Managing Days in AR

Revenue Cycle Challenge #1: Managing Days in AR

For your ambulatory surgery center (ASC) to operate efficiently, you need to prioritize revenue cycle management and identity and address any problems that are affecting your billing, collections, or cash flow.

Regent RCM helps ASCs nationwide find solutions to revenue cycle challenges. We provide billing and collection services that outperform industry benchmarks and allow you to focus on your most important responsibilities. In a new content series, we will outline some of the most common revenue cycle challenges and how to navigate them.

Revenue Cycle Challenge #1: Managing Days in AR

Days in AR is a metric that offers a lot of information about your ASC’s financial health at a glance. The industry standard is that days in AR should not exceed 30% but Recent RCM’s gold standard is keeping days in AR over 90 below 25% and making sure AR follow-up includes 95% of claims per month.

Steps to Improve Days in AR

If you want to improve your center’s days in AR, you can start by taking these actions:

  • Do a quality audit

Review your billing and collections processes, looking for any gaps in your revenue cycle. How quickly are you billing claims after the date of service? Is your center receiving a high volume of claims denials? Are claims appeals sent quickly (within 24 hours)? Who is responsible for following up on outstanding claims? Can you identify a need for additional staffing or training?

  • Focus on financial counseling and up-front collections

Patients can be responsible for as much as 30% of payments, and up-front collections are a major factor in days in AR. If patients are unaware of their financial responsibility or unprepared to provide copayment, deductible, or co-insurance amounts, you will likely see negative effects in your AR over 90 days.

Incorporate patient education and financial counseling into your revenue cycle management, and establish a clear up-front collections process. Do patients know what they will owe before they come in for a procedure? Do they have a payment plan? Talk to patients in advance, offering financial counseling and outlining up-front collections expectations to decrease days in AR. We have seen this step make a big difference in improving collections and financial health for ASCs we work with.

Read about two of Regent RCM’s ASC success stories from 2020.

How to Improve KPIs in Your ASC

How healthy is your ambulatory surgery center’s (ASC’s) revenue cycle? Do you have a general sense of your center’s profits and cash flow – or can you point to real data and analytics?

To develop a clear picture of your revenue cycle performance, you need to gather the right information. Tracking and analyzing key performance indicators (KPIs) gives your ASC powerful tools to pinpoint positive and negative trends, address problems, and make data-driven improvements. Implement benchmarks to set a baseline, marking where you are starting from, where you are heading, and what process changes you need to make to reach your goals.

Here are three important KPIs to focus on to make significant improvements in your revenue cycle.

Accounts Receivable (A/R)

Investigate how many outstanding accounts you have and how many are more than 90 days old. If the percentage is too high, your center may not have an efficient process for following up on claims. If it’s too low, you may be writing off balances before receiving the full amount due. Establish systems for tracking A/R on a certain schedule, setting up alerts to remind staff to follow up on claims after a set number of days. Pay attention to patterns that show up across denials, and educate your staff about common errors to avoid in new claims.

Charge Lag

Measure how long it takes, on average, to enter new charges for billing. Set a benchmark for this action, ideally within 24 to 48 hours of the date of service. If you notice a longer charge lag, look for factors that may have contributed to the delay. Are there problems with dictation, coding, or invoicing? What can you do to remove these obstacles?

Clean Claims

Calculate the percentage of clean claims your ASC sends out each month. How many contain errors or missing documentation that lead to denials? Have you noticed trends with certain payers? A high clean claims rate is correlated with a low denial rate and timely payment. Identify and document the reasons claims are being denied, and make adjustments to your processes so you can send complete and correct information to payers the first time.

Interested in improving your revenue cycle management? Contact Regent RCM’s expert team.

2020 Highlights: A Year of Growth & Continuous Improvement

In a year of unforeseen challenges, our team at Regent RCM is proud of our collective achievements — both within our company and in partnership with our ASC clients.

As we get ready to wrap up 2020 and look ahead to a new year, Erin Petrie, Regent RCM Vice President , shares her thoughts on this year’s highlights and what she is excited about in 2021.

