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How ASCs can increase profitability — 8 key steps for out-of-network success

How can you significantly increase your ambulatory surgery center's profit through out of network reimbursement?

John Bartos, JD, CEO of CollectRx, presented a webinar discussing how ambulatory surgery centers can maximize profits with out-of-network reimbursement rates. In-network rates are locked in, and Medicare is inflexible. But there is another option available. "Out-of-network represents the last great opportunity for many providers to bring more dollars in the door to increase the bottom line," said Mr. Bartos.

There are many people predicting out-of-network reimbursement is disappearing. But there are still opportunities in many markets. Mr. Bartos says providers can, and should, make OON part of their revenue cycle strategy because:

• Patients demand choice of providers
• There is $60 billion in out-of-network claims paid annually
• Continued growth in PPO enrollment
• ACA will lead to more OON patients
• People want insurance policies with OON benefits

PPO enrollment has more than doubled since HMO has declined; around 66 percent of members have a PPO experience each year. Additionally, with ACA implementation, Mr. Bartos thinks PPO participation will rise as the number of people insured increased and there is an narrow networks growth accelerates.

Despite insurance company efforts to squash it, OON reimbursements are close to double in-network reimbursement. And even though OON reimbursements are higher, there is still opportunity for growth. CollectRX generates around $127,966 per year in additional out-of network payments.

"The key is to invest: invest in the people, resources and processes to take advantage of the out-of-network opportunities," said Mr. Bartos. There are a few strategies used to minimize OON, including individual bill reduction and global discount agreements.

Payers attempt to negotiate down single case rate agreements or use UCR re-pricing. The negotiations occur when insurance companies send a fax to providers to negotiate a settlement for a large discount for the bill after services are provided but before payments are made. UCR re-pricing happens when the insurance company pulls down the UCR payment close to Medicare; after the bill is re-priced, the insurance company sends the bill and feels nothing else needs to be done.

Insurance companies outsource bill-to-bill reduction tactics, and $5 billion per year is taken in reduced payments. To combat the payers' bill reduction, here are eight keys:

1. Time and persistence — On any given case, you may need to write multiple letters and make calls to gain full out-of-network reimbursement and make appeals.

2. Focus — Your team could be pulled in many directions; dealing with OON is one of dozens of tasks ASC teams are juggling each day. But maintain focus to execute OON strategy for success.

3. Specialized out-of-network experience — There is a lot of specialized knowledge you need to be successful, including reviewing EOBs, assigning benefits, documenting all calls and recording reference numbers. Additionally, a well-drafted AOB should assign the right to appeal and right to documentation, and properly reference ERISA and a full and fair review of claims.

4. Comparable data — Obtain the data to prove the insurance company's reimbursement was inadequate. Show the paid rate isn't consistent with your usual provider levels and other providers in the community.

5. Knowledge of payer incentives — Figure out what drives payers as a customer and provider. It can be helpful to have people on your team that come from those organizations who understand how they work and operate.

6. Rigorous appeals — Appeals occur when the payer re-prices the bill at a low amount and you are trying to reengage the payer for a second engagement. The insurance company feels they are done, and now it's up to the ASC to change their mind. The process includes:

• Conduct initial intake to ensure you have the documentation necessary to handle the claim
• Contact payers to verify payer bill information
• Devise an appropriate strategy for the claim; formulate facts and arguments to make to the payer
• Engage with the payer and present the facts and argument; this could mean writing letters and making calls every day, and escalating when necessary
• The payer follow-up; make sure you get paid

7. Out-of-network audits — Audit your claims to make sure you have the right reimbursement. Identify accounts potentially recoverable underpayments and begin the appeal processes.

8. Healthcare reimbursement attorneys — Having attorneys available is helpful if you decide to escalate the appeals process.

For the global discount agreements — third party rental network agreements and continuous discount agreements—the ASC can take action. There is typically no patient steerage from these third party contractor rates and the patients are unabow — aware they've been entered into these agreements. Payers are not required to access the contracts.

The key issues to consider here are:

1. Are rates adequate?
2. Are rates based on allowed or billed charges?
3. Which payers have the right to access?
4. No logo requirements
5. No notice requirements
6. No provider directories
7. Are payers applying in-network discounts but using higher deductibles and co-pays?
8. Multiple procedure reductions and other edits
9. Incorporates provider handbooks
10. Terminate "evergreen" clauses with 180 days notice

"I liken the situation to a person trying to decide whether to represent themselves in the lawsuit or higher a lawyer. A layperson can represent themselves, but a lay person doesn't know how to gather the facts and support the argument. A layperson can do it, but is it their best chance for success?" said Mr. Bartos.

Click here to view the presentation.

More articles on surgery centers:
10 hospitals & health systems opening ASCs—July 14, 2015
14 observations and thoughts and issues for ASCs 2015-2016
Flipping HOPDs to ASCs: A new industry trend? 5 key thoughts from ASCOA CEO Luke Lambert

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