Improving ASC KPIs: Specialty and payer volume trending

By monitoring and analyzing key performance indicators (KPIs), ambulatory surgery centers (ASCs) gain greater control over their revenue cycle performance. This allows for faster identification of shortcomings that can reduce revenue and profits while enhancing the ability to implement data-driven solutions to resolve problems.

This second article in an ongoing series about improving ASC KPIs focuses on two metrics with similar qualities: specialty volume trending and payer volume trending. Note: Access the previous article on days to bill and days to pay.

Why you should monitor these KPIs
By trending the case volume of each of its specialties, an ASC can determine potential scheduling issues and future (projected) revenue. A center may find itself in line with its total projected monthly volume, but if volume of a higher paying specialty is lower than projected, net revenue will be impacted. Since this KPI requires comparison of multiple specialties, it does not apply to single-specialty ASCs.

Similarly, trending the case volume of each payer or financial class can also help identify potential scheduling issues and determine future revenue. A center may be in line with its total monthly payer volume, but if the volume of a higher reimbursing payer is lower than projected, net revenue will be impacted.

Since specialty and payer types vary by center, so will the benchmarks for these KPIs.

Red flags to watch for
For specialty volume, trend the percent of total billed charges to each specialty and then compare it to the percent of revenue for each specialty. If charges are high and revenue is lower than normal, this may indicate an issue.

Consider an ASC performing orthopedic and pain management cases, with a typical monthly volume split of 80% orthopedic, which tends to be higher paying, and 20% pain management, which tends to be lower paying. If that volume split shifts to 50% orthopedic and 50% pain management on a given month, net revenue for that month will likely decline. If this specialty split trend continues or does not return to the typical monthly split, it can have a long-term, significant financial impact.

For payer volume trending, trend the percent of total billed charges to each payer or financial class and then compare it to the percent of revenue for each. If charges are high and revenue is lower than normal, this may indicate an issue.

Consider an ASC typically performing 80% commercial cases and 20% Medicare cases each month. If that split shifts on a given month to 50% commercial, which tends to be higher paying, and 50% Medicare, which tends to be lower paying, net revenue for that month will likely decline. As with specialty trending, if this payer or financial split trend continues, an ASC can experience a significant financial shortfall.

Contributing problems
Undesirable changes in case volume can affect these KPIs and are typically attributed to poor scheduling, cancellations, and/or declining referrals.

Solutions to pursue
Catching and correcting unwanted shifts in case volume require the same initial approach: trending volume on a monthly basis. Doing so will help identify whether a top-paying specialty(s) or top-paying payer(s) has declined in volume. If such a decline occurs, an ASC should initiate discussions with its business office leaders and, if necessary, providers to determine the cause(s) of the volume shift and take steps to correct it.

Next in the KPI series…
Stay tuned for our next article is this KPI analysis series, which will focus on days in accounts receivable (AR) and AR greater than 90 days.

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.

More articles on surgery centers:
4 things to know about cardiology in ASCs for 2020
5 insights from experts about the future of ASCs
8 ophthalmic ASC openings in 2019

 

 

 

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