Q: In your experience, what have been some of the challenges or barriers ASCs have to a smooth collections process in their centers?
Becky Zigler-Otis: First, centers are not adequately staffed — this could be due to not recognizing the need to staff properly or it could be lack of an adequate pool of candidates. Second, the billing staff is not focused on billing and diverted with other activities. Third, the center has inconsistent procedures and policies or a lack of policies exists related to collections. Finally, the billing staff is not adequately educated or trained in areas such as on modifier usage, contract interpretation, etc.
Q: What can be the financial impact of an inadequate billing and collections process?
BZO: [Some of the impacts include] days in A/R climbing continually; continual increase in A/R greater than 121 days; and reduced revenue stream affected purchasing and sustainability. Unfortunately, you can have a very sound clinical environment and provide superb care; however, if you have an inadequate billing and collection process, you will not be able to survive as an organization.
Q: How has your center worked to optimize its collection processes?
BZO: We developed policies to consistently handle self pay patients, financial hardship cases as well as outstanding patient balance payment plans. The next steps were to ensure enforcement of established payment plans, collection of co-pays at the time of arrival and development of reminder systems for registration staff to ask to collect. We also make sure to run insurance verification one week prior to surgery, and if there is a self pay or a large deductible plan, we contact the patient to set up a payment plan prior to their arrival. We also provide patient quotes upon request and work on payment plans — again prior to arrival.
There is also a comparison [we do] to what we are paid versus what our contract states. It seems weekly we have an issue or two arise related to payment, and usually, we are underpaid. Paying attention to how you are paid avoids giving up deserved revenue.
Q: What have been the results of these initiatives for your center?
BZO: Data results are in our days in A/R. In April 2010, it was at 39 days; in March 2010 it was at 36.4 days; and prior to that ranging from 40-45 days consistently. We have also focused on reducing our A/R which is greater than 121 days — slowly reducing from our high of 14 percent in Sept. 2009 to April 2010 being at 4.1 percent. The reduction in A/R days more than 121 days was the result of a focused effort on payment plans prior to the date of surgery, collection of co-pays and the provision of patient quotes.
Q: I know your ASC has chosen to outsource some of its revenue cycle functions. How did you decide to outsource some of these business office functions and how has that helped your center?
BZO: The decision to outsource was based on many factors. We have a limited pool of qualified billing staff in our community. Also, if you have in-house staff, you need to make sure you have replacement coverage during vacation time or unexpected time off to keep the collection process smooth. We also have limited space for non-clinical staff and most likely would have had to lease space. Also, [having more people in the center] means the need for more resources, computers, reference books, continuing education, etc.
We also chose to outsource because our days in A/R were continuing to rise, and we did not have the expertise to address this adequately at that time. We wanted to locate a vendor that had experience in surgical center billing so we could rely upon their expertise to help us get back on track and stay on track. This has helped our center with reducing the days in A/R, and thus led to better cash flow. It has also helped because they can provide assistance with best practice procedures and processes as well as remain current on the changing regulatory environment related to coding and billing. We have a comfort level in being compliant with regulations through the use of the outsourcing vendor.
Q: Do you have any other advice for ASCs struggling to improve their collections process?
BZO: If you start to see a steady rise in the A/R, take action — don’t wait until it escalates out of control. Once the days start rising, it takes months to bring the days in A/R back down. It is important because this is the revenue for your facility. Without the revenue coming in, you will be limited with capital investments and just managing day to day operations.
Look closely at what you are currently doing — why is the collections process struggling? If you lack the needed staff, the expertise of staff and availability of candidates within your area, outsourcing may be an option. If you decide to outsource, find a vendor that is aligned with your practices and has a solid reputation. Do reference checks and then make the move before it is too late for your center.
Learn more about the Ambulatory Surgical Center at Stevens Point.
