experienced.
The Aging % does not always
give you an accurate picture of
the status of your aged AR.
ALWAYS LOOK AT THE DOLLARS
AGED OVER 90 IN
CONJUNCTION WITH THE
PERCENT AGED OVER 90

STAY AHEAD OF REVENUE FLUCTUATION WAVES
1. Revenue
2. Unbilled
3. Claim Submissions
4. Cash Projections
5. Cash Collections
6. Accounts Receivable Balance & AR Days
7. Accounts Receivable Aging
MONTIOR THESE METRICS WEEKLY

A Smooth Sea Never
Made a Skillful Sailor
– Franklin D. Roosevelt
QUESTIONS?

COVID-19 Support: Weathering the Revenue Fluctuation Storm

Recommended

Recommended

More Related Content

What's hot

What's hot (6)

Similar to COVID-19 Support: Weathering the Revenue Fluctuation Storm

Similar to COVID-19 Support: Weathering the Revenue Fluctuation Storm (20)

More from Healthcare Resource Group Inc.

More from Healthcare Resource Group Inc. (20)

Recently uploaded

Recently uploaded (20)

COVID-19 Support: Weathering the Revenue Fluctuation Storm