ASC Billing & Collections

ASC Billing and Collections: 3 Best Practices

ASC billing & collections can be a tricky area. Monitoring key performance indictors (KPIs) such as AR days and revenue collection trends is one way for your ambulatory surgery center (ASC) to maintain a pulse on your financial health. But monitoring and reporting will not impact results alone.

To optimize revenue and achieve long-term financial success, your center should embrace the following three best practices for billings and collections:

Accurate Coding

An ASC’s billing and collections staff needs to understand coding intricacies that are specific to the industry. If a claim is coded incorrectly, it can result in delayed payment, the need for an appeal or having to send a customer into collections. In turn, this negatively impacts both AR days and revenue. To better describe a code without changing its definition, many centers need to bill codes with modifiers. If this is not done correctly, it may not only result in a drop in revenue, but could also result in a fine if the incorrect coding goes against Medicare guidelines.

Continuing education

Technology is ever evolving so it’s imperative to provide your revenue cycle specialists with the necessary education to keep them up-to-date on the latest systems and platforms. Optimizing workflow through regular training sessions, your center’s billing and collections staff will gain efficiencies and KPIs will improve.

Monitoring AR days more frequently

One of the most important KPIs for an ASC is AR days. Accounts receivable are often reviewed on a monthly basis, but checking them more frequently can create a proactive culture to Help identify issues in a timely manner. Early detection is a core element in the continuous improvement process.

Why Hospitals Shouldn't Handle Revenue Cycle Management

Top 4 reasons hospitals shouldn’t handle revenue cycle for their ASCs

While an ambulatory surgery center (ASC) can be independently owned, managed through a management company or managed by a hospital, it is usually best for revenue cycle management (RCM) to be handled internally by the ASC or an outsourced partner. Hospitals are oftentimes looking for ways to reduce costs of operating an ASC, which could include incorporating the ASC’s RCM with the hospital’s RCM operations. However, there are many reasons why a hospital is not equipped to successfully handle revenue cycle for their ASCs.

Here are the top 4 reasons hospitals should not handle RCM for their ASCs:

1. Management information system

The management information system (MIS) is the system used to bill and collect. However, a hospital’s MIS is  not ASC-specific and therefore not configured to work well in an ASC environment. Since most MIS systems are incompatible, the hospital may need to spend additional time and resources on interfaces between the hospital system, the ASC system and peripheral applications in order to exchange vital information.

The hospital’s MIS may also not be set up to bill for a surgery center. Standard hospital systems are typically setup to bill on the UB-04 claim forms, while ASCs need to be able to bill on both the UB-04 and CMS-1500 claim forms. Additionally, hospitals may not be able to load ASC payer contracts into the system or report on ASC-specific key performance indicator (KPI) metrics that ASC leadership must monitor, such as revenue per case.

2. Billing Staff

A hospital’s billing and collections staff may not have the expertise and experience needed to understand the specifics of billing for an ASC. For example, centers often have to bill CPT codes with modifiers which help further describe a code without changing its definition.  One prime example is multi-level pain injections, which CMS only pays on a primary code and bundles subsequent codes. It’s not only a mistake to bill out bundled codes separately, but against Medicare guidelines, so the center could be fined.

 3. Attrition

Hospitals typically have very large, complex billing departments. Along those lines, a hospital’s business office staff may only have general hospital experience and not ASC-specific knowledge and expertise needed to understand the various best practices of ASC revenue cycle. Due to their size, hospitals often see a higher turnover rate with the business office employees, which may not provide the continuity needed in the smaller, ASC environment.

4. Problematic AR days

Hospitals often have higher days outstanding than ASCs. While hospitals typically hover in the 40 to 50 day range, better performing ASCs achieve less than 30 days outstanding. When a hospital is billing for both itself and an ASC, it many not devote the necessary time and resources to both. Since the hospital charges and subsequent reimbursement is substantially higher than the ASC, the hospital may be more attentive on collecting the larger amounts  as opposed to the smaller payments coming out of the ASC.  The hospital may therefore go after the ASC “low-hanging fruit” , allowing AR days to increase and collection rate trends to decline, putting a major strain on the financial health of the ASC.

