Administrative demands have always been a complex area in the healthcare industry. Almost overnight in March 2020, payers and providers had to figure out how to process and provide care to those in need with new safety guidelines and restrictions. As the recovery process from COVID-19 begins, payers and providers are beginning to navigate the gains, losses, and lessons learned during the last year. Prior to the pandemic, lines of communication between payers and providers usually proved to be complicated. Contract renegotiations between payers and providers moving forward will have a lot more to consider based on what did and didn’t work during the initial COVID-19 response. As payers, providers, and patients try to recover a sense of normalcy after COVID-19 and reevaluate their day-to-day-operations, here are a few areas that are being reviewed through a new lens post-pandemic.
Payment Models: Fee-for-Service and Value-Based
Prior to the onset of COVID-19, the pros and cons of fee-for-service (FFS) and value-based care models has been an ongoing conversation between payers and providers. Those same conversations are continuing to happen, but from a new angle after the financial stress many healthcare systems felt due to COVID-19 restrictions. The shortcomings of the fee-for-service model were exposed as payers and providers navigated the different safety guidelines put in place because of COVID-19. Healthcare systems who are still utilizing a fee-for-service model felt the strain on their bottom line when elective procedures were put on hold and patients avoided care due to fear of contracting the virus in a healthcare setting.
According to a survey conducted by the American Medical Association in the summer of 2020, average in-person visits fell from 95 to 57 per week and despite the telehealth increase, almost 70% of physicians were still providing fewer total visits (in-person and telehealth) at the time of the survey than pre-pandemic.
Today, many in the healthcare industry argue that value-based care can offer more resiliency to healthcare systems moving forward. The value-based care approach allows physicians to focus solely on providing high-quality care that results in better patient outcomes, rather than increasing the volume at which they see patients in order to receive proper reimbursement. Even though value-based care offers a more secure revenue stream for providers, it doesn’t come without complexities or concerns. The necessary data alignment and management needed between entities to ensure the approach can be sustained and effective is a long-term investment for many in the healthcare industry.
Reimbursement Rates: Telemedicine
COVID-19 has also pushed payers and providers into deeper conversations regarding equitable telehealth reimbursements. One of the biggest shifts in healthcare due to COVID-19 was the drastic increase in the virtual care approach, telemedicine. Despite telehealth services being available for more than a decade and providers advocating for the adoption of such care routes, alignment on reimbursement rates has been slow to evolve in the past.
When the onset of the pandemic occurred, the usage of telehealth services accelerated after the Center of Disease Control encouraged social distancing and payers were forced to reexamine the parameters of telehealth coverage and reimbursement. In February 2020, the Center of Disease Control (CDC) issued a statement advising everyone and healthcare providers in areas affected by COVID-19 to adopt social distancing practices due to the ease of transmission, specifically recommending that healthcare facilities and providers offer clinical services through virtual means such as telehealth.
According to a poll in the Wall Street Journal, one of the biggest concerns of providers is the lack or low reimbursement for telehealth care. Despite the many benefits of telehealth services and the expansion of coverage, some providers are still nervous about reimbursement rates post pandemic. In April 2020, CMS added more than 80 new telehealth services to the list of services covered by Medicare during the pandemic and stated that all connected health services were going to be reimbursed at the same rate as in-person services. These flexibilities benefited not only patients who were in need of care, but it has helped providers who have struggled to replace lost revenue. However, providers, especially those of smaller practices, are worried about those flexibilities expiring and telehealth no longer being reimbursed at the same rate as in-person visits as the recovery from COVID-19 continues.
Signature Assists with Administrative Healthcare Demands
At Signature Performance, our commitment to improving the health of our clients’ business and making the lives of the people we work with better is a mission our team is passionate about every day. We are dedicated to making a lasting impact in the nexus of healthcare by inhabiting the payer, provider, federal and community sectors.
Our experience on both the payer and provider side of the business is what allows our team the opportunity to evaluate healthcare industry issues from a variety of perspectives and create custom solutions that get to the core of some of the biggest challenges facing healthcare today. That perspective is more important than ever before as the recovery process of COVID-19 is underway and the new normal in our healthcare system is established. We believe the healthcare industry in the United States deserves only the best, and that sentiment is what motivates our dedicated team to do our very best each and every day. It’s our calling to bend the cost of healthcare administration by improving overall quality and minimizing resources.
Rick Pane is the Chief Financial Officer at Signature Performance Inc., in Omaha, NE. Signature Performance is an industry leader in reducing healthcare administration costs for private and public healthcare sectors. Our unmatched experience in serving both the payer and provider side of healthcare financial management allows us to implement innovative solutions for every administrative demand.