Shifting payer mix due to COVID-19 putting pressure on radiology practice margins
The COVID-19 pandemic and the corresponding economic downturn is shaking up the U.S. payer mix and forcing radiology practices to rethink future revenue projections.
After three years of decline, the crisis has markedly increased the number of individual covered by Medicaid, for instance, up to 72.3 million. And the pandemic stripped an estimated 5.4 million American workers of their insurance through May amid widespread job losses.
The Radiology Business Management Association highlighted these trends on Monday while noting that the uninsured rates could leap even higher, once COBRA and other safety net services expire. According to one Kaiser Family Foundation analysis, if those who lost their jobs during the crisis are not rehired, some 17 million could become eligible for government insurance.
“From a practice leader’s perspective, as Medicaid enrollment increases, a shrinking percentage of people with employer-sponsored and other private health plans that typically reimburse higher than Medicare and Medicaid could spell financial trouble due to a less advantageous mix of payers,” the association advised on July 27.
With this shift, leaders will be forced to take action, including lowering the cost of imaging procedures to “ensure adequate reimbursement” at those modified rates. RBMA also advised its members to chronicle cases carefully “so that money is not left on the table due to downcoding for lack of documentation.”
Joshua Liao, MD, with the University of Washington in Seattle, also recently mentioned this trend in a commentary published July 10 in JACR. He predicted that the “abrupt change in payer mix could adversely affect providers,” prompting them to rewrite financial predictions and their ability to provide certain services.
He suggested participating in new payment models—such as accountable care organizations or capitated outpatient radiology contracts—as one way to counter these trends.
“As they recover from COVID-19, practices have an opportunity to anticipate these changes and adopt strategies that can meet the needs of patients under new payer mix and benefits plans,” Liao advised.
A key piece of the puzzle will also be working with hospital systems to ensure that newly uninsured patients are aware of their options when they come in for an imaging service. Financial coordinators could provide info on signing up for Medicaid and support patients through this process, said Sandy Coffta VP of client services for Healthcare Administrative Partners.
“This would benefit the facility as well as radiologists,” she told Radiology Business. “While Medicaid doesn’t pay as much as commercial or managed care plans, the collection ratio is typically much higher than self-pay services,” she added.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.