An optimized revenue cycle management strategy is imperative to the financial health of an ASC. Oftentimes, the ASC and its stakeholders can benefit greatly by handling billing and collections internally or transitioning to an outsourced RCM provider.

Meet the Team | Lorena Gonzalez

In our ongoing Meet the Team feature, we introduce the many members of our team who make Regent RCM so successful. Today we’ll find out more about:

Name: Lorena Gonzalez

Hometown: Chicago, Illinois

What do you do at Regent RCM? I am a revenue cycle specialist. I handle all of the billing, payment posting and collections for a center in Colorado.

How long have you been working at Regent RCM? I have been working at Regent RCM since February 2015.

What is your favorite part about working here? It is both a professional and friendly environment.

What has been your greatest professional achievement? My greatest professional achievement is having more than 15 years of experience in the healthcare industry.

What is one fun fact about yourself your co-workers don’t know? I love to travel, and the beach is definitely my favorite place to be.

ASC ICD-10 Preparation

Top 4 tips to quicken your ASC’s ICD-10 preparation

The implementation of ICD-10 is set for October 1, 2015, and though it’s been delayed previously, this new deadline is set to hold. This means that your ambulatory surgery center should be taking the necessary steps to prepare to use 10th addition of the International Classification of Diseases by the World Health Organization (WHO).

We recently debunked some common myths surrounding the updated coding system, and if you haven’t already, it’s now the time to turn your focus on ensuring that your ASC is completely ready for the transition. With less than 100 days until October 1, use these tips to optimize your time as you prepare for ICD-10 to ensure your center is ready. And remember, improper preparation can have negative impact on key performance indicator (KPI) metrics such as AR days and revenue.

Focus on small-scale successes

With the deadline fast approaching, gradual improvements are no longer an option. Instead your center should shift its focus to repeated small-scale successes in order to produce outcomes in a tangible process.

Change the perception

Many of your staff members may view ICD-10 as an unnecessary complication. Changing their perception of the coding system by hosting meetings regularly to review the new codes will make business office employees feel more comfortable and confident, making the system easier to adopt when the time comes. You can also have your staff use online tools to look up, verify and validate codes, which will reduce incorrect codes from being input.

Cut down meeting times

Instead of a more traditional approach to planning and preparation, you should now think outside the box with a different structure for project management. Instead of lengthy status meetings once a month, plan on shorter daily or weekly meetings to keep your revenue cycle specialists on track with their progress.

Assess your internal capabilities

Some centers may have a solid business office in house who can sufficiently handle the transition to ICD-10 without a negative impact on KPIs. It’s important to assess whether or not your internal revenue cycle specialists can manage the implementation. If the answer is no or you are not sure, you might want to consider transitioning to outsourced revenue cycle management services with an external provider that is fully prepared.

Revenue Cycle Analysis

Case study: Undergoing the transition to outsourced RCM services

In 2012, a West Coast multispecialty ambulatory surgery center began working with Regent Surgical Health to manage and take minority equity in the center, but they chose to keep billing and collections in-house. However, the center was experiencing financial unhealthiness with key performance indicator (KPIs) metrics moving in the wrong direction, specifically high AR days and low net revenue.

In February 2013, the center realized its struggle with cash, revenue per case and proper business office staffing could not be righted internally so they made the decision to transition to outsourced revenue cycle management. They selected Regent RCM, an independent division of Regent Surgical Health, for a one-year contract to help turnaround their revenue cycle operations. During the contract period, Regent RCM was able to significantly reduce the center’s AR while increasing cash and net revenue.

Challenges of bringing RCM back in house

Once the center was financially healthy and back on track, administration opted to bring billing and collections back in-house by hiring a local revenue cycle specialist. Ultimately, the center was unable to handle the full extent of revenue cycle management on its own, and the KPI metrics almost immediately began to move in the wrong direction – revenue dropped while AR days were back on the rise.

