During the first quarter of the year, many practices struggle with cash flow stagnation caused when deductibles reset and thus the whole burden of payment falls on patients. There is also a current trend of increasing health insurance costs such as higher deductibles, premiums and copays that will shift even more financial burden to patients and is likely to further exacerbate this issue for practices in 2021. This means it is more important than ever for practices to effectively manage their cash flow to ensure they are able to weather any unexpected financial issues that might occur throughout this year.
According to a 2017 survey, 68 percent of patients want their healthcare providers to offer digital payments options. A 2019 study found that 81 percent of consumers want their healthcare providers to provide more online payment options and that 71 percent want to be able to receive electronic statements from their providers. Needless to say, demand for such online payment options is rapidly increasing as the years go by.
In recent years, the ability to provide patients with better and more convenient online payment options has become much more of a necessity. In fact, one study found that 81 percent of consumers want their healthcare providers to provide more online payment options and that 71 percent want to be able to receive electronic statements from their providers. To remain competitive in today’s market, practices need to have a payments solution. More than that, they need to have the right payments solution for their needs.
In the chaotic initial weeks of the COVID-19 pandemic, millions of small businesses (including many specialty practices) in the U.S. found themselves forced to close their doors. To retain staff and avoid furloughs, many specialty practices had no choice but to submit applications to secure Paycheck Protection Program (PPP) loans, offered by the Small Business Administration (SBA), that would make it possible for them to keep paying their employees during a period when revenue was reduced to almost nothing.
The arrival of the COVID-19 pandemic earlier this year disrupted the American healthcare industry as few events before ever have. Practices were forced to close and elective procedures were temporarily suspended, leaving many in private practice in difficult financial positions. According to a McKinsey & Company survey conducted just six weeks into the pandemic, 53 percent of all independent physicians reported they were worried about their practices’ ability to survive the financial challenges of COVID-19.
The COVID-19 pandemic has been an eye-opener when it comes to healthcare technology. One of the most extreme surges as a result of the pandemic has of course been in telehealth usage. However, there is another technology that has also proven to be even more beneficial to specialty practices than previously realized—Cloud-based solutions. When lockdowns and non-emergent care suspensions began, many practices suddenly found themselves unable to operate because they were still using server-based EHR and Practice Management solutions that required them to be in the office. Meanwhile, practices with cloud solutions were able to shift to remote operations with relative ease.
The COVID-19 pandemic has impacted nearly every facet of our lives in recent months. We've all had to adapt to a new normal of social distancing measures and lockdown orders. Health insurance companies have not been immune to these changes and they too have had no choice but to evolve in this rapidly changing world. As restrictions are relaxed and practices return to business (though perhaps not business as usual), it is important for healthcare providers to be aware of how health insurance companies have been affected by this unprecedented event.
IMPORTANT NOTICE: As of April 26, 2020, CMS has suspended the Advanced Payment Program, effective immediately, and is reevaluating the Accelerated Payment Program. CMS Press Release on Program Suspension The current COVID-19 pandemic has impacted specialty practices across the country and around the world, resulting in low patient volumes and decreased revenues. As part of the CARES Act, the Centers for Medicare & Medicaid Services (CMS) authorized relief to providers in the form of Advanced Medicare Payments. However, it is important for providers to note that this Advance Payment Program is an interest free loan, not a grant.