Why is my ASC losing money? 9 post-procedure areas to focus on (Part II)

Many processes impact an ASC's profitability. Identifying and then fixing the revenue leaks in these processes often proves quite difficult.

In part I of this two-part series, I identified eight pre-procedure reasons why ASCs may lose money and shared guidance for correcting issues. Part II highlights nine post-procedure reasons why your ASC may be losing money and provides best practices for correcting such problems.

Reason #1: Inaccurate, non-compliant coding
Cause: Inexperienced or uncertified coders often lack the educational background required to accurately determine what procedure codes may be billed in addition to the primary code. Also, procedure code modifiers may be used incorrectly or not at all. Implants and allowed supplies may not be billed. All can adversely impact revenue.

Solution: Employ experienced certified coders who can optimize your reimbursement. Revenue can often be enhanced by 5% to 50% via detailed dictation and accurate coding while maintaining compliance with coding regulations.

Reason #2: Inaccurate or incomplete charge posting/claim submission
Cause: Inexperienced billers may not understand when or where to enter codes, modifiers or place of service correctly. They may also fail to send necessary attachments when submitting the original claim. Failure to send claims within the recommended time of 48 hours from date of procedure may result in reimbursement delays. Errors may occur because a biller is also the backup scheduler and fills in for the receptionist at lunchtime. Lack of sufficient time, as well as frequent interruptions, often result in hurried entries and errors.

Solution: Experience is an important requirement for any business office staff member; however, the ASC's cash flow depends on the skills of the revenue cycle team members. Each member of the team must understand their role and its specific requirements. Assign a specific time that the biller can work alone and in a quiet area to enter the information in a timely manner.

Also, do not underestimate the negative effect that clearinghouse errors can have on your cash flow. Your biller must understand the importance of ensuring that the clearinghouse has received all claims submitted, that they're forwarded to the appropriate payer and that the payer acknowledges receipt.

Reason #3: Delay in starting collection procedures and inadequate follow-up on denied claims
Cause: Inexperienced or insufficient collection staff leading to delays in starting claim follow-up until 30 to 60 days after submission. In addition, claims returned for errors or additional information not responded to in a timely manner or no follow-up is performed.

Solution: Conduct follow-up calls to ensure claims are received within seven days of submission for managed care claims. Perform such verification electronically, when possible. Direct follow-up with payers should begin 15 days after submission. Ask payers for the anticipated payment send date (not issue date). Follow up again on send date to see if payment has been sent.

When claims are returned for any reason, resubmit them with corrections or requested information immediately. When payment is denied or incorrect, file an appeal. Collectors should understand and enforce contract language, enforce state prompt payment regulations, use a tickler file for regular follow-up, accurately document follow-up contacts, work each claim at least every 30 days after initial contact, use well-written appeal letters which include sufficient information and follow appeals to the highest level of adjudication.

Reason #4: Inexperienced or careless payment posting
Cause: Payment posters fail to catch errors in payment and incorrect amount sent by payer is posted to patient account without follow-up.

Solution: Attention to detail, sufficient time and a quiet area to complete this task are required for accuracy. Ensure contracts and payment allowances are loaded in your computer so it can alert the payment poster of inaccurate payments.

Educate payment posters in denial management, including the need for registering denials and reasons for denial on the denial log. It is the responsibility of the payment poster to log these denials and alert the appropriate staff member for follow-up action.

Reason #5: Lack of security oversight on deposit procedure by management
Cause: Insufficient direct oversight of bank deposit routine by management.

Solution: Implement systems to safeguard the receiving and depositing of all monies received by the ASC. These systems include posing all monies received to patient accounts on the day received and generating posting batch reports daily. Batch report and daily deposit must balance, and the deposit should not be made to the bank until balanced. In addition, official bank deposit slips must be completed and included with collected monies. Someone other than the payment poster — preferably a member of management — should make the bank deposit.

An alternative approach is the use of a bank lockbox system with payments directly deposited to the bank. Payments are posted to patient accounts from the bank report of payments received.