Recognizing the need to permanently transition to outsourced RCM services

In February 2015, Regent RCM was brought back into the fold to investigate what went wrong and what steps could be taken to correct the issues. Regent RCM performed a business office audit and discovered that there was virtually no claim follow up. The center has never performed its own internal audits so they were somewhat surprised to learn that this was the case. Without the necessary training, experience and expertise, payer short pays and/or denials were not being appealed and follow-up either wasn’t happening or not following best practices, which ultimately left money on the table.

Benefits of working with an external RCM provider

When the center transitioned back to working with Regent RCM, the same revenue cycle specialist they had worked with previously was assigned. As a bilingual, seasoned specialist with experience working with this center, the Regent RCM specialist was a logical and natural fit to jump back into the position she formerly held.  Additionally, the Regent RCM revenue cycle specialist had a strong understanding of payers, contracts and California law likely to impact the center’s revenue cycle. Specially, she had significant experience working with Blue Cross and Blue Shield in California as well as California MediCal.

The transition back to outsourced RCM was smooth given Regent RCM familiarity of the nuances of the center. The center’s management information system (MIS) was cloud-based so Regent RCM was able to gain access seamlessly. Additionally, there was an accessible coding system in place, which allowed Regent RCM to receive timely notifications so the specialist can send out bills in a timely manner.

Since taking back over, Regent RCM has regularly scheduled internal audits to ensure timely and complete claim follow up, claims are billed appropriately and their revenue cycle specialist uses reporting and analytics tools that allow for customized reports to track progress.

Regent RCM has once again been able to drop AR days  – from 43 to 33 over the course of just two months! During this period, cash collections have also increased by 47 percent from $366,000 to $538,000 monthly.

Questions About Revenue Cycle Management

Questions to ask if you’re considering outsourcing RCM

We’ve recently explored the transition process from internal billing and collections to outsourced revenue cycle management services. If your center is having issues impacting its financial health, you’re experiencing negative KPIs such as increased AR days and decreased revenue and you don’t have the time and resources to address these pain points, then it might be time to consider working with an external RCM provider. Understanding you most likely have concerns about this transition, it’s important to ask questions in order to get a better understanding of how the transition process works.

What are your areas of expertise?

First and foremost, seek to understand in what areas the external provider excels. Often, it’s a good idea to let an external provider handle all of the back end business office needs from managing payer care contracts to improving AR days, so you want to make sure they are an expert in all parts of billing and collections. You’ll also want to ask detailed follow up questions to ensure the organization’s knowledge and experience align with your needs to optimize the revenue cycle.

Can you describe and demonstrate the technology that you use?

These days it seems like technology advances at the speed of light, so it’s important that your external service provider have a solid understanding of the software and platforms they use. Being tech savvy is now a requirement for successful revenue cycle specialists, and it’s highly recommended that the billing and collections staff undergo regular training to ensure they are up to date on the latest technologies.

What is your hiring process?

To add to the previous question, it’s useful to learn about the outsourced RCM providers hiring process for their billing and collections staff. Regent RCM, for example, takes a well-rounded approach to hiring new employees. Candidates are required to complete a skills assessment in addition to undergoing an interview with the hiring team. Knowing that candidates are fully vetted to ensure they have the necessary experience, knowledge and personality will make any transition process significantly smoother.

Do you leverage reporting and analytics?

In order to measure progress, reporting and analytics tools are essential. Even more effective is a provider with real time management console capabilities that allows them to monitor KPIs against both industry standards and their own benchmarks. Because such a dashboard operates in real time, the revenue cycle specialist can instantly see when a problem arises and begin taking the necessary steps to find a solution.

Billing and collections analysis

Addressing concerns about transitioning to outsourced RCM services

Last week, we discussed concerns you might experience as you consider transitioning from internal revenue cycle management to outsourced RCM services. Now we’ll address some of the most pressing concerns that you may be facing.

