Change is never-ending for ambulatory surgery centers (ACSs). ASCs need to always stay on top of the seemingly nonstop influx of contractual and coding changes, which can have a direct impact on cash flow.
Here are just some of the recent changes facing ASCs:
Payer contract updates
Payer contracts at ASCs are constantly changing. Imagine the following scenario: An ASC has 15 different payer contracts, and within each of these contracts there are four different plans, adding up to 60 contract iterations to track. Further complicating the matter is the variance in all the rules and stipulations related to care plans, local coverage determinations (LCDs), preventive care, bundled payments, and narrow networks.
Current Procedural Terminology (CPT) codes
Keeping up with contracts is just part of the challenge. ASCs also need to keep track of myriad coding changes. For example, the American Medical Association changes, adds, and deletes CPT codes every January. In fact, in 2018, the AMA added 170 new codes, revised60 codes, and deleted 82 codes. Unfortunately, by the time ASC coders discover these changes, there are already another new set of changes to implement.
Individual payer timelines
Each January, Medicare starts using new codes. Not all payers, however, are in sync with this timeline. For example, one Georgia-based workers’ compensation plan updates its fee schedule with the new codes every April. As a result, ASCs with this payer need to use the old codes for the first three months of the year, which can cause significant delays in payment.
International Statistical Classification of Diseases and Related Health Problems-10 (ICD-10)
In addition to CPT codes, ASCs use ICD-10 codes to help explain patient conditions or reasons for patient visits. These codes, which are published by the World Health Organization, are updated each October. This past October, the World Health Organization updated over450 ICD-10 codes.
Specialty association coding changes
Specialty professional associations often help ASCs identify codes that are relevant to their practices. For example, the American Orthopedic Society highlights the codes that are relevant to orthopedic care. Typically, these professional associations will offer their guidance in late summer in advance of the actual publication of the code changes in late fall.
Local Coverage Determinations (LCDs)
Medicare Administrative Contractors publish their own LCDs, which are used to determine service coverage. These LCDs change anywhere from every few weeks to every few years. The challenge for ASCs is keeping on top of these changes without knowing when to look out for them.
Strategies that can help ASCs stay on top of change
To keep up with all these changes, ASCs should consider implementing the following strategies:
Store contracts in an easily accessible place. Without being able to access contracts, ASCs cannot know if they are delivering and documenting care in the manner that is required by the payer. As a result, they will not know if they are doing what it takes to get paid. Unfortunately, most ASCs seemingly do not keep their payer contracts on file. As a result, if they perform a surgery— say a spine case — for a payer, the ASC most likely will not know what is required to meet the payment specifications.
Review contracts periodically. Payer contracts should be reviewed at least every other month since every payer has different policies and procedures. As such, ASCs need to make a concerted effort to track the requirements of each payer to get paid. By doing so, ASCs can ensure that they are catching important changes that might otherwise pass them by, resulting in a negative impact on the bottomline.
Don’t just know contract terms; analyze them. It’s important to analyze contract terms to make sure ASCs are being paid fairly. If the payments are not fair, ASCs should then work with the payer to negotiate a higher rate. Taking the time to analyze and negotiate rates is important, as changing just one or two rates could result in a $1 million difference annually.
Keep systems updated. Software systems should be ready to accept new codes in a timely manner. For example, if an ASC uses Superbills, the information system needs to incorporate all the changes to ensure that these bills are created accurately. It’s important to make sure that updated LCDs are integrated into the ASC’s information system. This makes it possible for coders to pull up the LCD to ensure that the ASC is meeting the medical necessity.
Dealing with the downside of inaction
When ASCs don’t keep up with myriad contractual and coding changes, they are vulnerable to unwanted consequences, including:
Loss of revenue. Consider the following case: An ASC recently was performing a high volume of high-dollar spine fusion cases. Each of these spinal procedures potentially can result in hundreds of thousands of dollars in revenue. The problem: The ASC’s payer was taking $30,000 to $40,000 back or denying the full case amount because the ASC did not follow the contract correctly. Why? Because the contract dictated the direction of care and the ASC had failed to work with the patients to make sure that they followed preventative, pre-surgery care measures.
An unclear strategic plan. Not keeping up with changes can also keep ASCs in the dark when it comes to setting revenue expectations, which is why it is important for ASCs to review code changes and analyze how they will affect next year’s revenue. This way ASCs can be prepared for any revenue fluctuations — good or bad — that will emanate from added codes, deleted codes, and revised codes. This knowledge makes it possible for ASCs to know which procedures will result in a profit, which ones will break even, or which ones will result in a loss. After conducting this type of analysis, an ASC can bring in some higher-paying procedures to offset lower-paying ones.
Non-compliant billing. If an ASC does not stay on top of changes, a coder could unknowingly be submitting non-compliant bills. In some instances, the coder could be “upcoding,” meaning that the ASC is asking for and getting paid for more than what they are supposed to receive. If a payer audits these claims, the ASC might have to refund the money — often in greater amounts than what they received initially. On the flip side, if the coder is under-coding, the ASC will miss out on revenue that they should have been receiving.
Want to avoid these consequences? Make sure that your ASC continually keeps tracks of contractual and coding changes and puts strategies in place to deal with them.