As Q1 2018 comes to an end, the time is right for an operational check-up
You have closed out your financials for 2017 and you probably set new goals to optimize your ambulatory surgery center (ASC) financials in 2018. A few months later, when the quarter draws to a close, it is time to assess how well your ambulatory surgery center is doing with respect to the new and improved mission.
To check your progress, it’s important to review the entire operationfrom the patient experience to the claim being paid correctly, and everything in between to make sure that your organization is on the right track.
Starting with an operational audit can shed light on whether your ASC is moving toward achieving its goals or if there are problems impeding your progress. More specifically, to ensure your ASC is moving in the right direction, take time to:
• Review operational flow from beginning to end
• Examine revenue cycle benchmarks and KPIs and how your ASC measures up
• Identify areas where there are opportunities for improvement
• Set clear goals for every member of the ASC team
• Make sure goals are communicated to staff and presented in an area that is clearly visible
• Secure buy-in to organizational goals
• Create an operation’s wish list that prioritizes what’s needed to succeed – technology, appropriate staffing, additional training, etc.
Having an operational checklist ensures that your ASC is in a position to successfully deal with pending regulatory changes. For example, ASCs need to be ready to succeed under value-based care models, where providers will be paid based on the quality of care delivered, not merely the quantity of services delivered. More specifically, your organization should be ready to comply with the final 2018 ASC rule, which was released by the Centers for Medicare & Medicaid Services (CMS) in November of 2017.
CMS also has introduced “patients over paperwork initiative,” a process that evaluates and streamlines regulations with a goal to reduce unnecessary administrative burden, increase efficiencies, and improve the patient experience. Specifically for ASCs, CMS is finalizing the removal of three ASC quality reporting measures for the CY 2019.Removal of these measures would reduce maintenance costs and administrative burdens with a reduction of approximately 1,314 hours and a savings of $48,066 collectively for ASCs. Additionally, CMS is finalizing a removal of six hospital quality reporting measures. Removal of these measures would lead to a reduction of 457,490 hours and a savings of $16.7 million collectively for hospitals in the CY 2020.
The focus is clear. It should be all about the patient and, therefore, ASCs need to pay close attention to their revenue cycle operations. Hours managing the revenue cycle should be aligned with achieving compliance with these federal programs, which are designed to improve patient outcomes and satisfaction. In addition, hours should also be spent ensuring that your organization is paid correctly for services performed.
ASCs should also be on the lookout for any changes with procedures being added to the ASC covered procedure list. For CY 2018, CMS made the determination that total knee arthroplasty, partial hip arthroplasty, and total hip arthroplasty would not be added to the covered procedure list. CMS announced that it was going to allow for further discussion and additional feedback before determining if these procedures would be added to the ASC list in the future. These changes could have a significant financial impact for surgery centers across the country.
Fourteen revenue cycle specific checklist items
While it’s important to look at overall operations, ASCs need to pay particularly close attention to revenue cycle issues. To get started, leaders should make sure that someone is accountable for the following areas:
#1: Contracts. Are your contracts easily accessible and organized with the most up to date changes and or amendments on file? Does your revenue cycle team understand the reimbursement for your managed care contracts for procedures performed in your ASC? Take into account the changes that payers are requiring as new payment models unfold and don’t pass over the fine print. For example, it’s especially important to ensure that bundled payments cover the cost of implants. ASCs often unknowingly enter into contracts that do not pay them for implants and, therefore, lose money.
#2: Chargemaster. What is your chargemaster set at and why?Are there any procedures where you are charging less than allowed amount under your managed care contract? When was the last time your chargemaster has been reviewed and/or changed?
#3: Patient registration accuracy. What is your demographic error rate for your ASC? Obtaining the patient’s correct insurance information and loading it accurately in your practice management system is vital to getting your claims out the door in the most efficient way. Is your ASC currently capturing all patient eligibility and applicable authorizations for each case? Are your patients aware of their out of pocket expense as it relates to services performed?
