COVID-19: Cash Acceleration | FTI Consulting

COVID-19: Cash Acceleration in Revenue Cycle Management

Healthcare & Life Sciences

April 9, 2020

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Despite disruption to normal business operations resulting from the COVID-19 crisis, provider organizations will continue to incur expenses and, with few exceptions, must still pay their bills each month. Although these obligations may be manageable in the short term, the path to a financially stable future grows more challenging with every day that passes in this new reality. Provider organizations are finding themselves in positions of decreased cash flow, largely due to shifts in volume and disruption to normal revenue cycle operations. 

Exacerbating the issue, public health guidelines are encouraging providers to send certain employees home, including revenue cycle staff, which can significantly impact collections productivity. Unless actions are taken now, cash flows could continue to worsen and may take months, if not years, to fully recover. Fortunately, there are recovery strategies and best practices that healthcare providers can implement now to accelerate cash and achieve financial resilience. By actively addressing and re-evaluating business operations in this “new normal,” provider organizations will be in a position to mitigate the lasting effects of COVID-19.

Provider organizations are facing unprecedented challenges brought on by the COVID-19 pandemic and are responding in truly extraordinary ways to quickly and effectively meet the needs of their patients, employees and communities. The impact of COVID-19 on provider cash flows is significant when examining key performance indicators (KPIs) such as unbilled/discharged not final billed (DNFB), net days in accounts receivable (AR), bad debt, and cash collection of net revenue. Changes in these important indicators are significant, as they often lead to decreases in revenue, patient volume, profit margin and patient satisfaction.


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