Revenue-healthy ASC New Year's resolutions: 6 best practices to improve your financial performance in 2019

Written by Caryl Serbin, RN, BSN, LHRM, President and Founder, Serbin Medical Billing | January 02, 2019 | Print  |

It's the time of year for New Year's resolutions.

Why not resolve to make 2019 the year of unqualified financial success for your ASC?!? What will you need to do to get and then keep your ASC financially healthy throughout the upcoming year? The answer is practicing basic and consistent positive habits — let's call these best practices.

To help get you on the road to success, below are six such best practices worth following. To further assist you in your efforts, this article also includes guidance on how to effectively evaluate different areas of your performance, develop solutions and measure your performance.

1. Conduct regular review of your fee schedule. ASCs often forget to evaluate their fee schedule regularly and frequently find they are not collecting all monies owed to them.

Evaluation/solution: If you haven't adjusted your fees in several years, it's probably time to do so. At least once or twice a year, audit your fees by checking your most common procedures to see if you're maintaining the profit margin forecast in your budget. Create a spreadsheet showing reimbursement rates from your prominent carriers and Medicare as compared to your fee schedule and your cost (both direct and indirect costs) for common procedures. Review the complete list of equipment, supplies and implants needed for your most commonly performed procedures. Pick out a costly specialty and determine if you are hitting your profit margins. If you're not, that might be a sign that you need to increase your fees.

Measurement: Compare reimbursement of specific procedures pre- and post-fee schedule changes. Determine if payors are allowing increased reimbursement and paying accordingly.

2. Perform annual review of managed care contract reimbursement. Although you may not consider managed care contract negotiation a part of revenue cycle management, they go hand in hand. Due to increasing supply and staff expenses, the cost to perform certain cases may exceed the current contracted reimbursement for those cases. In most cases, discussions with the managed care company's provider representative regarding excessive case costs can result in a fair and equitable change in reimbursement.

Evaluation/solution: At least annually, prepare a spreadsheet showing case costs (direct and indirect), including costs for frequently used implants, on your top 10 most cost-expensive procedures. Compare the costs to the reimbursement from your top payors. If necessary, contact your provider relations representative, provide this individual with your costs and negotiate carve-outs for high-cost procedures, where needed.

Measurement: Carefully audit newly negotiated reimbursement rates to determine if the payor is paying accurately.

3. Complete regular evaluation of pre-procedure workflow. Accuracy and timeliness are important aspects of scheduling, insurance verification and patient financial counseling and can significantly impact your revenue. Incorrect or incomplete information causes payment delays and claim denials.

Evaluation/solution: Conduct regular, ongoing auditing of information received by your scheduler and the accuracy and timeliness of patient demographic input. Perform regular auditing of insurance verification for timeliness, completeness and accuracy of information received and entered in your system. Finally, regularly audit your patient financial counseling process, checking to see if information is provided in a timely manner, guidance is effectively provided to help ensure patient understanding of financial responsibility and patients are properly informed of the manners in which they can cover their portion of the procedure.

Measurement: Run reports showing patient payments and number of patient payment plans. Audit your cancellation log for cancellations due to non-covered procedures. Audit your denial log for non-covered procedures and denials due to demographic errors.

4. Optimize coding. Coding should be completed in the manner that ensures appropriate reimbursement while maintaining compliance. Errors or incomplete coding can delay or decrease reimbursement. Ensure that allowable implants and supplies are being coded and appropriate modifiers are being used.

Evaluation/solution: It is advisable to use certified coders. Provide ongoing education for your coders. Notify coders of all changes/updates from government and private payors. Keep coding references and software current. Provide access to research new or questionable codes with online services or list-serves. Work with providers to ensure procedure notes identify all procedures performed.

Measurement: Audit your denial log for denials due to coding errors. Audit coders for accuracy on a monthly basis, including coding for implants and supplies as well as proper utilization of modifiers. Schedule at least annual audits for your coders that are conducted by an outside coding audit company and then educate your coders on the findings.

5. Regular evaluation of post-procedure workflow. Each area in the billing and collections process can be a target for errors and delay, thus either delaying or eliminating appropriate reimbursement.

Evaluation/solution: Conduct regular, ongoing audits of charge posting and claim submission for timeliness and accuracy. Provide the person responsible for charge posting and claim submission with the necessary training and education. Establish realistic goals for this individual(s) to achieve the time and accuracy parameters set by management.

Perform ongoing audits of collections of government and private payors and patient balances. Set attainable goals based on accounts receivable (A/R) areas (over 30-60-90 days, amounts owed, private payors, government payors, overdue patient balances). Post collection goals on a bulletin board with graphs showing success rates.

Audit your payment posters to determine whether all payments received are posted to patient accounts and deposits made the same day as received. Provide an insurance contract matrix to payment posters so they can determine accuracy of payments according to contract rates. Start a denial log to track types of denials (e.g., lacking information, form errors, clearinghouse errors, coding errors, timely filing).

Review a sampling of no-pay explanation of benefits (EOBs) to determine trends. Also, make sure all no-pay denials are listed on the denial log. Review errors with applicable staff and discuss ways to improve.

Measurement: For claim submission, review clearinghouse electronic submission receipts for appropriate dates and successful transmission as well as checking with payors to validate claim acceptance. Check denial logs for timely filing and form errors as well as missing information. Check billing reports against scheduling reports to determine if all surgeries have been charged and billed.

For collections, run A/R reports by date of submission for payors and patients. There are multiple A/R reports you can run that help pinpoint areas that need additional attention. Check collection notes reports to determine whether accounts are worked in a timely manner.

Audit payment posters for accuracy, comparing payment received against rates allowed by payor. Check posting reports against deposits. These should balance and be posted within 24 hours of receiving monies. Deposits should have bank proof attached.

6. Maintain control of accounts receivable. A/R reporting can provide tremendous insight into the health of your center and help explain possible reasons for inconsistent cash flow. There are several goals that should be an integral part of managing your A/R.

Evaluation/solution: Get and maintain A/R days below 50. To calculate your days in A/R, add charges for the last three months and divide this by the number of business days during that time period. Divide this number by the current balance in your A/R. This figure is your days in A/R.

Also, analyze trends by payor. Delegate the oldest, highest balances to collectors for immediate action. Follow up on appeals (previously submitted requests to payors regarding non-payments or incorrect payments) to determine if they are being worked regularly and appropriately.

Evaluation/solution: Decrease accounts over 120 days old to below 20% of total accounts. Audit your A/R for errors. Adjust off any necessary contractual adjustments that were not completed at time of posting. Write off any small balances below $10 (or an amount agreed upon by your governing body). Offer a one-time discount to patients of 25% off their balance if they pay in full in 30 days. Divide the over-120 insurance accounts into categories (e.g., managed care, Medicare, workers' compensation, commercial insurers, Medicaid) and assign a collector to work each category for three days, starting with the oldest and highest balances and then moving on to the next category. Repeat this cycle. If there is a large amount of patient overdue balances, consider adding part-time evening shifts or regular collectors working a couple of hours of overtime to call overdue patient accounts and run extra patient statements.

Measurement: Benchmark your center against national standards. National organizations such as ASCA and MGMA offer such standards for sale. Measure A/R, collections activity, case costing and other viable categories against other centers nationwide.

Reap the Rewards of Your Efforts
While the activities described in this article may seem like momentous tasks, if executed, the results should be well worth the effort. Even though these are New Year's resolutions, not all of them have to be evaluated and implemented immediately and at the same time. Resolve to approach each suggested best practice one month at a time. By the end of six months, you will have a financially healthier ASC with increased efficiency and a more stable 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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