#4: Payer guideline changes. Payers typically update their guidelines at the beginning of the second quarter. Changes can include anything from services once covered to those same services no longer being covered, authorization requirements, use of modifiers, procedure frequency, medical necessity, narrow network additions, etc.
#5: Key performance indicators. Each department within the revenue cycle needs to know exactly what its goals are. Therefore, you need to ensure that key performance indicators are in place and well understood by all staff members. Business intelligence and analytic tools can help provide insight to monitor performance and hold your team accountable. KPIs include days to bill, aging percentage over 90, days in AR, cash per case, charge per case, monthly case volume, monthly cash goals, payer and specialty mix, gross collection ratio, etc.
#6: Coding compliance, changes, and accuracy. A variety of coding changes came to fruition in 2018. Examples include: changes to pass through codes for pain and ophthalmology procedures, such as Omidria and Nevro high frequency spinal cord stimulation generators, which were separately billable and payable, however, now have N1 status, which means that payment is packaged and no separate reimbursement is allowed. There are a few ENT procedures that will have combo codes for 2018. For example, CPT code 31253 has been created and should be used instead of reporting both CPT31255 and CPT 31276 together. However, CPT code 31255 and CPT code 31276 are still valid codes and appropriate to be billed when performed separately. In this example, reimbursement decreased by 50% as there was no increase in reimbursement for the new combo code.
#7: Physician documentationturnaround. What is the average turnaround time for physician documentation? Are physicians quickly dictating notes with your current process? Are there opportunities to leverage new technology? Analyzing the physician turnaround time and discussing any delays with your group is a quick way to improve days to bill and consistent cash flow.
#8: Unbilled claims reconciliation. Does your ASC have a process in place to identify claims that have not been billed? Does your current software system allow for your team to track claims that have not been billed?
#9: Charge posting accuracy. Are your charges being posted correctly for all services performed in each case? Pay close attention to cases with implants as most implant charges are manually calculated allowing plenty of room for error. Implants can be the most expensive part of the surgery, so it is important to get these charges right.
#10: Claims turnaround. Evaluate the time it takes to move from receipt of source documentation, to code the claim, postthe charges, and submit the claim. By monitoring these steps, you can understand and improve upon the days to bill for your ASC.
#11: Claims rejections. Rejections should be worked the same day. Login to your clearinghouse and pull a report on outstanding rejections. How long is it taking your team to work them? What are your top claims rejections reasons? Is there anything that can be done on the front end to prevent your claims from rejecting? Does your clearinghouse have edits turned on to ensure that you are sending out clean claims?
#12: Communication practices. What are your current methods of communication? Meetings, emails, phone calls, reports, etc.? Does your ASC have a standardized way of communicating issues identified, financial performance, and any other important information to the appropriate stakeholders?
#13: Staffing optimization. By looking at various performance metrics, you can determine if your revenue cycle team is appropriately staffed with the necessary experience. For example, if you have frequent coding errors, you might be working with aninexperienced coding staff who don’t understand all of the ins-and-outs of ASC coding. As such, you would want to consider hiring certified ASC coders who have experience in the specialty that you are serving.
#14: Denial trends. What are your ASC’s top denial trends? How much money is tied up in denials and what are you doing about it? Are you getting reimbursed correctly for the services your ASC provides? Tracking and trending denials seems like such an easy task but it’s one of the first areas problems start to literally pile up. Denials should be discussed often and staff should always be looking to find solutions to prevent your claims from denying in the first place. You can’t fix the problem if you don’t know what the problem is.
If you take the time to review your ASC operational strategy, your ASC will likely be in a position to succeed. The ASC revenue cycle is incredibly nuanced, however, all ASCs have the ability to make improvements before this financial year comes to an end. As Arthur W. Jones, an Australian born sociologist and former editor of Fortune Magazine once said, “All organizations are perfectly aligned to get the results they get."1
References
1. SQT Training. https://www.sqt-training.com/2016/03/all-organisations-are-perfectly-aligned-to-get-the-results-they-get/