Revenue cycle benchmarks are growing in popularity at ambulatory surgery centers (ASCs).
Keeping an eye on these numbers can help management to identify potential areas where processes and profitability can be improved. In addition to providing a comparison to others in the industry, benchmarks also offer insight into a center's individual processes and performance to ensure best practices and goals are being met. Clinical outcomes, billing performance and staff indicators are just some of the areas where benchmark statistics are frequently used.
While benchmarks can be very helpful, it is important to remember these numbers are simply an average which can take into consideration many different variables. Therefore, they are not always what they appear to be and should not be considered the end all be all; this is particularly true when considering billing performance.
For example, it is not uncommon for centers to write off outstanding A/R after a certain number of days. While this practice is fine, the resulting days in A/R statistic is slightly skewed for those who are unaware of the write-off. Then, of course, there are other centers that may have legal cases outstanding. If the case is not resolved in a reasonable amount of time, this too could skew a center's days in A/R causing the number to jump up significantly.
For centers considering an outsourced billing partner, it is important not to be swayed by benchmark numbers alone. There are many different factors to consider when selecting a partner. To help you in your evaluation, consider the following:
1. Have realistic goals. Achieving the lowest possible days in A/R is a primary goal for most centers. In fact, it is not uncommon for a management company to say they want all of their ASCs to be below a certain number of days in A/R. However, it is unrealistic to assume that a particular benchmark number can be attained by every ASC because each ASC is its own entity, with its own case and payor mix. What might be an absolutely great number for one center, can be an incredibly poor number for another center. If a billing company says they can reduce your A/R days by x amount, ask them to show you how they plan to do this.
When considering an outsourced billing partner, go in with your eyes open and make sure that your expectations are realistic. It is unrealistic for a billing company to say they can reduce your A/R by a certain amount (based on some sort of benchmark) if they haven't even looked at your billing. The billing company must first do an analysis to see who is not paying and why, then offer ways to fix this. Ask for examples that demonstrate how they will improve your A/R days.
2. Watch out for vanilla contracts. Before signing a contract, make sure your center and the billing company you are considering are on the same page. Work with the billing company to define standards and review contracts closely. Never assume something is included if you don't see it in writing.
The standard billing contract is typically two years. A reputable billing company wants stability and to know as long as they are doing a good job for your center, you will stay with them. However, there are companies out there that will over-promise and under deliver. Therefore before signing a contract, make sure there is a clearly defined cancellation clause in the event the billing company fails to provide what they promised.
3. Find a partner that is an expert in ASC billing. Because there are significant differences between hospital, outpatient department, physician care practices and ASCs, it is important to select a billing company that is extremely well versed in ASCs. Medicare bills differently, credentialing is different with payors, documentation requirements are different, reimbursements are different, the codes used are different; there is always something a little bit different for an ASC. How long a patient can be at a center, the definition of a surgery; things are constantly changing in an ASC environment and are never the same from state to state. Therefore, you need a billing company that knows what to look for, is familiar with the standards for ASCs, and is on top of changes.
4. Look for longevity. Make sure the billing company you select has a proven track record. When it comes to complex ASC billing, experience matters. The company should have well defined, proven processes, not just lip service and dreamy benchmark numbers. Make sure the company is staffed properly as well.
Because this is a partnership, you want to make sure the company will be around for the long haul. Therefore, look for a billing partner that has a larger, stable company behind it.