“We accomplished a lot that I think is pretty amazing for the year,” said Petrie. “Obviously, we faced a number of challenges with COVID, but we actually improved our metrics or held them at the same level from the previous year. Our A/R percentage over 90 days decreased by four points, our A/R follow-up improved 3%, and our cash remained about the same. I’m very excited about the staff’s ability to do that.”

Moving to Remote Work

Regent RCM’s staff had never worked from home before, and with very little notice, we closed our office and became a fully remote company during the pandemic. We had to find solutions for a few logistical hiccups, such as moving PCs to home offices and setting up VOIP phone lines, but our team quickly adjusted.

“We didn’t have a lot of time to plan what a fully remote staff would look like,” said Petrie. “I was confident that we could do it, but I was surprised by just how well we did under the circumstances. Everyone was juggling a lot of priorities — like parents working and doing e-learning with their kids. We spent a lot of one-on-one time with our staff, helping them prioritize things and work out a time management plan that made sense for them.”

Making Time for the Wish List 

One silver lining of the pandemic was that while new case volume slowed down for ASC centers, our staff put the unexpected downtime to good use. We pursued projects that will improve the service we offer our clients, including gathering extensive information about our centers and different payer policies, so we have a robust database of information to draw from in the future.

“We spent a lot of time working on our wish list projects,” said Petrie. “We worked on a good deal of standardization — for example, creating “best appeal” templates so that a higher percentage of first-level appeals are successful, and second-level appeals aren’t necessary. We also put together a thorough training plan for the staff that has reduced training time from three or four months to three weeks. We’ve seen that plan be very successful.”

Carrying Lessons Forward into 2021

Regent RCM’s priority moving into 2021 is determining how we can continue to serve our centers better. We have identified that there’s a need for ongoing training and support, and we are exploring new ways to develop best practices, learn from one another, and share experiences across all of our centers.

“Our focus is on continuous improvement,” said Petrie. “We’ve increased our staff’s quarterly metrics, raising our targets for things like percentage over 90, A/R follow-up, and quality audits. We want to keep raising the bar, and we look forward to 2021 as another opportunity to build stronger partnerships with our centers.”

Read about two of our ASC success stories from 2020.

2020 Greatest Hits: Rising Above Challenging Times

As 2020 proved to be challenging, the team at Regent Revenue Cycle Management (Regent RCM) helped its clients stay focused on revenue cycle even during the shutdown. It is clear that managing growth and profitability is a key challenge continuing to face Ambulatory Surgery Centers (ASCs) and their leaders. Following are links to the articles that proved to be this year’s greatest hits.

Making the Most of Downtime in order to Reopen Stronger Than Ever

During the height of the COVID-19 crisis, ASCs paused non-essential procedures in order to preserve resources for hospitals that were treating an influx of sick patients. In turn, this left ASCs with a reduced or nonexistent case volume. Regent RCM provided suggestions on how to use the downtime to be ready to ramp back up as quickly and efficiently as possible: Payers & Payer Contracts, Continuing to Work A/R, and Conduct a Self-Audit. Click here to learn more.

White Paper: Proactive Cash Flow Management

This year was made more challenging with slower reimbursement from payers, which created cash flow issues for some centers. As centers ramped back up to 80-90% of total cases, proactive revenue cycle management and cash flow became more important than ever before.

Regent RCM Vice President Erin Petrie said, “ASCs want to collect everything they have available, and that means paying close attention to two buckets in particular. We look at all aging accounts receivable and on any new cases, we work with centers to maximize what they are collecting upfront from patients.”

Download the white paper and read two center case studies that highlight the effectiveness of a renewed focus on optimizing cash flow and managing revenue cycle.

5 Ways to Optimize Your ASC’s Revenue Cycle

As ASCs continue to navigate ongoing challenges such as rising healthcare costs and complex insurance environments, it is critical that you take a more proactive approach to managing your center’s profitability and cash flow. We shared five strategies to optimize your ASC’s revenue cycle management:

  • Triple-check insurance eligibility
  • Communicate with your billing and coding team
  • Monitor your AR
  • Capture all charges
  • Measure key numbers

When you improve your billing and collections processes, you get paid quickly and accurately, strengthening the overall financial health of your center. Read more here.

