COVID, MA Carve-In Can Complicate Hospice Revenue Cycle Management

Focusing on revenue cycle management will be critical as hospices step into Medicare Advantage in 2021 and face the threat of a new wave of COVID-19 cases. This new payment arena and a global pandemic have strained many hospices’ bottom lines during 2020, with providers increasingly furrowing their brows over the long-term impacts.

A report last week from the U.S. Centers for Disease Control and Prevention (CDC) predicts that an estimated 50,000 to 240,000 new COVID-19 cases will likely be reported before the end of November, citing a rise in reported cases over the last several weeks as an indicator. The novel coronavirus pandemic has hit hospice revenues hard, with many providers anticipating a decrease in annual revenues for 2020, according to recent research by the National Association for Home Care & Hospice (NAHC).

The necessity of responding to the pandemic has led to disruptions in care delivery and slowed operational and billing processes. Providers have struggled to access patients living in nursing home facilities and hospital settings, and many have seen declines in their patient censuses and admission rates. A divided remote workforce has also stretched hospices thin with greater room for billing error.


“On the revenue side, it was a huge adjustment for a lot of agencies who obviously operate in a brick-and-mortar building during COVID,” said Delaine Henry, CEO of Advanced Hospice Management, a billing service provider based in New Orleans. “It was difficult to send their staff home to work and to try to keep a cohesive team and a cohesive revenue process. The pre-bill team, who manages documentation and makes sure all of the requirements are met before billing, had a difficult time adjusting to doing that remotely as opposed to doing it in weekly team meetings or weekly clinical meetings. The revenue cycle itself slowed way down.”

The cost of doing business has gone up for many providers during the COVID-19 pandemic with drops in patient admissions and shortened lengths of stay as contributing factors, calling greater attention to persisting issues in sustaining the cost of delivering end-of-life care.

“In terms of immediate impacts from the pandemic, to suddenly go from a profitable inpatient unit to a pretty big loss center on the financials was a tough pill to swallow for many of our agencies,” Aaron Blackmor, CEO of Blackmor, CPA, an accounting firm for hospice agencies. “They were seeing a lot more of a move toward ‘brink-of-death’ care where the whole care term lasts seven days or less, whereas hospice was designed to be on average a longer overall length of stay. When that average becomes less, you start to see how quickly the financial picture can go from a sustainable reimbursement model to a completely unsustainable model that almost entirely depends on the length of stay of your current admissions group.”


With COVID-19 resurging nationwide, reimbursement for end-of-life services could be impacted in the long term as providers prepare for a new payment environment coming in 2021. Beginning in January, the U.S. Centers for Medicare & Medicaid Services (CMS) will add a hospice component to the Medicare Advantage Value-Based Insurance Design (VBID) Model. Commonly called the hospice carve-in, the payment demonstration project presents additional challenges for providers’ revenue cycle management.

Concerns abound over the shift towards value-based care delivery and how it will impact hospice reimbursement with new processes for billing departments. Timely attention to unclaimed billing and increased collaboration between clinical and financial staff will be essential for providers amid potential lags in cash flow as hospices enter a new payment environment filled with uncertainty.

Hospices with efficient electronic medical record (EMR) systems may have a leg up on the competition with the ability to track patient data to support denied insurance claims.

“To have a percentage of your claims move from relative certainty under traditional Medicare into relative obscurity of Medicare Advantage is a big concern,” said Blackmor. “I’m concerned about the EMR anomalies and the ability to record revenue accurately when the Medicare Advantage plan kicks in and we start seeing double or duplicated claims show up. We’re concerned about the quality of data from soup to nuts, from point A all the way to point Z. Is it going to be harder to bill and collect, and are hospice’s EMR systems going to be able to respond? Hospices just can’t afford a lot of claim write-offs in a slim margin service area before their entire profit margin for the year is eroded.”

Dredging through the COVID-19 quagmire and implementation of the Medicare Advantage demonstration will create dual roadblocks for hospice providers in the coming year. Building up billing teams and ensuring consistent communication among interdisciplinary teams will be key to navigate times ahead.

“There’s a lot of moving parts going forward,” said Jen Kiehl, chief operating officer of All Caring Hospice/Alliance Hospice and Palliative Care in Pennsylvania. “As it all drills down to revenue cycle management, we have to make sure we have a solid team of people working it, a solid back-up plan and the ability to utilize all of our technology to continue to manage revenue cycle, insurance claims and [billing] follow up so that our revenue stream is not impacted by COVID-19 or by the Medicare Advantage, or by a combination of the two. It’s important that everybody has a game plan going forward to make sure that your revenue cycle management stays intact. The goal is to try to recruit almost a back-up team and have somebody on the backend of billing who stays on top of things and keeps their finger on the pulse. When you walk into a different crisis every day, it’s really easy to lose sight of things. Consistency from a billing company with no interruptions can be a seamless process and one less thing to lose sleep over.”

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