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How to Best Merge ASC Billing Operations After a Transaction: 3 Experts Weigh In

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The merging of ambulatory surgery center transactions can bring increased market share, case loads and physicians, but they can also bring the challenge of merging two independent accounts receivable systems.

Three industry experts who have worked with many such mergers in the past offer their advice to centers on how to combine coding and billing operations as smoothly as possible.

Ann Geier is the vice president of clinical informatics with the Surgery Division of SourceMedical Solutions; David Harris is a principal in PwC Health Industries; and Jim LaRosa is the healthcare information technology director for Eliassen Group.

Q: What does the merging of ASC billing operations typically look like?

Ann Geier: There are a few typical scenarios. The best case scenario is that the purchaser purchases the center's A/R and that both original systems are on the same software. On the day of the sale, the billing system transitions from one owner to another.

The next scenario is when the purchaser buys the center; they do not buy the A/R, but both centers are running on the same billing system. When working the A/R, the billing office has to be very conscious of who's getting the money. Any reimbursements for cases before the sale will go to who ever did the case. Even when merging centers with the same system, the billing office will have to have a separate account for prior transactions.

The third scenario is much messier. It occurs when two different computer systems are being used. Transitioning can be traumatic for everyone. Until the sale occurs, the other software system needs to remain active while new employees need to be simultaneously training on the new system. Tech support becomes critical with transitioning accounts.

Q: When the buyer comes in to the newly-acquired ASC, how can they best prepare the center employees for the transition and the possible challenges?

Jim LaRosa: That depends on the size and scope of the newly-acquired ASC. The most important capital the buyer is acquiring as a result of the transaction is the institutional knowledge and capabilities of the employees who have been with the organization. It's important for those staffers to be involved with changes that may transpire as a result of the acquisition. They should be nurtured and mined for their experience, so the transition will be a smooth one.

David Harris: Management needs a well thought out communication plan that will address all of the employees' concerns. We strongly recommend the two organizations seek outside help in putting together the merged entity.

Q: If existing accounts must be kept separately, what's the best way to make sure the money goes to the proper place?

JL: All disbursements must be properly identified and clearly documented.

DH: It depends how you set up the acquisition. The first step is to determine which Tax ID the combined entity is going to bill under. Once this occurs, you can then move to the next decision point such as: NPI, credentialing, managed care contracting, lockbox setup, cash applications, etc.
 
Q: How do you approach personnel redundancies?

AG: In the billing office, you are rarely able to keep the previous billing people, but it depends on the purchase. Depending on the purchase agreement, everyone stays or they may all have to reapply for their jobs. Often the new company will look at A/R days and efficiency because they don't know the people yet. You normally keep everyone initially, but it can be traumatic either way. Sometimes the previous employees can't adjust to the new management.

JL: Redundancies must be addressed very carefully. With the impact of the new ICD-10 guidelines, as well as an increase in complexity and volume, "redundant" staffing may be just what is necessary in order to complete all of the work. However, such a determination can only be made after the typical amount of work has been dealt with following the transaction. In my view it is best to maintain those staffers who excel in their positions.

DH: There are "front" and "back" office activities that can take place in a shared service or central business office environment. You first have to examine what patient accounting functions are being performed in the practice and by whom. You can begin to migrate some front office activities away from practice such as scheduling and financial pre-clearance without having common clinical information systems (including financial), but the shared service organization you are migrating them to should be in a mature state.

Q: Will coding be impacted by a merger?

AG: Many ASCs outsource their coding, so in that case it wouldn't change much. A buyer would want to look at what sort of support the center got through their old system. Were CPTs loaded correctly? If a center is doing coding in-house, hopefully all the coders are certified with enough experience to be doing it correctly. If whoever buys the system decides to outsource any aspect of coding and billing, they just have to make sure the billing company can access their system. It's beneficial to outsource, but realize there's a cost involved.
 
Q: What's the most challenging part of combining separate revenue cycle operations?

AG: What is really hard is that most people don't like change. When you take a system an office has worked with for 10 years and tell the office workers to keep A/R days low while also transitioning to a new system many questions arise. When do you find work time to keep A/R days low and train them on the new system? Training one weekend day isn't going to cut it. Do you cut off the new system? You only have so much hardware. When you flip the switch, what if the migration didn't go well? The billing process stays the same but the software can create havoc.

JL: In both cases increased volume can breed mistakes. Ongoing training is a key element in the reduction of claim rejection.
                                                     
DH: In a common system environment, the most difficult task is creating a standard way of doing things. Some providers refer to this as model office. We recommend that a study be performed on both entities to identify best practices at each of the providers and come together on a future state model that works for everyone. If systems are different, the two organizations must agree on a future state clinical and financial information system before they can ahead.

Q: How can the transition be made without slowing down claims submissions or increasing A/R days?

JL: The way to avoid this issue is to have an increase in well-trained staff because there is going to be more work.

DH: The best way to deal with this situation is to outsource the legacy A/R and have the shared service organization or central business office focus on current A/R.
 
Q: What general best practice tips do you have for transitioning ASCs?

JL: A robust analysis of the workflow must be conducted quickly so you can chart the future course of the operation. And there also has to be a clear understanding of the type of documentation that is going to be used going forward. That decision has to be made quickly, followed by the establishment of a training module that will put everyone on the same administrative path.

DH: Work closely with the physicians because they are very important to the success or failure of the new combined entity.

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