6 valuable ASC financial reports you're likely not running
They can provide insight into whether the facility is financially successful and how successful, reveal areas of strength and weakness, serve as the basis for making changes and much more. The easier it is for an ASC to run reports — and have the ability to run a wide variety of detailed reports — the more likely it is that an ASC's leadership will have the information it needs to make educated decisions that will bring about short- and long-term improvements to the facility.
While many ASCs rely on a standard set of financial reports on which to base decisions (e.g., accounts receivable aging, revenue by surgeon, revenue by specialty, case volume by surgery), it is important to regularly consider whether there are other reports worth running that may provide additional insight into an ASC's operations not effectively captured — if captured at all — in the standard set.
Here are six valuable financial reports to consider running if your business administrative software offers such capabilities.
1. Charge entry life cycle. This report will show how long it took from the date of a procedure to get the charge posted; how long from when the charge was posted to when the claim went out the door; how long from when the claim went out the door to when the first payment was received; and then how many days until there's a zero balance. Depending upon your software, you may be able to sort this information a number of ways, including by insurance carrier and physician.
This report allows you to spot anomalies within your normal workflow. For example, let's say your physicians generally submit their operative reports to you in a timely manner and the charge gets out the door within two days of the procedure ... except for one physician. This report may show that it's taking — on average — five days after the procedure until you can post the charges for all of this outlier physician's claims. Such a delay affects your cash flow.
With this report in hand, you can work with that physician to determine why all of the other physicians' charges are completed in two days when this physician takes five days.
As another example, if your ASC has different billers, this report can reveal whether one biller is slower than others. If one biller gets all of the information posted within two days, and another biller is taking an average of five days, you will want to find out why it's taking so much longer for this slower biller because this, again, affects cash flow.
Note: Since a lot of aging takes place from the time when the charge is posted to when you receive collections, this report may even allow you to start tracking before the charge is posted to identify holdups and delays.
2. More sophisticated case costing. ASCs should perform some form of case costing. These reports can take on even greater value when you can perform more sophisticated case costing, such as by sorting the data by procedure and then by physician, or by physician and then by procedure.
Case costing aside, it's important to know if your ASC is performing profitably — and profitably enough to survive and thrive. This is where running more sophisticated versions of case costing reports can help greatly. For example, let's say your ASC performs orthopedics cases and you're allowed to bill for implants. Any procedure that requires an implant should cost about the same and should have pretty close to the same billed amount.
Now let's assume there's a procedure that should be billed at around $9,500. If you run a case costing report and see a number of these procedures showing a billed amount around $9,500 but then you have one that's coming up as $6,000, this may indicate that a biller forgot to bill for an implant. If you catch this discrepancy early enough, you may still be in a position to bill for that implant and avoid leaving money on the table.
Note: When you can run more sophisticated summary reports that represent the activities of common functions, you will be in a better position to spot anomalies not only from the billing standpoint but also from the case costing standpoint.
3. Contractual estimate of revenue. Think of this report as a snapshot of how much money you expect to bring in over a period of time. The report shows which procedures you have scheduled and the expected reimbursement of those procedures based on your insurance contracts. If you run this report for a given month, it will give you your projected billing and collections for the procedures scheduled during that month.
This report is particularly helpful for budgeting purposes. If a month's scheduled procedures are projected to bring in less than your target figure, you can quickly get to work to try to determine the cause and hopefully rectify the problem going forward. If a month's scheduled procedures exceeds what you budgeted, you can identify where your numbers received a boost and work to duplicate that success.
4. Case eligibility collections. Patients are taking on greater financial responsibility for the healthcare services they receive through rising copays, deductibles and coinsurance. This report allows ASCs to notify patients of their out-of-pocket portion of the fee ahead of time. When ASCs gain the ability to provide this information to patients, surgery centers are more likely to collect that amount owed as patients can make arrangements for how they will cover their cost.
The report summarizes the entire payment requirement, whether insurance has been verified, whether the patient has been alerted to their out-of-pocket expense and whether the patient portion has been collected. So when patients walk in the door, the ASC can point out that the patient was alerted to the amount that was owed and ask for payment.
5. Supply expenses for the month. Financial anomalies are rarely positive, so when you can spot them early, you're more likely to reduce the long-term negative impact. This report will help you spot anomalies in your supply expenses.
If your expenses per case are fairly consistent but then you have a month where your supply costs go through the roof, this report will help you identify that trend and provide insight into what's gone awry so you can fix the problem before more damage is done.
6. Executive summary. It's not unusual for owners and members of an ASC's leadership team to want to know about the health of the business in a given month, and to ask about it in between board meetings. The executive summary report is designed to meet this need.
At the click of a button, the executive summary provides a helpful snapshot of the financial health, volume and effective utilization of the ASC — all on one page. This information is not only easier to digest but is generated much faster than running a series of reports.
Key elements in the summary may include how much OR time is filled for the month (i.e., whether the ASC is running at capacity), supplies used (which can help track turns of inventory) and how many cases were cancelled.
It can also display cases by physician. This is particularly helpful as it can allow you to identify whether physicians are bringing in the amount of business you're used to (and have planned for) them bringing in. If there's an overall increase in cases, this can be positive, but only if the cases are profitable and aren't coming in and taking the place of more profitable cases. If there's no change in volume but the case mix is changing, this information can help you ensure the case mix is changing in a manner that helps the bottom line.
Marion McCall, BBA, RN, CNOR, CPHIMS, is vice president of clinical solutions for AmkaiSolutions (www.amkai.com) and Surgical Information Systems (www.sisfirst.com). With more than 35 years of nursing experience and the majority of those in the perioperative arena, Marion is recognized nationally for her knowledge and expertise in the perioperative field with a focus on nursing informatics and health care information technology. She currently serves as a member of the AORN PNDS taskforce and is the chairperson for the AORN Perioperative Nursing Informatics Specialty Assembly group. In the changing arena of electronic health records she serves as a clinical mentor to those implementing and struggling with the move to perioperative electronic health records.
© Copyright ASC COMMUNICATIONS 2016. 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.