Decreased revenue

One of the most prominent concerns is that the transition process may lead to decreased revenue. Importantly, choosing to outsource RCM not only adds consistency and predictability, it offers the ability to increase monthly revenue. An external provider, such as Regent RCM, reviews and takes the time to understand all of your center’s payer contracts as the foundation for success. Once the initial review is complete, a targeted assessment is done, and any outstanding payments are collected.

The external provider also looks at past reimbursements per each contact, and if money has been left on the table, they will help you recoup the lost revenue for your center. For example, if your ASC was owed a $1,000 reimbursement but you were only paid $800, the external provider will help you get that lost money. Whenever possible, they will renegotiate a better rate and increase revenue per case.

The outsourced RCM provider will also examine your out-of-network revenue. In cases where negotiations have not been pursued, pursuit of available monies becomes paramount to bring in money left on the table in these situations as well.

It requires the diligence of a dedicated team who has the time and resources to focus on optimizing and increasing revenue coming into your center. Additionally, a provider like Regent RCM has the proper process and workflow in place to make the transition to outsourcing an effective one and ultimately bring more revenue into your ASC.

Supporting staff

The other major concern with the transition process relates to staffing, whether it’s supporting current internal business office staff members or wondering what to do when there is a billing and collections gap.

Centers that have long-term employees don’t have to let them go just because you choose to outsource. If you have good people working in your ASC, they can simply be redeployed within the center to fulfill the front end of the business office or to take on roles that also match their skillsets. Transitioning to outsourced RCM services take the complex billing and collections piece off the table, allowing the internal staff to focus on core priorities and optimize the center as a whole.

In situations where an internal role is left unfulfilled because of high turnover or a senior billing a collections staff member retires, an external RCM provider can help maintain continuity to keep the business office running. External RCM providers offer contingency plans that allow you to engage in succession planning. You won’t have to ask yourself what will happen down the road, and how you’ll stay ahead of it to avoid a revenue drop. At the end of the day, you need planning and strategies in place because predictability keeps the process running smoothly.

Next up, we’ll provide a real-world example using a case study that details the transition process and the success an ASC can find by outsourcing RCM services.

Regent RCM

Regent RCM offers contribution to four essential thoughts on revenue cycle management

Regent RCM Director Michael Orseno recently spoke to Becker’s ASC Review to provide insight on four of the core thoughts when it comes to evaluating the business side of an ASC and improving revenue cycle management strategies:

Ambulatory surgery centers are power houses when it comes to clinical quality. From excellent patient outcomes to nearly nonexistent infection rates, ASCs excel, but does the business office side perform nearly as well?

Here are four core thoughts on evaluating and improving ASC revenue cycle management strategies.

1. The warning signs. Revenue cycle management is a complex process that touches every aspect of an ASC’s operations, but there are number of apparent red flags that indicate the current strategy needs to be reevaluated. “A few warning signs that warrant further investigation include: a decrease in your revenue,increase in A/R days, an increase in upfront denials and contract variances,” says April Sackos, vice president of revenue cycle management with Meridian Surgical Partners. High staff turnover can also indicate management issues.

2. Common stumbling blocks. ASCs do not have the resources of a hospital or health system; controlling all revenue cycle management processes with limited staff and resources is much akin to a delicate juggling act. Many surgery centers struggle with similar issues. Common stumbling blocks, according to Michael Orseno, director of Regent Revenue Cycle Management, include:

•    Lack of necessary or quality IT
•    Inappropriate management information system
•    Shortage of useful reporting
•    Dearth of knowledgeable staff

3. Key ways to improve. Despite these obstacles, surgery centers can improve and master revenue cycle management. “Make sure you have internal monitoring and benchmark key performance indicators,” says Ms. Sackos. “[Consider] Automating benefit verification, payment posting, insurance follow-up and payment plan monitoring, to name a few.”

