When ambulatory surgery centers (ASCs) allocate the time to monitor and benchmark key performance indicators (KPIs), they gain better control over their revenue cycle performance. This helps with identifying problems that drag down revenue and profits and then implementing solutions to resolve such issues.
This first article, in what will be an ongoing series about improving ASC KPIs, focuses on two related metrics: days to bill and days to pay.
Why you should monitor these KPIs
Monitoring the average days to bill — also referred to as charge lag — every month will help ensure cases are billed promptly, which should then lead to faster, timely payments. Higher or inconsistent days to bill make it more difficult to accurately estimate revenue. Furthermore, lengthy delays can contribute to increases in denials, lost payments, and days sales outstanding.
Days to pay measures how long it takes for your ASC to receive primary insurance payments. As with days to bill, payment delays can negatively impact your bottom line. When monitoring and trending this metric, do so by payer or financial class.
The standard benchmark for days to bill is less than two days (i.e., 48 hours). As for days to pay, since they vary by payer, the benchmark will vary by your ASC's payers. A "sweet spot" to target is 45 days overall, 18 days for Medicare payments, and up to 55 days for workers' compensation payments.
Red flags to watch for
If your ASC's average days to bill exceeds 48 hours, this signifies a delay in billing that you should address before your other metrics (including days to pay) are significantly impacted.
Meanwhile, if your days to pay metric is high, this likely indicates your ASC is facing payer delays, billing issues, and/or denials. You will want to examine the KPI and its trending closely to pinpoint the cause(s) of poor performance.
There are several common reasons why ASCs may struggle with days to bill. High provider dictation days can quickly cause this metric to surge (Note: Same-day dictation is a worthwhile goal.). If providers do not respond to coding queries or fail to amend operative notes upon request, this will delay billing. Other typical problems include missing documentation (e.g., pathology report, history and physical, implant log, invoice) and billing team issues (e.g., lack of resources, poor time management, workflow inefficiencies, insufficient knowledge of rules and processes).
Days to pay has its own share of common problems. As stated, billing days can lead to payment delays. Charge entry and demographic entry errors will likely trigger rejections or denials, stalling payment and forcing an ASC to resubmit information and/or entire claims. Submitting claims on paper is slower than doing so electronically and more difficult to track. If the paper claim fails to reach the payer or is lost before processing, it may be days — even weeks — before an ASC realizes it needs to submit a new claim. That's assuming staff are tasked with following up on initial claim submission — and then do so in a timely manner.
Solutions to pursue
If your ASC is performing poorly on either of these KPIs, there are steps to consider taking that can help resolve the issues discussed above, most of which concern process, policies, and procedures.
Struggling with days to bill? Require your providers to complete their dictation on the same day of the surgery. You may even want to implement a corrective action policy for providers who do not dictate in a timely manner. Establish a process that spells out how business office staff should submit requests to providers and their expected turnaround time. Closely track requests for missing documentation required for coding/billing to generate a claim for submission. Finally, don't wait to address billing staff deficiencies. You can improve the likelihood of identifying such issues by closely monitoring team productivity and performance.
Concerning days to pay, require your insurance verification specialist(s) to review the insurance information entered in the demographic screen prior to submitting claims as a check on accurate data entry. Perform quality assurance review of charges prior to claim submission. If a payer requires you to mail a paper claim, follow up with the payer within 14 days to confirm the claim was received and is on file. Finally, follow up on all claims within 21 days of submission to ensure the claim was not only received but is in processing. Doing so can also help identify denials quicker.
Next in the KPI series…
Stay tuned for our next article is this KPI analysis series, which will focus on specialty and payer volume trending.
Angela Mattioda (email@example.com) is vice president of revenue cycle management services for Surgical Notes. Surgical Notes is a nationwide provider of revenue cycle solutions, including, transcription, coding, revenue cycle management (RCM), and document management applications for the ASC and surgical hospital markets. Mattioda oversees the SNBilling RCM service, the fastest-growing component of Surgical Notes' complete end-to-end revenue cycle solution offering.