Learn more about optimizing your center’s revenue cycle management by visiting the Regent RCM News & Insights page.

Upfront Collections: Lessons Learned at Glasgow Medical Center

COVID-19 has made running an ASC even more challenging with slower reimbursement from payers, which has created cash flow issues for some centers. Regent Revenue Cycle Management is working closely with its ASC partners to help them collect as much of their revenue as possible during this challenging time.

At Glasgow Medical Center, efforts paid off in notable achievements for the month of May with total dollars outstanding over 90 days decreased by $31K compared to the previous month and was the center’s lowest amount in that category since 2016, said Regent RCM Revenue Cycle Manager Vianca Bautista. This accomplishment was one to celebrate, given that the majority of outstanding dollars in the aging bucket were patient self-pay, one of the toughest categories to collect at the backend.

Year-over-year, Glasgow’s results on upfront collections looked great, too, with percentage of due collected improving from 11% in 2019 to 40% in 2020. And, financial counseling accounted for 43% of upfront collections in 2019, compared to 100% in 2020.

“It makes a significant difference when patients are aware of what they will owe when they check in,” said Regent RCM Manager, Leslie Favela. “Before we defined our process around upfront financial counseling and upfront collections, patients would check in, have their surgery, and afterwards in the billing notes, it would say, ‘Couldn’t collect because patient was not aware of balance.’ Now the patients are coming in either with a plan or with payment. They are already educated, and that eases patients’ minds as well.”

So far in 2020, Glasgow achieved 155% of its cash goal, and saw a significant 17% decrease in AR days over 90, and had average AR Follow Up over the last three months of 99%.

“While payers have incurred new costs due to the pandemic, they have also realized savings that balance those,” said Alex Reyes, Vice Presidents of Operations for Glasgow. “The decrease in elective surgery cases has resulted in savings for health plans. And with cases lower, there is now a more dedicated effort to get claims processed correctly and efficiently.”

In addition, at Glasgow, according to Favela, the upfront collections process was adjusted this year to utilize patient phone calls instead of letters to communicate with patients about upfront collections. “I think that helps increase the number patients actually paying upfront. We make contact directly with them, versus relying on a letter in the mail.”

Download our white paper to learn more.

5 Ways to Optimize Your ASC’s Revenue Cycle

As your ambulatory surgery center (ASC) navigates ongoing challenges, such as rising healthcare costs and complex insurance environments, it is critical that you take a more proactive approach to managing your center’s profitability and cash flow. When you improve your billing and collections processes, you get paid quickly and accurately, strengthening the overall financial health of your center.

Follow these five strategies to optimize your ASC’s revenue cycle management.

  1. Triple-check insurance eligibility

Collect patients’ current insurance information to prevent billing errors and denials. Have front desk staff update pertinent data in your records, including:

  • Insurance company, phone number, and claims address
  • Patient’s name and date of birth
  • If different, the name and date of birth of the primary plan holder (and their relationship to the patient)
  • Policy and group ID numbers
  • Dates covered by the policy

It’s a good practice to ask patients for a copy of their insurance card at each visit, even if they say they have the same plan. Triple-check the information you have on file against the card before sending a claim.

  1. Communicate with your billing and coding team

Whether you have an in-house team or you outsource to a partner, it’s important to have full transparency into your center’s billing and coding workflow. How quickly are claims billed out and followed up on? When claims are denied, how fast are appeals sent? Look for inefficiencies or communications gaps in the billing process that you can address.

  1. Monitor your AR

Monitoring the % over 90 days is key for a healthy revenue cycle and will identify trends and issues. Are you experiencing payment delays or denials because of missing documentation or incorrect insurance information? Do you have an up-front collections process in place? Set A/R benchmarks for your ASC; for Regent RCM clients, our gold standard is below 25% for A/R over 90 days.

  1. Capture all charges

Record all charges for every patient encounter. Centers sometimes under-code patient services because staff don’t receive all of the necessary information or are worried about potential audits. But faulty capture processes are problematic and can lead to significant revenue losses for your ASC. Outline a comprehensive checklist for documenting charges so your team can bill accurately.

