Todd Borst, managing partner of Smithfield Surgical Partners in Northern California, shows four ways ambulatory surgery centers can boost income on payor contracts.
1. Go slow with negotiations. "When dealing with insurance companies, the best tactic is to wait," Mr. Borst says. "Do not accept the first contract they offer." Generally, a better offer comes to those who wait. Even when an existing contract is nearing expiration, there usually are provisions to allow the old contract to continue until a new one can be signed.
2. Provide data. Comparing the cost and quality of ASC procedures with those in hospitals is an effective negotiating tool. Gather data and compile reports before a new contract is negotiated so that the information is current, which strengthens its impact. "The goal is to show the payor in very concrete terms how much money they could be saving if they moved the appropriate procedures out of the hospital into the ASC," Mr. Borst says.
3. Research the market. Successful payor negotiations require granular knowledge of the market. Contact administrators at other ASCs in the area to get useful strategic information. Though competing ASCs are barred from sharing information on specific prices, Mr. Borst says his centers have asked for general information on the market from other ASCs. This information can include percentage of Medicare the center is generally being paid by all the HMOs and commercial insurers in the market. He also asks other ASCs about their success in obtaining reimbursements for orthopedic and spine carve-outs.
4. Compare EOBs with the contract. ASCs should be comparing payments they have received, as reported in the payor's explanation of benefits, with the payor's contracted obligations. "Payment policies differ by insurer, so it is important to go back to the contract," Mr. Borst says. For example, some contracts will pay overhead costs and some won't. ASCs that do not check EOBs are leaving money on the table. However, some missed payments cannot be recouped, such as claims denied because the ASC failed to obtain preauthorization. But even these cases provide valuable lessons to ASC staff on where they could be doing a better job.
Learn more about Smithfield Surgical Partners.
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