10 reasons joint-venture ASCs struggle with revenue cycle management

As ASCs continue to surge in popularity with patients, physicians, payers and hospitals, more hospitals and health systems are joining with physician groups to develop joint-venture (JV) ASCs.

Additional factors contributing to these partnerships include continued regulatory changes, economic pressure due to reduced reimbursement, development of value-based care reimbursement methodologies, migration of higher acuity cases into the outpatient setting and increased compliance requirements.

While the hospital and physician group may have different perceptions of what is required for JV ASC success, both typically agree that a steady revenue stream is essential. However, their approach to attaining this goal may differ. The following are 10 reasons why a JV ASC may encounter revenue cycle management difficulties.

1. Misguided software choices. If either entity believes its software (i.e., hospital or practice management platform) can effectively perform surgery center billing and the JV ASC uses that platform, problems are likely to develop. ASCs — including JVs — will bill most effectively when using software developed specifically for the ASC model.

2. Lack of scheduling, insurance verification and financial counseling. These essential functions can be overlooked because hospitals are accustomed to having separate departments to perform these tasks. When considering revenue cycle management, a hospital may believe it just refers to coding, billing and collections — functions that a hospital knows must be performed in the ASC. However, a hospital can fail to connect the relevance of scheduling, insurance verification and patient financial counseling to the revenue cycle.

3. Shared staffing. The hospital and physician group may believe it is acceptable to use some of their staff to perform ASC business office duties if they do not understand that an ASC must be operated as a distinct entity. Shared staffing can also create revenue cycle changes when staff complete tasks following rules and processes for one entity when they should be following the rules and processes of the ASC.

4. Non-ASC-specific business office staff. The partners in a JV ASC may choose to hire hospital outpatient department (HOPD) or physician business office staff. If these team members lack ASC-specific knowledge, coding, billing and collections will likely suffer.

5. Lack of business office policies and procedures. Most ASCs rely upon a set of manuals detailing clinical and compliance issues. Perhaps just as important — but often overlooked in a JV ASC — is the development of a business office policies and procedures manual.

6. Managed care contracts do not include ASC. JV ASCs often bill by following outdated HOPD contracts. This occurs when there is no negotiation conducted by the partnering entities to include the ASC on such contracts.

7. Lack of upfront patient collections policy. Hospitals often do not require upfront payment of deductibles or copays. In an ASC, such collections are vital. When a JV ASC does not implement a patient collections policy and provide adequate training for staff, upfront collections suffer.

8. Lack of business office management/oversight. The hospital and physician group may expect that the JV ASC will receive enough support from the partnering entities that they will task a sole administrator with filling all management positions. A thriving business office typically requires its own manager.

9. ASC using HOPD fee schedule. ASCs need a separate fee schedule specific to the ASC and based on ASC reimbursement as payers do not reimburse HOPDs and ASCs equally. Using HOPD fees and being reimbursed at ASC rates will result in a confusing accounts receivable and financial reporting.

10. Poor follow-up processes. If a JV ASC lacks adequate surgery center-focused policies, procedures, training and management, the complete revenue cycle process (e.g., coding, billing and collections) will be error-prone and lack timely completion, resulting in reimbursement denials and delays.

Key to JV ASC revenue cycle success
The primary reason JV ASCs struggle with revenue cycle management is the difference in hospital and physician practice environments — hospitals typically have separate departments assigned to each revenue cycle management task whereas practices tackle these tasks with very limited staff who often share more than one revenue cycle management responsibility. Secondarily, a lack of understanding of ASC-specific rules, regulations and day-to-day revenue cycle requirements may preclude the goal of a steady revenue stream.

The wisest decision for a JV ASC may be outsourcing to a quality ASC-specific revenue cycle management company. Such a company can provide essential knowledge and experience, act as a liaison between the hospital and physician group and help ensure the ASC achieves positive, consistent cash flow.

Caryl Serbin, RN, BSN, LHRM, is president and founder of Serbin Medical Billing, an ASC revenue cycle management company. Serbin Medical Billing's primary objectives are to provide the best coding, billing and accounts receivable management services available to ambulatory surgery centers (hospital joint-venture, corporate-owned or independent) and anesthesia providers. Ms. Serbin has been a leader in the ASC industry for 30 years. She was the founder of the first ASC-specific billing company.

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