  1. Measure key numbers

Identifying shortcomings in your billing and collections systems is an important first step. But to optimize your revenue cycle, you need to implement new processes that measure key numbers and set ongoing goals. What statistics will help you evaluate progress and keep you on track toward your objectives? Look at metrics such as the number of claims that are denied each month, the percentage of patients who pay their balance, and AR % over 90 days. Make small, incremental changes to try to improve each of these key metrics.

Click here for access to two case studies where two partner centers followed best practices and improved collections compared year-over-year.

Strategic Approach to Upfront Financial Counseling Proves Success at East Hills Surgery Center

COVID-19 has created cash flow issues for most ASCs due to decreased volume and slower reimbursement. In response, we are working closely with our centers to ensure they are collecting as much of their revenue as possible during this time. And our approach is paying off.

At East Hills Surgery Center, a focused approach to upfront collections has been key to improving revenue cycle management and has resulted in significant improvements, even when New York state had more coronavirus cases than any single country outside the US, in April. Percentage of due collected improved from 16% in 2019 to 36% in 2020, and financial counseling accounted for 36% of upfront collections in 2019, compared to 99% in 2020.

“Basically, it all comes down to having the correct processes in place,” explains Leslie Favela, Regent RCM’s manager of revenue cycle business development. “It’s about making sure that we’re reviewing every single case and ensuring that we’re making the best decisions for the center and the patient.”

Attention to correct processes and disciplined focus have delivered very strong revenue cycle management statistics for East Hills over the past months: The center achieved 149% of its cash goal, and saw a significant decrease in AR days over 90 on the strength of an average for AR follow up over the last three months of 99%.

Favela attributes the success at East Hills to having dedicated staff focused on collections, and a strategic approach to upfront financial counseling.

“Often we find that centers are kind of open-ended on what they’re asking patients to pay upfront,” she says. “We always start with the highest estimate, and then work from there. I think that the centers tend to reduce it right away without explaining the potentially highest amount to the patient. So we start high and then give wiggle room, rather than starting in between and later having to lower it from there. We find then that another result of increasing upfront collections is a drop in AR, so we have less bad debt to write off, and fewer receivables moving into the aging buckets.”

“East Hills reached their cash collection goal,” Favela continued. “The team has been diligent on working on the AR, and then we took advantage of a slower business period to make sure that we touched all accounts to bring in the most money. This has been an effective formula.”

Learn more in our white paper, Proactive Cash Flow Management. Download your copy now.

negotiations

Fact-Based Payer Contract Negotiations Key as ASCs Reopen

A side effect of COVID-19, disrupted contract updates between health insurance payers and ambulatory surgery centers (ASCs) have created a new normal for negotiations. For ASCs, leveraging a thorough understanding of the pandemic business realities for both payers and providers is more critical than ever as the industry recovers.

“Payer resources have been intently focused on their provider networks capacity to manage COVID — whether it was ensuring enough beds or ventilators, teleconference access, physicians’ capabilities, or testing,” says Andrea Woodell, Vice President of Managed Care at Regent RCM. “The virus caused a seismic shift in the payers’ focus. Naturally, we lost momentum in our ASC contract negotiations. Now, 12-16 weeks into it, we’re picking up the discussions again.”

As contract talks resume, Woodell shares observations to keep ASCs’ negotiations focused on the facts:

  1. Costs, But Also Savings: While payers have incurred some new costs due to the pandemic, they also have realized savings that balance out those costs. “The decline in elective cases has resulted in substantial savings for health plans. As a negotiator, we should incorporate the savings which offset new COVID expenses,” Woodell says.
  2. Shifting Payer Mix:COVID-19 has forced a change in payer mix that should be addressed in negotiations. Says Woodell: “Because of COVID, there are 40 million people unemployed now. We’re going to see a spike in uninsured, an increase in Exchange coverage, an increase in Medicaid, and especially in metropolitan areas, we’ll see some commercial coverage migrating from PPO and HMO plans to a lower-paying Exchange product. The impact of these payer mix changes, if not offset during negotiations, would decrease ASC reimbursement for surgeries.”
  3. A Better Site of Care: Woodell says the benefits of moving procedures to the ASC setting have never been clearer. ASCs afford Medicare patients 55% savings over the same procedure at a hospital. And, with hospital space and priorities stretched by COVID, the advantages of a separate location for elective surgeries become even more important and valuable. “I think it’s important to include in negotiations what the spend would be on their managed Medicare product for an HOPD setting versus your ASC setting,” she explains. “Use that. If I have both a managed Medicare product and a commercial product with a certain payer, I quantify the amount saved by moving the case to an ASC versus HOPD setting. We know the Medicare population does not want to go to the hospital right now, and they are unlikely to go there due to COVID. A shift in site of service is great for the payers, but often leaves the ASC unprofitable. My goal is to demonstrate the saving on their managed Medicare lives and shift some of that savings to the commercial cases It is a fair and logical discussion to support long-term success of both the ASCs and the health plans”

