The coronavirus (COVID-19) is greatly affecting healthcare providers, with impacts that go beyond the challenges they face on the front lines of the crisis. These impacts may include material changes to typical patient utilization patterns and increasing labor, medical supply, and medical equipment expenditures and their related impacts to cash flow. In these uncertain times, payers may consider adopting different payment programs to support the financial stability of their provider networks.
Payment programs modeled off Medicare's Periodic Interim Payments (PIP) program may be able to provide a financial lifeline to the provider community as COVID-19 increasingly disrupts a providers cash flow. In addition to helping secure the strength of network providers, a “PIP-like” program could establish a set of partnerships to build upon as the crisis recedes.
A program modeled after PIP could see payers sending a regular, recurring advance payment to providers based on an average of historical claim volume from a determined historical time period. The advances would be offset by subsequent claims billed and approved for payment. This process could help stabilize cash flows, both now and potentially in the future, post crisis.