What comprises a complete ASC revenue cycle?

The complete ASC revenue cycle process encompasses many complex functions. Each is essential to securing payment for a surgery center. But due to their significant interdependence, a strong performance in one, most, or nearly all of these functions is not enough to ensure financial wellbeing. Rather, every function must thrive individually and collectively. When these processes all function well together, not only will ASCs improve collections, but the overall revenue cycle management process will accelerate.


Failing to give all of these functions the attention and support they deserve can easily lead to mistakes. Small errors may cause delays in payments while bigger mistakes typically result in an ASC losing money (potentially a lot of it) and possibly facing compliance challenges. If mistakes are made early in the revenue cycle process and not identified quickly, there will be ripple effects negatively affecting the functions that follow.

Let's break down the functions that comprise the complete ASC revenue cycle, review how they feed into one another, explore some obstacles that threaten to disrupt revenue cycle processes, and examine what ASCs need to do — whether they perform internal revenue cycle management or outsource — to achieve success.

1. Dictation. The first step in the revenue cycle process is dictation of the operative note by a surgeon following completion of a procedure. Traditionally, surgeons would dictate into a tape recorder. Technology now allows surgeons to record their operative note in a number of ways, including via smartphone app, web browser, and phone line.

When dictation is delayed, the revenue cycle functions that follow are as well. A failure to dictate in the level of detail required will provide revenue cycle staff with incomplete information that can lead to mistakes and omissions.

A worthwhile goal is same-day dictation. Advances in technology provide surgeons with greater flexibility and speed to complete their dictation, either between cases or at day's end.

2. Transcription. Upon completion of operative note dictation, transcription of the dictation occurs. This is where the newer dictation technology as well as advanced transcription technology and services help improve the speed of completion and accuracy of an operative note, which is critical to sending out a clean claim faster.

Traditionally, after completing dictation into a tape recorder, the tape would be provided to a member of the ASC's business office tasked with transcription. On busy days, turnaround time would often slow down as dictations built up in the queue. Upon completion of transcription, the transcriptionist would bring the operative note to the surgeon for review to address questions and fix errors. After completing the review, any changes would need to be entered and then re-reviewed by the surgeon before approval of the operative note.

Technology can now streamline the dictation and transcription process. For example, platforms are available that can automate much of an ASC's day-to-day transcription operations, permitting users to dictate, receive, review, edit, digitally sign, and archive operative reports, either individually or in batches. Furthermore, the reports are accessible from multiple endpoints, including smartphone app and web browser.

The most significant challenge with completing the transcription process properly usually ties back into dictation. Since transcription captures only the words stated by the performing surgeon, the importance of an accurate, complete dictation is magnified. If the dictating surgeon omits key details, the transcription will as well. Fortunately, technology can help surgeons more efficiently and effectively review and, if necessary, correct their operative note before it is moved onto the next stage of the revenue cycle process.

3. Coding. Using the surgeon-approved operative note, coders get to work. Their job is to accurately assign CPT procedure codes, ICD-10 diagnosis codes, and modifiers, if necessary, to the procedure(s), which will be used by the payer to determine reimbursement for the procedure(s).

The importance of compliant coding cannot be understated. When correct coding information is submitted to a payer, this increases the likelihood that an ASC is paid correctly and in a timely manner. Coding is a complicated process, with rules that undergo frequent changes. Only experienced, certified ASC coders who keep abreast of rules changes should be counted on to complete the process or the ramifications may be significant.

Incorrect coding can lead to a host of problems. If a payer detects the mistake, it will likely issue a denial, forcing an ASC to allocate time and resources to correcting the information.

If "undercoding" occurs, which is when a code does not adequately reflect the full procedure performed by the surgeon, and is not identified, potential revenue is left on the table as the ASC will receive lower reimbursement than it rightfully deserves.

On the other hand, "upcoding" is the reporting of a higher code(s) than what occurred during the procedure. If undetected, this can lead to higher, "unearned" reimbursement. When this occurs, ASCs will be expected to refund the overpayment, at a minimum. More egregious upcoding can result in serious consequences.

4. Charge entry. The charge entry process requires careful attention to detail and accuracy. Charge entry covers the processes of entering and assigning critical data as per guidelines established by the payer(s) covering the procedure. This data includes ICD-10, CPT codes, and HCPCS codes, as well as any changes to codes as per payer guidelines; applicable coding modifiers; date of service; performing surgeon; and details concerning referral source and authorization. This information must be assigned to the correct patient.

When charges are not entered correctly, successfully completing the stages that follow becomes significantly more difficult, if not impossible.

5. Claim submission. When the previous stages in the revenue cycle process are completed, it's time to submit the claim to the payer for consideration. The individuals tasked with this responsibility should be well-trained on how to submit claims to all of the ASC's payers, including Medicare, Medicaid, in-network commercial payers, out-of-network commercial payers, workers' compensation, and personal injury payers. Furthermore, they should stay abreast of the latest payer policies and changing federal and state regulations.

ASCs can count on a variety of solutions to better ensure claims submitted are accepted by payers. For example, surgery centers can use technology that verifies patient eligibility and benefits.

