Beyond the basics: 3 approaches to next-level ASC revenue cycle management
The place to start, as with any process, is at the core. Master the fundamental revenue cycle metrics before moving on to more advanced processes. "If something in the revenue cycle is not working, always return to the basics," says Barbara Pulliam, BS, CASC, vice president of revenue cycle with Surgical Management Professionals. Essential metrics to track include:
• Days in accounts receivable
• Days in A/R over 90
• Total collections
• Amount of denials
• Average reimbursement per case
• Clean vs. denied claims
Underutilized strategies and tools
The ASC industry is brimming with expertly crafted strategy and innovative tools, many of which are underused. Here are four ideas to create a more robust revenue cycle management approach.
• Days in A/R by payer type. Days in A/R has a general number is useful, but breaking apart that number allows ASC leaders to understand any problem areas and to create a line of attack to bring the days back to the target benchmark. Track A/R days by in-network and out-of-network payers. "Due to contractual agreement with in-network payers, days in A/R should be relatively stable on a monthly basis. Any volatility should be a giant red flag to management," says Rich Searles, a partner with Merritt Healthcare. "Conversely, OON network payer days are usually greater and more volatile. Management should be aware of the volatility and view monthly variance as expected, but not ignored."
ASC leaders can push this strategy a step further and track A/R days by each specific payer. "The key is to thoroughly understand each individual payer contract," says LeAndra Stencel, regional operations manager –ASC with abeo. "From reimbursement allowances on implants to multi-procedure discounts ASC leaders need to understand contracts to maximize a center's reimbursement potential."
• Projected monthly revenue. Projected monthly revenue allows ASC leaders to compare expected performance, based on benchmarks and historical performance, to actual outcomes. This approach allows for the analysis of revenue cycle processes. Are they working and what could be done better? The greater the detail of the data, the greater the accuracy. Mr. Searles recommends tracking:
o Average reimbursement per payer by case type or specialty
o Days in A/R by payer
o Patient responsibility estimates
o Bad debt rate
"Ultimately, the projection calculus should be detailed enough to be useful and not extremely time intensive so that is can be recreated on a monthly basis with relative ease," he says.
• Patient accounting software. Many ASCs have some form a patient accounting software, but Ms. Pulliam has observed that this software is rarely used to its full potential. Accounting software generally offers features such as insurance verification, estimation of patient financial responsibility, under and overpayment tracking and more, all of which serve to eliminate hitches in revenue cycle. "By utilizing the various tools offered by the software, the entire process can be made much smoother and faster," says Ms. Pulliam.
Explore the software and ensure all staff members using it understand the key functions. Whether due to turnover or lack of training, staff may be unfamiliar with the system. Spend the time to get staff up to speed on the software. "Cross train personnel and ensure enough staff is there to get the job done," she says. "Don't be afraid to try new products that will interface with your system."
Putting the data to work
Gathering and tracking data is a crucial element of revenue cycle management, but it is powerless to affect change, or improvement, if leaders do not use it. "Data should always be used to improve performance. Look for any obstructions in the process and remove them," says Ms. Pulliam. "Revenue cycle is a like a car, if you don't maintain it properly it will not run properly."
As near to perfect as possible revenue cycle management processes not only serve to bring in as much money as possible, but also serves as preparation for the shift in payment models and care delivery. "Keep your revenue cycle as tight as possible," says Joan Dentler, President and CEO of Avanza Healthcare Strategies. "But, the real question — are you ready for the new types of revenue coming down the road? Are you prepared for what ASCs will need to be in 2020?"
More Articles on Coding and Billing:
Partnership Pitfall: What Happens to ASC Software After Joint Venturing?
4 Questions to Ask Before Purchasing an EHR
Bundled Payments Save $33M in Cancer Care: How Can Other Specialties Do the Same?
© Copyright ASC COMMUNICATIONS 2014. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.
To receive the latest hospital and health system business and legal news and analysis from Becker's Hospital Review, sign-up for the free Becker's Hospital Review E-weekly by clicking here.
New From Becker's ASC Review
iMedX acquires 2 medical documentation companiesRead Now
- Consumer and clinician opinions on big data, telehealth and mHealth: 8 things to know
- Innovation's moral quandary: When am I obligated to reinvent the wheel?
- House Republicans sue Obama administration over PPACA: 5 things to know
- Just 1% of organizations will eliminate healthcare coverage, survey finds
- DOJ recovers $2.3B in healthcare False Claims Act cases in FY 2014