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5 Steps on the Road to Higher Profits in ASCs

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Here are five tips to improve profits this year.

1. Translate your vision into a hard operational structure.
Use budgeting to translate your vision into a hard operational structure. "You have to have a good capital structure to be financially solvent," says Principal and Chief Financial Officer at The C/N Group Raj Chopra. "Strategy development is about taking chances, but also saying 'No.' Spine might work in some markets, but not all markets. Strategy is about where you are going in the future."

Administrators and board members must think about the budget 360 degrees three-dimensionally. This means knowing where you are going and how to get there. Consider physician succession plans, budgets and ownership going forward. "The budget is a function of the report, not an end to itself," says Mr. Chopra. "Adapt your budget, revisit it on a quarterly basis. Talk to nurses, vendors and others to see where the savings and potential rising numbers are for the future."

2. Drive more patients through cross-pollinating provider networks.
There are some pretty strong loyalties between surgeons, and all physicians within a certain specialty could be a referral source. For example, if a patient shows up at an orthopedic surgeon's office with leg pain but their problem stems from spine issues, the orthopedic surgeon can refer these patients to local spine or neurosurgeons in their area.

"Once the referral occurs, physicians have a relationship with each other," says Marcus Williamson, president of the spine division of Symbion Health Care. "We are learning that networking is what the future of healthcare is all about. Independent physician groups are identifying specialists to help them contend for larger managed care contracts and cost controls."

After the initial relationship is formed from one referral, the physicians begin to become familiar with each other and tend to stay within their networks for referring patients as much as possible. "There has to be a champion to make sure the loyalty within the network is maintained; it's a quid pro quo system," says Mr. Williamson. "Networks are the future, and practice administrators can assist their physicians with that."

3. Reward staff members when they hit efficiency goals.
A bonus program can incentivize good behavior and reward employees for meeting targets critical to a surgery center's profitability. You should create targets for each group based on meeting (or not meeting) a particular goal. For example, perhaps you want to decrease turnover times by two minutes in the OR. In this case, you would gather your clinical staff and explain the goal of reducing turnover times by two minutes. You would make it clear that the goal is set at two minutes — if the team accomplishes the goal, they will receive that portion of the bonus; if they do not meet the goal, they won't.

John Merski Jr., of MedHQ, says this philosophy differs from some other surgery centers, where staff are rewarded even if they meet a certain percentage of the goal. But in such instances the problem becomes: Where do you draw the line? Will you still reward your staff members with 50 percent of the money if they only meet 50 percent of the goal, and so on?

He says you should set a clear target and tie a specific dollar amount to that target. Make sure that the goal is realistic — Mr. Merski says your staff should be able attain goals set.  Unachievable goals have quite the opposite impact of their intended purpose. A success rate of around 80 percent is achievable yet duty-bound.

4. Be more aggressive with claims denials.
Lisa Rock, president of National Medical Billing Services also recommends the ASCs review all electronic claim rejection reports daily so that they can determine where in the pathway the claim was rejected. Reviewing reports will allow billers to determine if the cause for the rejection was in-house or with a certain clearinghouse and trading partner. For example, reviewing the report would allow a biller to see that a claim was rejected due to an error by the provider’s billing team rather than along the pathway. If errors are made along the pathway, reviewing the report will highlight where along the pathway the claim failed to move forward.

"Maybe a claim was rejected because of an ID error by your receptionist, but if you don't read the rejection report, you don’t know that it was rejected out of the first stage. It didn’t even make it out of the gate," says Ms. Rock.

If errors were indeed introduced by the provider's staff, billing managers can take steps to improve processes and reduce in-house errors. If errors appear elsewhere along the pathway, billing managers should determine why the claims were rejected at that point and call the clearing house or trading partner to investigate further, if necessary.

Ms. Rock says that the most common rejections are for invalid subscriber ID numbers; missing subscriber date of birth if different from patient; invalid diagnosis code; and demographic errors, such as misspelled names.

5. Propose participating in new payment programs.
Participating in a pay-for-performance or bundled payments program rewards surgery centers for raising quality and lowering costs by adding volume and revenue to your center. "Bundled payments can actually raise revenue when the center is able to utilize Access MediQuip's ability to buy the implants at a lower cost," says Steve Arnold, MD, chief medical officer at Access MediQuip.

There aren't many surgery centers participating in these types of programs today, and most aren't ready to participate at this point. "It's very new, but there are more surgery centers looking at it," says Dr. Arnold. "The surgery centers who should be looking at it are the ones who are most efficient or becoming more efficient. If an ASC is not aligned with their surgeons, then they should not be seeking bundled payments."

More Articles on Surgery Centers:

5 Action Steps for In-Debt Surgery Centers

4 Items to Boost ASC Strategic Planning in 2013

20 Statistics on Surgeon Compensation for Key ASC Specialties


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