How Has the "206 Effect" Delayed Your Healthcare Billing During COVID-19?

There have been a lot of updates in the healthcare world with COVID-19 ensuring patients are cared for safely, shielding staff, as well as changing billing and visit requirements.

Accounts Receivables

In the financial realm, securing grant funds, and ensuring payables and payroll are processed, as well as, maintained is a priority many are dealing with.

To this point, how are your accounts receivables during this time of COVID-19?

Most payer class revenues are OK but down from the normal, and we are starting to see a slow uptick.
Aging classes are OK but some slow impact for a few weeks as payers made policy transitions as we all did.
Credit balances and unapplied categories have increased.

Unapplied & Credit Balances

Many entities are seeing unapplied and credit balances increase by double-digit percentages with questions as to the cause. These increases are generally a result of dual collections:

Copays and deductibles being collected at the time of service in addition to payers making temporary policy changes and reimbursing many copay and deductible amounts.
On the patient side, we have heard of cases where dedicated patients have insisted on paying the fees and have stated “refund me if too much….” versus the potential of owing any balances.

These insurance carrier revisions have been positive for most patients and families. While meant to be positive for medical entities and providers, payer policy amendments have been at times overwhelming and confusing.

Billing Changes Implemented

An engaged PHO recently distributed a listing of all COVID-19 billing changes implemented by their payers during the virus outbreak. When tallied, these modifications total 206 specific changes; an overwhelming number for many entities.

The information outlines temporary payer changes in modifier and CPT code use, as well as, changes in use of HFCA fields and modifications to out of pocket collection amounts.

Kumar Choudhuri, Managing Partner at Accel Healthcare Resources and partner of RDI Healthcare has also seen billing issues for clients arising out of this “206 Effect” for many entities revenues:

“Early in the pandemic, specific billing instructions for office visits and telemedicine sessions were changing frequently and were not always available on payer websites or to call center representatives. To further confuse the situation, variances occurred from payer to payer. The most common rejection we were seeing was use of modifiers and correct POS code; many were confused on correct use.

Through a process of denial management research, calling payers and researching websites, we were able to determine the correct coding for most plans. We have established an internal process using cross-reference charts to avoid denial errors for visits and telemedicine billing. The end result is we presently have less than 1% of denials falling in this category.”

Managing Receivable Balances

In addition to monitoring payer policy revisions and reimbursement rates, ongoing review of entity revenue indicators during this time can have positive results. Net and gross collection rates, AR days, movement in adjustment rates, and adjustment categories can be pivotal keys in managing receivables balances under COVID-19.

Billing & Revenues

The timing of continued outbreaks will drive decisions to extend changes in billing and payer guidelines, in addition to updates on specific issues such as telemedicine services. Keep an ongoing eye on billings and revenues through the COVID-19 outbreak – feel free to bypass the “206 Effect” of delays and rejections in your revenue cycle results.

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Chuck Hutchings
Director of Healthcare Operations & Strategy