New processes and consistent monitoring can go a long way to revamp an ASC’s approach, but any of these changes are difficult to achieve with the wrong staff. Regent RCM has developed assessments for both staff- and management-level business office candidates. These assessments are designed to test practical knowledge and identify candidates who will excel in an ASC environment. Consider integrating such an assessment into your surgery center’s business office hiring process. “If your ASC’s area has a shallow talent pool, outsourcing is always an option,” says Mr. Orseno.

4. In-house vs. outsourcing. In-house and outsourced revenue cycle strategiescome with a set of unique challenges. “In-house challenges typically stem from finding and retaining the right staff with the knowledge, and expertise required to successfully manage the revenue cycle functions,” says Ms. Sackos.

On the other hand, completely outsourcing presents a communication challenge. If there is a simple question or a larger issue, it isn’t simply an issue of walking down the hall to the business office. Outsourcing also makes it easier to lose touch with financial data and revenue cycle processes. “ASC leaders may not invest time to find a problem; they may just blame the vendor,” says Mr. Orseno. “The consequence of which they unfamiliar with their own data.”

“Regardless of whether you outsource or perform all functions in-house, it is a team approach,” says Ms. Sackos.

To read for full story in Becker’s ASC Review, click here.

concerns about transition to outsourced RCM

Top concerns about the transition to outsourced RCM

Changes in certain key performance indicators (KPIs), such as increased AR days and decreased revenue, may be negatively impacting your revenue cycle and your ambulatory surgery center’s bottom line. Recognizing the signs that your center may not be financially healthy can help you to take the necessary steps to correct the problems. After examining the situation, you may find that you cannot solve the RCM issues internally and that it’s time to consider outsourcing revenue cycle management.

As you consider working with an external provider, concerns may arise about the transition process. There are two main concerns we frequently come across:

Revenue

One of the biggest concerns that the transition creates the risk of a short term loss of revenue due to the inherent moving parts of the transition itself. Because of this, you might be concerned that revenue will fall short in a specific month.

Staffing

Another major concern is about staffing, which is twofold. You want to support current employees, but you recognize that your center may be experiencing revenue cycle issues because you don’t have the right staff members in the right roles. Additionally, if an integral employee retires, or your center is experiencing a high turnover rate, you may not have the resources to fill these necessary roles in a long-term capacity. Considering transitioning to an external RCM provider may leave you wondering what the future of your center may look like.

We understand that change can be challenging, and even though you recognize that your center could benefit from the transition to outsourced RCM, these concerns may serious hesitation in taking that first step.

Stay tuned for upcoming posts when we address these concerns and look at a case study detailing a successful transition to outsourced RCM services.

Becker's ASC Review Conference

Regent RCM’s recap of the Becker’s ASC conference

Last week, Regent RCM’s leadership team headed to Chicago, Ill., to the Becker’s 13th Annual Spine, Orthopedic and Pain Management-Driven ASC Conference & the Future of the Spine.

The Becker’s conference was a great opportunity for Regent RCM’s Director, Michael Orseno and Director of Business Development, Ed Tschan to network with other industry professionals and provide useful insight on how the benefits of outsourcing RCM can have positive long-term effects on a center’s financial health. Steve Taylor from ASCInsight was also on site to provide demonstrations of a real-time dashboard that monitors KPIs and assists with reporting and analytics.

There were certainly some conversational themes our team has noticed throughout the conference. Some of the key discussion points included:

  • Managed care contracting
  • Coding audits
  • How Regent RCM sets itself apart in the marketplace
  • Short-term revenue cycle needs and the flexibility and integrity needed to satisfy these needs
  • Constraints within an ASC that lead to a need for outsourced RCM, especially with AR days that are greater than 90 days

Becker’s proved to be a success for the Regent RCM team as we were able to provide valuable insight into how outsourcing RCM might be the right decision for your ASC’s billing and collections needs and the importance of reporting and analytics to your center’s financial health.

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