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10 Ways to Get Paid Appropriately From Commercial Payors in an ASC

Negotiating a profitable payor contract is half the battle to receiving maximum reimbursement; the other half involves perfecting the revenue cycle at your facility. Andrea Woodell of Regent Surgical Health discusses 10 tips for surgery centers to make sure they receive appropriate reimbursement from commercial payors.

1. Ask for implants to be paid as percent of billed charges. Ms. Woodell says surgery centers should ask their payors to pay implants as a percent of billed charges, so that the payment equates to a "cost plus." This way, the payor will not request a paper invoice and slow down the payment process for the ASC.

2. State "the obvious" in writing when it comes to multiples and implants. According to Ms. Woodell, it's usually a good idea to "state the obvious" in payor contracts, in case the payor is planning on cutting reimbursement in a way the ASC does not anticipate. For example, multiples and implants should be paid in addition to facility fees, with physician professional fees excluded. She says if the contract doesn't clearly state that multiples and implants are paid in addition, the payor could say that multiples or implants don't apply to a carve-outs.

3. Include contract language capping take backs on overpayments. If a surgery center accidentally receives overpayments from a payor over a period of time, the payor could subsequently collect the overpayments, causing significant financial damage to the ASC. Ms. Woodell recommends including contract language that specifies how far back the payor can go to collect overpayments.

"I might add language saying you can only go back six months and make that reciprocal — so the surgery center cannot collect on underpayments after six months either," she says. She says this can be helpful if the surgery center changes hands or the partnership structure shifts. This way, new physicians or owners will not be stuck paying for problems that plagued the ASC in the past.

4. Spell out in the contract which items are necessary for a clean claim. Payors may try to delay surgery center payment by requesting additional items necessary for processing, Ms. Woodell says. She recommends spelling out explicitly in the contract which items are required by the payor. "Ask for a definition of a clean claim," she says. "It should be the same for all your cases." She says this will not apply if the payor challenges the medical necessity for a procedure, but otherwise, you should not encounter as many random denials.

5. When you negotiate a new contract, push a sample claim through the system. When you start a new contract with a payor, give the payor a sample claim to make sure everything can be adjudicated without problems. "It's a nice proactive step," Ms. Woodell says.

6. Clearly define the terms used in the fee schedule. Ms. Woodell says it's important to define terms used in the fee schedule so that you are paid the amount you expect. For example, when it comes to carve-outs, the payor may reference a 'case rate,' 'global rate,' or 'per CPT rate.' A CPT rate would mean that you receive a certain amount of money — say, $2,000 — for a certain CPT code. A case rate could mean that the surgery center will not receive anything except that rate for the particular carve-out, meaning you are not reimbursed for implants or multiples. "The purpose of a carve-out is to pay you higher than the enhanced groupers of the CMS methodology you're using," she says. "If you have a case rate, you may actually end up getting less." She says a 'global rate' implies that the rate is inclusive of some type of professional fee.

7. Understand the payor's ability to adjudicate carve-outs. Ms. Woodell says some payors have an easier time adjudicating carve-outs than others. "I've worked with payors that have to go through an incredibly arduous process to get carve-outs added to the claims system so they can be adjudicated electronically," she says. "It can take six months to get added." She says in this case, it's important to plan and start early. Work with a payor as soon as you know that you'll need a carve-out for a particular procedure.

8. Specify the Medicare year if the contract pays a percent of Medicare. If your payor contract pays a percent of Medicare, the contract should specify which Medicare year the payment is based on. "If you don't know which one it is, it could be current year CMS or 2007 CMS," Ms. Woodell says.

She says there are advantages to using current CMS rates and advantages to using old ones: For example, a pain management, GI or ophthalmology center would fare better with old CMS rates because reimbursement has dropped significantly in recent years. Orthopedic and spine-driven ASCs will want payments to be based on current CMS rates.

9. Specify how the contract pays for multiples in device-intensive cases. The contract should specify how the payor pays for multiples — and specifically have a disclaimer for device-intensive cases, Ms. Woodell says. If devices are paid 100-50-50, the surgery center can lose a significant amount of money, she says.

"If you start thinking about trial simulators, where electrodes cost $1,500 each, those should be paid $1,500-$1,500-$1,500, not $1,500-$750-$750," she says. "Device-intensive cases as defined by Medicare may require a little pushback from the ASC."

10. Understand what will happen if a payor reprices through a TPA. When a payor re-prices through a third-party administrator or local regional payor, you may not have a contract with the new organization. "You need to educate your business office manager that just because [your payor] accesses this network, doesn't make it okay if you don't have a contract with that network," Ms. Woodell says.

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