When all goes well, this is a one-time process for each case.

6. Collections and follow-up. When a claim is approved by a payer, payment is sent to the ASC. The collections and follow-up processes help ensure this occurs.

When a payer does not approve or deny a claim in a timely manner, an ASC will need to follow up to check on the status of the claim. If a payer denies a claim, follow-up — along with the submission of an appeal and any supporting documentation — will also be required. These efforts should continue until payment is received or when the ASC determines continued pursuit of payment is no longer worthwhile.

Any errors made during the previous steps in the process will likely make collections and follow-up more difficult and time-consuming. To resolve issues, those tasked with collections and follow-up may need to engage with other members of the revenue cycle team and physicians. This time required will further delay payment and drive up a surgery center's days in accounts receivable. If the mistakes prove too difficult to correct, an ASC may fail to collect payment for services rendered.

7. Payment posting. As one of the final stages in the complete ASC revenue cycle, payment posting serves numerous purposes.

The individual posting the payment should reconcile the payment to ensure it matches what was billed for on the claim. Reconciliation with explanations of benefits should also occur. The payment poster should check for any denials of services and pass them along to team members tasked with appeals. The payment poster should also move any outstanding balance over to the secondary/tertiary payer or patient's account.

One other critical step concerning payment posting is the entry of data. Mistakes made during data entry can lead to inaccurate financial reports, cause patients to receive incorrect bills, and leave money on the table. A seemingly small error like omitting a single figure or placing a decimal point in the wrong place can lead to significant challenges and headaches down the road. Reconciling the payments is a critical step to ensure no data entry errors were made during posting.

8. Patient billing. In an ASC, patient billing and collections typically occur early and, if necessary, late in the revenue cycle process. Prior to a procedure, an ASC should collect a patient's co-pay. It is also advisable at this time to collect the deductible and any co-insurance payment, or at least establish a payment plan for these expenses.

Doing so requires an ASC to determine the patient's estimated payment in advance of the procedure. Surgery centers can use technology to help better calculate an accurate estimate. There are platforms that capture eligibility information along with the expected procedure reimbursement. The technology then examines whether and how much a patient is covered by a health plan(s) and calculates the estimated patient responsibility.

Following payment posting, an ASC should bill any outstanding balance to the patient or issue a refund if the amount collected prior to the procedure exceeded the actual cost for the patient.

With patient financial responsibility increasing, a growing number of surgery centers are offering flexible financial solutions. One particularly popular option is offering patients a secured loan to cover surgical costs. Select lenders fund providers immediately after patients undergo procedures. The lenders then manage all collections activities, with patients receiving loan packages that fit their budgets and financial profiles.

9. Secondary and tertiary billing. While not a part of every case's revenue cycle process, some will require ASCs to bill multiple insurance plans. This occurs when patients carry secondary and occasionally tertiary insurance. To properly bill multiple insurances, ASCs must understand and follow the guidelines governing billing multiple plans. Failure to do so can lead to payment denials and delays.

Anything short of complete is not complete
While some components of the complete revenue cycle may seem less significant to ASC financial success than others, they should all be considered and treated as equals. For example, an ASC can work with terrific coders, but if the operative notes coders work off of are missing key details, coding accuracy will suffer. As another example, an ASC may do a terrific job of collecting payments from patients, but if documentation errors are made earlier in the process, the amounts collected may turn out to be incorrect, requiring refunding or follow-up efforts to secure payment and close a balance.

It is imperative that all components receive the same priority and attention. Technology, such as those solutions described above, can greatly help achieve these objectives and improve an ASC's revenue cycle performance. But managing the complete revenue cycle internally often still proves challenging for ASCs. It requires finding and retaining qualified staff, delivering regular training to ensure staff remain current on rules and regulations, and performing ongoing monitoring and auditing to detect and correct problems.

These are just a few of the reasons why many ASCs choose to outsource their revenue cycle management. While this is often a wise decision that can improve collections performance and reduce the expenses and stress of business office-related human resources responsibilities, surgery centers should exercise due diligence when researching revenue cycle management vendors.

Vendors that provide complete revenue cycle services will manage all of the processes efficiently, effectively, and with equal levels of attention. They do so by ensuring staff are experts in their areas of assignment; are kept updated on rules, regulations, and best practices; and have their performance continually monitored and audited. The results will include strong collections, an accelerated revenue cycle, and satisfied owners and patients.

Strengthen your process with a revenue cycle assessment
As we've noted, a wide range of issues can disrupt an ASC's revenue cycle process. When issues occur and linger, the process will struggle, leading to unnecessary work for staff and wasted time and resources. If problems are not corrected in a timely manner, more money will be lost. Many ASCs lack a comprehensive understanding of their revenue cycle components and each component's performance level.

To strengthen revenue cycle processes, ASCs should undergo routine revenue cycle assessments. Assessments can help identify problematic areas and worthwhile solutions to consider, such as technology and outsourcing. Learn more about the value of these assessments by reading "What is an ASC revenue cycle assessment: 10 things to know."

Angela Mattioda (amattioda@surgicalnotes.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.


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