Effectively Reduce A/R Days at Surgery Centers: Q&A With Rebecca Overton of Surgical Management Professionals

Rebecca OvertonRebecca Overton, the director of revenue cycle management at Surgical Management Professionals, shares how surgery centers can reduce accounts receivable days, the challenges in managing this reduction and why improved A/R days are worth it.

Q: Is there an ideal number of A/R days for surgery centers to aim for?

Rebecca Overton: Ideal days in A/R will vary based on facility specialty and payer mixes. For multispecialty facilities with orthopedics and worker's compensation volume, below 40 days in A/R is a realistic goal. For single specialty facilities, such as pain or ENT centers, the goal should be lower. An ideal goal for these facilities is to be below 35.

Q: What are a few ways to cut down A/R days at ASCs?

RO: Every process in the revenue cycle affects days in A/R. Below are a few ways to work to decrease days in A/R in every facility:

1. Ensure timely documentation required to code and bill cases. Management of the processes involved can help improve days in A/R. This includes review of current transcription turn-around times (this should be no more than 48 hours, 24 hours is most ideal), consistent communication with physicians on outstanding dictation and physician queries to ensure they are completed timely and efficient processes for gathering required pathology reports for your coding staff.

2. Set the expectation for your coder, biller or billing company. Set the expectation to get clean claims out within 24 to 48 hours of receipt of necessary documentation. This includes follow-up of any electronic rejections received after claim upload.

3. Manage the denial process. Effective denial management is critical to meeting your days in A/R goals. This includes having a process in place for ensuring denials are tracked, setting the expectation for staff on turn-around time for denials to be worked and ensuring staff have a good understanding of how top denials should be handled to guarantee claim payment is received as quickly as possible. Denials should be worked within two business days of being received. Currently, the expectation for my own revenue cycle team is within one business day. If the process is set-up and communicated to all, this should be a reasonable expectation.

4. Learn payer-specific policy. Education on payer specific medical policies is becoming more and more important as more complex case types are being shifted to the ASC. Ensuring availability of training for your staff on importance of LCD/NCD requirements for Medicare, as well as major payer medical policy guidelines will be vital to a healthy revenue stream. Make sure that your staff understands what tools are available to them. Local Medicare intermediaries and some commercial payers have webinar training and/or online access to policies for education on these types of issues.  

Q: What challenges do ASC leaders face in meeting their goals for A/R?

RO: Keeping up with changing medical necessity requirements, changes in payer reimbursement policies and the proactive planning for upcoming ICD-10 transition will be vital. In addition, as more people become insured, continually reviewing staffing will become important as well.

Q: How can these challenges be effectively addressed?

RO: Whether it is through ASC leadership involvement in the revenue cycle processes or through seeking assistance from outside revenue cycle professionals, ensuring that enough focus is dedicated to upcoming changes and current challenges is a must. Sound understanding of payer contracts, billing guidelines, state statutes affecting reimbursement, best practice policies and procedures and changing medical necessity guidelines will be key to consistent cash flow.

Q: What are a few common mistakes that ASC leaders make when trying to improve A/R days? How can these mistakes be avoided?

RO: The biggest mistake ASC leaders can make is to not take an active role in their revenue cycle or to assume that revenue is optimal because you are able to make distributions. In addition, focusing only on days in A/R without also focusing on cash collections can prove to be a big mistake. While days in A/R is a very important financial key performance indicator, using this alone as the measure for revenue cycle success is not advised.

Q:  What are the benefits of improving A/R days?

RO: The benefits of improving A/R days is quicker turn-around of cash collections, less risk of non-payment of A/R due to age and overall more consistent cash flow. It also helps revenue cycle staff satisfaction as it improves day-to-day workflow and creates an environment where, typically, the staff feels more fulfilled as they are meeting critical goals.

More Articles on ASC Issues:
Health Insurance Exchanges Open Tomorrow: Are Ambulatory Surgery Centers Ready?

5 Reasons to Bring the Surgery Center Pre-Admission Process Online

Eliminate Bad Debt: 4 Steps for Ambulatory Surgery Centers

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