The COVID-19 pandemic of 2020 has led to seismic shifts in almost all aspects of everyday life, but arguably not a single industry has been affected as much as healthcare. But, could the pursuant changes have a positive impact? There are several reasons that might be the case.
How could the results of the pandemic benefit your medical practice in 2021?
Less Red Tape with New 2021 E/M Code Changes
Beginning January 1, 2021, the largest evaluation and management (E/M) visit codes changes are going into effect since 1997. This will change the way physicians are required to code and document patient information.
The good news is the codes are designed to ease the administrative burdens of physicians, requiring less non-essential information to be collected and recorded with each patient visit. Essentially, there may be fewer hoops to jump through to document medical visits enabling medically necessary decisions to be made more efficiently.
What remains unclear is how these changes could affect revenue based on E/M code distribution. Physicians who code based on medical decision-making, for example, may now need a new billing model. Currently, with so many variables at play, we cannot predict the exact financial impact. The key will be to stay abreast of the latest information and consult with your financial advisor about how to best handle any potential changes to your practice revenue and resulting income.
Additional Paycheck Protection Program (PPP) Assistance
The Consolidated Appropriations Act, 2021 passed into law on December 27th, 2020 made some key material changes to the PPP program enacted under the CARES Act in the spring. In addition to changes in the PPP coverage period and a simplified forgiveness application process, Title III of this Act allows eligible businesses to receive a second PPP loan, referred to as a “second draw.”
The second draw loan amount will be calculated in the same manner as the original PPP loans, offering up to 2.5 times the average total monthly payroll costs in the one year prior to the loan. However, the “second draw” will be capped at $2 million.
If you are eligible, this could be a prime opportunity to put some extra cash in your practice coffers should things drastically change in the near future.
Acceleration of Telemedicine
One of the most apparent changes in healthcare is the massive shift of patients to telemedicine. Now, approximately 48% of physicians are treating patients via telehealth, compared to only 18% in 2018.
Why the sudden shift? The Centers for Medicare & Medicaid Services announced it would finally reimburse doctors for telehealth calls at the same rate as the standard in-person rates. Doctors are also now permitted to use non-HIPAA compliant technologies such as Skype, Zoom, or Facetime to treat virtual patients without penalty. In addition, there are also virtual meeting platforms designed specifically for medical practices that are available.
Essentially, physicians are able to see more patients in less time and with less potential of spreading COVID-19 and other potentially deadly contagions.
Reduced Staffing Needs
If fewer patients are visiting the office in person, but more patients are being seen, you may be able to cut back on some of your staffing expenses. Of course, if you have accepted a PPP loan and are seeking loan forgiveness, keep in mind you will need to use a certain portion of those funds to keep, bring back, or maintain payroll for the covered period as outlined on the SBA website.
Opportunity to Build Up a Cash Reserve
When combined in whole or in part, the above opportunities could create a prime window of opportunity for physicians to build up a cash reserve. Between additional PPP assistance, a potential increase in patient volume, and the ability to save time and resources due to the E/M changes and telemedicine, you may find yourself with the unique ability to put some extra cash away. As 2020 has reminded each of us, life can change in an instant, and a healthy cash reserve can help to ease potential burdens resulting from the unknown.
Guidance for Physicians at all Stages
As a medical professional, you will likely always need some financial guidance as your needs, the world, and healthcare grow and change. The advisors at Atlanta Financial are here to help. We specialize in guiding physicians through all stages of their careers to build the lives they imagine while still tending to the high demands of their job.
If this type of financial relationship sounds right to you, we encourage you to reach out and schedule some time on our calendar or call the office directly at 770-261-5381. We look forward to meeting you.