10 red flags that your ASC's revenue cycle management is coming up short

Revenue cycle management (RCM) can make or break your ASC.

Effective RCM is vital for ensuring that ASCs are paid in a timely and accurate manner. When RCM performance suffers, ASCs can leave large amounts of money on the table, potentially turning once profitable procedures into money losers. And like all businesses, ASCs cannot operate for an extended period at a financial loss.

The following discusses 10 common areas of RCM management and warning signs of practices associated with each area that may be negatively affecting your revenue cycle as well as guidance for how to correct these problems if they are impacting your revenue stream.

1. Registration and insurance information. If information is inaccurate or incomplete, this may result in delays or denials. Always verify all information prior to submitting claims.

2. Operative notes. Delays in receipt of operative notes mean delays in claim submission. This leads to delays in receipt of payment. If the completed provider note is not received within 24 hours, contact the provider's office to request that it be completed promptly.

3. Coding and billing staff. Delays in claim submission often stem from business office staff having to perform other tasks which do not allow sufficient opportunity to code or bill claims in a timely manner. Coders and billers need sufficient, uninterrupted time to accurately process claims for on-time submission.

4. Clearinghouse transmission. Delays in claim submission can often stem from errors occurring during clearinghouse submission. Always obtain receipt of transmission. Shortly after claim submission, check with the third-party payor to verify the claim is on file.

5. Third-party payor requests for information. When third-party payors request additional information, such as operative notes and invoices, this is already delaying your receiving reimbursement. Ensure response to these requests is achieved promptly.

6. Payment posting. Delays in posting payments and making deposits results in loss of income. Accrual of interest is based on monies in the bank, not on somebody's desk. Lags in payment posting may be due to insufficient or inattentive staff. Business office administration should audit this area closely for timeliness and accuracy of deposits.

7. Collection actions. Holdups and lack of continued collection action not only delays reimbursement, but, in some cases, promotes non-payment. Collectors should understand payor reimbursement timelines (e.g., Medicare usually pays within 14 days, workers' compensation within 30 days) and begin follow-up procedures if these are not met. Schedule regular follow-ups with payors using aging accounts receivable (A/R) reports by payor on a weekly basis.

8. Third-party payor contracts. A lack of understanding of contract requirements often results in delays or non-payment of claims. Keep payor contracts updated in your software program. This allows understanding of a payor's timely filing requirement so that claims are not denied because they were not filed on time.

This also applies to corrected claims and denial timelines. Document all correspondence with payors and include date, payor representative and actions taken. Also, be aware of your state's prompt payment laws and enforce them with delinquent payors.

9. Denials. Responding to denials of payment is often overlooked or postponed. Timely response to erroneous or denial of payments is paramount for obtaining the maximum, appropriate reimbursement owed to your ASC. Develop a specific protocol for denial management and follow it diligently. A method of tracking denials should be created to identify similarities or trends.

10. Appeals. Due to the time-consuming nature of appeals, avoidance of this task is quite common. Develop and use customized appeal letters which always include supporting documentation. Incorporate wording of questions that require more than a form letter response from payors. Always take denials to the highest level of adjudication.

Closely Monitor Your RCM Performance
Interruptions or slowing of your ASC's revenue stream may indicate problems in your RCM that need immediate attention. The best way to catch these issues early and bring about improvements is through regular internal audits of all areas affecting the financial health of your ASC. Recognize and promptly address symptoms of a failing revenue cycle before it become fatal.

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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