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5 Questions Surgery Centers Overlook When Outsourcing ASC Services

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Ambulatory surgery centers may turn to outsourcing as a cost-cutting strategy, but experts caution that it is important to ask the right questions of potential vendors to avoid incurring unexpected fees and costs down the line.

Many types of services performed within the ASC — transcription, anesthesia, coding and billing, human resources and information technology, for example — can be outsourced, allowing employees to allocate time to other operational issues. Here are five questions to ask when navigating and contracting with the various types of outside sources available.

1. Is the vendor HIPAA-compliant? "No matter what or who the outsourced service, they better have received HIPAA training in the last year," says John Brewer, a meaningful use consultant and the founder of HIPAAaudit.com. The HIPAA Associate's Agreement, which, among other things, establishes appropriate safeguards to prevent the illegal use of Protected Health Information, is also rarely completed by vendors, Mr. Brewer says.

ASCs should ensure that vendors have a policy in place for storing and protecting Electronic Protected Health Information — patient information that is stored, accessed, transmitted or received electronically. "If that outsourcer will get close to touching any ePHI, there had better be a clear statement in the Associate's Agreement as to how they are expected to store any ePHI," Mr. Brewer says.

"The perfect example of not doing this is the Science Applications International Corp./Tricare breach," he says, referring to a data breach that occurred when computer backup tapes were stolen from an SAIC employee's vehicle, according to a lawsuit filed in 2011. Information on the tapes included Tricare members' medical history and personal information. The suit sought damages of $4.9 billion for one plaintiff, but was later expanded to include 13 more plaintiffs across the nation. "SAIC was a contractor with ePHI on their laptop that was not encrypted, and then stolen," Mr. Brewer says.

2. Does the vendor have strong data backup policies? ASCs should ensure that a prospective vendor has appropriate policies in place to provide continuous access to data and patient records, including a policy to address what would happen in the event of an internet outage, says Tim Lynch, a computer specialist with Psychsoftpc. A backup plan for sensitive records and data in the event that the vendor goes out of business should also be established. "This should be written into the contract with some sort of guarantee," he says. "There should be a form of deliverable — preferably hard drives with the data to the care provider or backup to another online site."

3. Are you comparing costs between vendors accurately? ASCS should choose three to five companies to evaluate in detail for a particular outsourcing service, says Randy Hagen, VP of Clients Services for Points Group. The final choice will likely come down to a cost-benefit analysis, but centers should ensure that they are comparing costs correctly. "For transcription, a company may charge you per line whereas another may charge you per word," he says. "It's very important that you know the difference and can translate that — you may think you're getting a bargain because you're seeing a dollar amount that's less, while in actuality you're paying more."

4. Is the outsourced anesthesia group in-network? Centers should also carefully evaluate outsourced anesthesia contracts to ensure that the anesthesiologists in the group are contracted with the correct payors. "If your anesthesia group is out-of-network, it can cause a big problem with cases coming to your center," says Mr. Hagen. "You have to make sure that the anesthesia group is contracted with the same payors that you are. If they're not contracted, you need to make sure that there is a section in your agreement stating that they will negotiate with your payors." ASCs can also ask anesthesia groups to contract with their payors as a condition upon renewal of the present contract between the anesthesia group and ASC.

If the anesthesiologists are not in-network, patients will be less likely to come to the center — particularly in the case of workers' compensation procedures where municipalities are scrutinizing every dollar that is spent, says Mr. Hagen.

5. Is the vendor excluded by the Office of the Inspector General? "If the ASC wants to outsource any of its services, it should ensure that none of the vendor's services are performed directly or indirectly by an excluded individual or entity," says Lee Lasris, a health attorney with the Florida Health Law Center in Davie, Fla.

The Health and Human Services Office of the Inspector General can exclude individuals from participating in all federal health care benefit programs — including Medicare and Medicaid — if they have engaged in fraud or abuse or have been convicted of healthcare related crimes. If an ASC selects a vendor that involves an excluded individual or entity, the ASC may be prohibited from submitting a claim for reimbursement for any of its services to a federal health care program. "For all intents and purposes, hiring an excluded person would put the ASC out of the Medicare business," says Mr. Lasris.

"Failure to take precautions may subject the ASC to huge fines," he adds. "Also, any claims submitted by an ASC that has contracted with an excluded individual or entity will be considered false claims, and any funds received will be considered overpayments that must be repaid."

To determine if a vendor has been excluded from participation in a federal health care program, refer to the OIG's searchable online list, says Mr. Lasris. It's important to regularly monitor the status of employees and contractors to ensure there has been no change in the exclusion status, he adds.

Related Articles on ASC Turnarounds:

8 Ideas to Improve Profits at a Financially Troubled Surgery Center
5 Steps for Surgery Centers to Negotiate Top Payor Rates
20 Findings on Physician Engagement

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