Reason #6: Claim submission follow up not being performed in a timely manner
Cause: Delays in claim submission may result in non-payment because of contract requirements for timely filing. Lack of follow-up on inaccurate or non-payment of claims can result in no correction of under- or over-reimbursement or possibly no payment if not completed within contract's constraints for timely filing.

Solution: Timely filing of claims varies by contract and starts at the time of claim submission. If denials or incorrect payments are encountered by the ASC, the payer's timely filing clock does not reset and the time limits to file continue. Thus, it is important to file the claim promptly and follow up immediately on any denial or incorrect payments. If timely filing guidelines are not met, this may result in non-payment.

Reason #7: Late or no response to payment denials
Cause: Delayed response to payment denials. No performing of payment denials tracking, which may result in no identification of payer trends.

Solution: Work payment denials immediately. They require research with the payer, provider's office and/or patient. Determine cause of denial (e.g., insurance error, non-covered procedure, coding error, non-covered patient, claim error or clearinghouse error). Track the type of denials in a spreadsheet to identify trends. Non-tracked denials lead to repeated errors. Follow up on in-house denials with the involved person(s) to provide education and decrease the error rate.

Reason #8: No auditing of reimbursement cycle processes
Cause: Internal auditing only addresses financial data. Regular auditing should also focus on billing functions for accuracy, compliance and effectiveness.

Solution: Conduct internal and/or external auditing of each area affecting the revenue cycle on a regular basis. Coding, billing and collections are the hot spots to look at for accounts receivable size or age. However, you may find that other areas, such as insurance verification, registration and patient financial counseling, are also in need of improvement.

Reason #9: Auditing of accounts receivable (A/R) insufficiently diverse and not performed often enough
Cause: A/R and revenue are only addressed monthly and only standard end-of-month reporting is reviewed.

Auditing is not just about the accuracy and timeliness of revenue cycle tasks. It is also about finding and plugging uncommon areas where revenue leaks can occur. Complete auditing on an ongoing and frequent basis, not just at the conclusion of a month.

Here are three examples of where revenue can disappear that an audit may catch:

Unbilled insurance — There are several ways this can occur, including an inability to code a patient's procedure with other scheduled procedures for that date because of delayed provider dictation or tardy transcription and a lack of follow-up when necessary dictation/transcription is received. Additional causes of unbilled insurance include a failure to tally the amount of procedures for a specific date with scheduled procedures, failure of a charge poster to recheck number of claims submitted for a specific date with schedule for that date and failure to check clearinghouse claims submitted to see if claims were accepted by payer.

Solution: Generate a report tracking unbilled insurance. Compare these unbilled claims in the computer to determine reason(s). Ask questions. If all necessary information is available, submit unbilled claims immediately.

Unbilled patients — Possible reasons this occurs include failure by payment poster to switch guarantor to patient when third-party payer responsibility is complete and failure to send patient statements on a regular basis.

Solution: Generate a report tracking unbilled patients, including self-pay, promissory notes and patient balances after third-party payer responsibility is met. Compare report data to patient account information in the computer. After reconciliation of problem, send patient statements immediately.

Undetected third-party payer reimbursement errors — This usually occurs when the ASC's software program lacks third-party payer contracts loaded or the payment poster has not been provided with an insurance matrix (cheat sheet) showing the ASC's insurance contracts and reimbursement rates for common procedure codes.

Solution: Load payer contracts with reimbursement rates in the software. After completion of this task, run a "contract compliance report" (or corresponding report in the software). This report compares payments to contracted reimbursement rates for each procedure by payer. It also shows the write-off for each payment. Reviewing this information allows you to determine the accuracy of the reimbursement and if payment posters are catching errors and initiating necessary follow-up with payers. The report should also display contractual adjustments (write-offs) made for each payment. Checking adjustment data can alert you to incorrect adjustments or adjustments that have not been made and are inflating your A/R. Auditing can also alert you to unwelcome trends by specific payers.

Persistence pays (off)
As illustrated above and in part I of this two-part series, there are multiple common and uncommon revenue cycle processes that can result in critical consequences, including severe revenue losses. Maintain constant oversight to prevent revenue leaks and guarantee positive 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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