Fluctuating economy
There are several economic factors currently weighing heavy on the financials of ASCs. They include:
▪ Credit changes. In this current state of tightening credit and regulations, lending institutions may be less likely to extend credit. New centers may face unwillingness by these institutions to fund (as great of a percentage of the cost) land acquisition, construction and other opening expenses as in previous years. Mature centers may have more difficulty establishing lines of credit for improvements or equipment purchases.
▪ Caseload changes. Some physicians’ practices are already noticing a decline in patients electing to have surgery. This trend will certainly result in a decreased caseload for the ASC. As the economy continues to vacillate, ASCs will have to address these challenges with greater cost-effectiveness in staffing, supplies, scheduling, etc.
In these times of “financial belt tightening”, timely and accurate collection of monies owed will become even more critical.
2009 CMS proposed changes
In 2007, ASCs faced proposed changes in CMS reimbursement with hope. CMS had promised a more fair and equitable payment system between hospital outpatient departments (HOPD) and ASCs. The 2008 final rule was approved with ASCs reimbursed an average of 62 percent of what HOPDs receive. However, as CMS enters into the second year of the four-year transition period into the new ASC payment system, overall comparisons indicate that the 2009 rates (when ASC reimbursement is split between 50 percent of reimbursement of the old payment system and 50 percent reimbursement of the new payment system) have decreased to a lesser overall percentage of HOPD reimbursement.
These reimbursement changes will necessitate that centers reassess not only minimally profitable procedures but also specialties that continue to decrease in reimbursement. Optimal coding, while remaining compliant, will become paramount in maintaining a positive cash flow.
Managed care trends
The trend of large health insurers acquiring smaller competitors is expected to continue, leaving the industry to deal with larger payors who are adopting a “take it or leave it” attitude in negotiations. Arriving at an agreement is now more difficult and takes longer to accomplish (consider allowing 3–6 months for completion).
As we continue to monitor the managed care industry, we have noticed disturbing trends surfacing in contract negotiations such as refusing to reimburse for implants or multiple procedures. Payors are also continuing to limit out-of-network services by implementing more restrictive guidelines for providers.
Because of the increasing strength and clever tactics of managed care organizations, delays in payment, denials and incorrect allowances are prevalent. It is imperative that payment-posters remain well educated and alert for any changes and possible payment trends as they occur.
Brief history of outsourcing
The common thread in each of these challenges is the increased need for cohesive and up-to-date billing efforts. For coding, billing, payment posting and collections, each team member involved in these processes must remain aware of newly released information from CMS and managed care. Changes in coding and billing requirements are modified frequently, so continuing education is critical.
Historically, these processes were handled in-house, just like transcription. Over the years, because of the shortage of good transcriptionists, it has become commonplace for facilities to seek outside assistance in the form of outsourcing transcription, whether to a private transcriptionist or a company.
Similarly, because of the limited amount of certified coders and high-quality billing personnel, ASCs began to seek dependable outside sources to perform these tasks. This trend has grown in popularity as computer technology capabilities have improved to meet and exceed privacy criteria established by HIPAA.
Determine if outsourcing is a good fit
If you have a talented and aggressive coding and billing team in your office, count your blessings. By providing ongoing education and resources, these critical staff members will become some of your best investments as they help your facility receive the reimbursement it deserves.
However, if you are struggling in any of the areas related to your billing and collections process, outsourcing might be an option worth exploring. Here are some questions to ask yourself to help you determine whether outsourcing can be a beneficial investment for your center.
- How much of your ASC’s square footage is allocated for a billing staff of two to three people?
- Could you use this space clinically to generate revenue?
- How much are you investing in your billing staff’s salaries and benefits?
- How do you handle staff turnover and absenteeism? Do you have staff members who cover the billing staff when they are absent? If so, you may want to factor in these staff members’ salaries and benefits.
- Is your coding optimized but compliant (i.e. not unbundled)?
- How many days do you average between date of surgery and the claim dropping? Every day of delay is money not in the bank.
- What are your days in A/R? Each day’s delay in receiving your reimbursement makes that payment worth even less as every additional dollar earned by an increase in collections can produce additional interest revenue.
How can the answers to these questions help you determine whether consider outsourcing? The following is a “billing health questionnaire” you can fill out which will help you to gauge the current health of your billing processes.
All of your answers should fall under the benchmarks in column one, but don’t be too upset if you had more column two and column three answers than you anticipated. With managed care’s increasing trends in denials and payment errors and the continuous changes in Medicare reimbursement and allowable procedures, it takes many man-hours to properly track these changes and respond to them. This is in addition to the time necessary for coding, billing, payment posting and collections.
The questionnaire is meant to direct your attention to important aspects of your billing process and assist you in evaluating your billing needs. Depending on your responses to the questions above, you may want to consider outsourcing.
Possible benefits of outsourcing
Here are just some of the benefits you can realize by outsourcing some or all of your billing processes.
- Outsourcing can provide you with access to a full team of reimbursement specialists, including certified coders, experts in managed care and Medicare reimbursement, as well as experienced insurance and patient collectors. It is sometimes difficult for centers to find experienced personnel to provide the necessary services to keep coding and billing compliant, coding optimized and collections current.
- Outsourcing can alleviate disturbances in your business office caused by vacations, illness, staff turnover and training of new personnel. Knowing that you’re never without your billing team is an often-overlooked benefit.
- Outsourcing decreases the amount of time spent in-house on the business aspects of patient care and allows facility staff members to focus additional attention on clinical patient care.
- Optimized coding by a knowledgeable certified coder can often increase revenue, off-setting the fee for outsourcing all of your billing tasks.
- Outsourcing can free up your staff members as they may not have to answer billing questions if all patient calls are directed to the outsourced billing office.
- With payors denying claims at an ever-increasing rate, outsourcing can allow for uninterrupted time necessary for collectors to immediately respond and reconcile appeal issues. This will allow your cash flow to remain stable.
- Outsourcing coding and billing creates additional available square footage for clinical use because of less in-house staff and less on-site storage.
- As ASC billing increases in complexity, and to ensure that your center remains compliant, it is necessary that billing staff members monitor rules and regulations in addition to inputting the coding data on to the claim form. Outsourcing alleviates the need for these time-consuming processes and give you piece of mind that a team is closely watching for these rules and regulations every day.
- Outsourcing companies can often lower the days your money remains in A/R, catch incorrect payments and correct them promptly, optimize coding and perform immediate and thorough appeals. This, along with timely and effective collection follow-up, can convert your billing department to a profit center as opposed to a cost center.
— Ms. Serbin is president and founder of Surgery Center Billing, specializing in coding, billing, and collections for ASCs, and Surgery Consultants of America, specializing in ASC development and management services. Contact Ms. Serbin at cas@surgecon.com. Learn more about Surgery Center Billing. Learn more about Surgery Consultants of America.
