Written By: Dan Geelhoed
The Ongoing Cost of COVID-19
The COVID-19 pandemic has driven revenues down for nearly every industry especially the healthcare industry. In particular, the widespread decision of practically all U.S. hospitals this past spring to suspend elective surgeries and services proved to be extremely costly.
According to data gathered by the Crowe Revenue Cycle Analytics (Crowe RCA) with very few outliers, “health systems across the United States experienced an average decline in patient volume of 56%… this equates to an estimated national decline of $1.44 billion in net revenue per day for hospitals with more than 100 beds.”
The Role of Internal Audit
Prior to the COVID-19 outbreak, hospitals routinely suffered operational lapses and financial leakage as a typical cost of doing business. To counter these gaps, many healthcare systems depend on their Internal Audit department to better understand the cause of errors and put measures in place to stop them. No matter how meticulous these departments have become, they alone cannot cover the full scope of the problem and are forced to make priority decisions about which process gaps to address.
With few exceptions, Internal Audit teams chose to prioritize processes related to the hospital’s core charter: delivering patient care. For the sake of limited time and resources, auditors are often forced to leave some cost-cycle and financial leakage issues unattended or un-resolved.
The Current Environment
At present, amid a global pandemic, Internal Audit groups remain more focused than ever on supporting policies and procedures that are directly related to caring for patients. Sadly, a staggering volume of revenue loss continues to go unchecked as staff sizes have been reduced, operations have suffered, fraud has increased, and compliance has lapsed. Although many hospitals have resumed elective services throughout July and into August – enough time has already passed to cause severe revenue shortfalls.
Recovery Audit: Why is it Important?
Recovery Audit can serve as a vital part of an Internal Audit by discovering and returning hard dollars to the hospital’s bottom line. At the same time, a Recovery Audit is also an effective tool to uncover compliance issues, control gaps and operational concerns in the financial department, the procure-to-pay process and the cost cycle.
In our 27 years of experience, SpendMend has observed that Internal Audit groups gain a dramatic increase in visibility when leveraging a Recovery Audit. At a time when the system has been strained and resources are particularly scarce, the additional funds and insights delivered by a Recovery Audit can potentially be the difference between a hospital’s ability to deliver crucial patient care… or not.
By championing a Recovery Audit project, the Internal Audit department is easing the burden on their own department, mitigating the impact of financial loss, helping to reinstate best practices, and most importantly doing their utmost to support patient care.