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Saving the safety net by saving its bottom line

When you think about the causes of safety net hospitals’ current crisis, revenue cycle management is likely not the first thing that comes to mind. Their predicament generally has been attributed to a toxic combination of COVID burnout, a fragmented reimbursement system, rising costs and aging infrastructure. To that litany you can now add the ending of pandemic-era rules that vastly expanded access to Medicaid. Millions of beneficiaries are about to lose coverage, including many who still qualify but lack the wherewithal to ensure that they continue to receive life-saving benefits.

For us at Salud, this is a slow-moving catastrophe that requires an all-hands-on-deck response. We’ve helped right the ship for many safety net hospitals and systems and are looking to do much more.

The situation is dire:

  • From 2010 to 2022, 75 safety net hospitals closed their doors, including 44 critical access hospitals, which receive a higher rate of reimbursement in return for treating disadvantaged patients. Many more are on the brink of closing services and entire facilities.

  • Aggregate operating margins for safety net hospitals have fallen well below break-even, not even accounting for the loss of billions in COVID add-on payments.

  • As of May 11, states are allowed to begin checking every beneficiary’s eligibility for Medicaid for the first time in three years, a process that could cause as many as 14 million people to lose this lifeline by year’s end.

A study published recently in JAMA Network Open examined the operating margins of 4,219 safety-net hospitals. In addition to their higher rates of uncompensated care and treatment of disadvantaged patient populations, these hospitals’ provision of essential but insufficiently reimbursed services such as burn care, inpatient psychiatry, and primary care were associated with lower operating margins.

So how can revenue cycle management help? The means are manifold:

  • Simplify the complexity of documentation, coding and billing by turning to experts in these matters. At Salud, our proprietary automated claims scrubber flags incorrect claims, denials and underpayments to help providers recoup lost revenue.

  • We work with patients on how to pay their out-of-pocket healthcare costs or gain access to payment assistance programs.

  • Bring specialized knowledge to the table. Our team, having worked with dozens of safety net hospitals over decades, is steeped in Medicaid payment rules, navigating access to coverage and adapting the Meditech electronic medical records system favored by many safety net providers to the needs of claims processing.

We share the mission of safety net hospitals and look to partner with them to keep vital services alive and well. We understand that when the only hospital in a region closes, the quality of life takes a serious body blow. A hospital closure often is linked to sharp downturns in a community’s population, economic status and government revenue.

Recent reporting on the impact of safety net hospital closures has found a ripple effect on other providers, even in big cities such as Atlanta and Philadelphia. Other safety nets struggle to pick up the slack. Over time, studies have linked closures to increased mortality rates even if the closed facility is in a medical corridor.

We care about community health and make the connections that enable it. I think about the giant vendors with 50,000 or more employees who keep on growing through acquisitions. The more they grow, the less they connect to the communities being served. We just had a data scientist join our team from one of those behemoths. She mentioned that she had met more clients in three days with our company than during her entire tenure at the other company.

It sounds presumptuous to say we are more attentive to client and patient needs, but it’s true. We saw one client really struggle with a Meditech rollout, which is not our normal purview, but when asked we stepped into the breach and pieced together fixes for open projects that may not have even been tested. The hospital’s offshore coding vendor never joined online meetings surrounding the install.

We do these things not only because caring is in our company DNA but because if something goes wrong it affects our reputation, even if none of it is “our fault.” That's the kind of thing that perhaps another vendor might not stick their neck out to do.

Putting ourselves on the line even if it’s not spelled out in a contract is part of helping essential safety net hospitals fulfill the mission of caring for those who otherwise have no other access to healthcare. We are proud to be their partners.


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