Finally, Woodell predicts ASCs will see a quick uptick in volume as things reopen, followed by a plateau or decline as the industry satisfies demand that was put on hold. “The volume will come, but it’s going to come back slowly. In terms of reimbursement and payer contract negotiations short term, if we push the money will be there. ASCs’ value should be recognized and rewarded.”

For more information on managing ASC payer contracts, contact Woodell here.

improved collections cash flow management

New White Paper: Proactive Cash Flow Management

Ambulatory surgery centers (ASCs) have been severely impacted by the COVID-19 pandemic and experienced a significant decrease in volume, especially after some states postponed elective procedures and imposed stay-at-home orders to decrease possible transmission.

The current environment has been made more challenging with slower reimbursement from payers, which has created cash flow issues for some centers. As centers are back up to 80-90% of total cases, proactive revenue cycle management and cash flow is more important than ever before.

The team at Regent RCM is working closely with its ASC partners to help them collect as much of their revenue as possible during this challenging time.

“ASCs want to collect everything they have available, and that means paying close attention to two buckets in particular,” said Erin Petrie, Regent RCM Vice President. “We look at all aging accounts receivable and on any new cases, we work with centers to maximize what they are collecting upfront from patients.”

A new white paper, Proactive Cash Flow Management: Two Case Studies Highlight How Centers in New York and Delaware Improved Collections in Spite of the Pandemic, explores two instances where the effectiveness of a renewed focus on optimizing cash flow and managing revenue cycle has paid off for two ASCs in particular.

Download our white paper here and please contact us for any revenue cycle needs you may have.

revenue cycle leaks

Tracking Key Reports Helps Repair Revenue Cycle Leaks

Successfully managing ambulatory surgery center (ASC) profitability and cash flow means keeping a tight rein on your center’s revenue cycle. One way many ASCs do this is by carefully tracking against Regent’s revenue cycle management (RCM) benchmarks. But when a potential revenue cycle leak is suspected, a deeper look at three key reports offers problem-solving insights.

“When it comes to revenue cycle leaks, there are three reports in particular that will give you enough insight to be able to tackle most any issue you see. Obviously, you’re looking into this for a reason: maybe it’s because your cash flow is slowing down, or maybe your percent (of Accounts Receivable) over 90 days is picking up,” says Regent RCM Vice President Erin Petrie. “Starting with these reports will give you an opportunity to narrow the scope of what you’re looking for, so you don’t have to go through and look at every single account. It highlights target areas.”

The three leak-sealing reports Petrie recommends are Aging AR by Payer, your ASC’s Unbilled Case Log, and your Denials Report. She explains the power of each:

Aging AR by Payer

While Aging AR is a routine benchmark report, digging into Aging AR data by Payer can be an efficient way to identify trends and potential problems when you suspect a revenue cycle leak.

“If all of a sudden you notice that your Blue Cross 120 bucket just got huge because everything’s rolling over from 90, you can tell that there’s probably an issue with that payer versus if you look at the summary AR report and see that all of the 120 buckets – regardless of payer – are starting to pick up,” says Petrie.

She explains that an uptick in the 120 Days AR bucket across the board may indicate a problem with the biller not following up or sending claims out incorrectly in the first place, whereas if you see that it’s just one payer or a couple payers specifically, that is likely a payer related issue. “If it’s a payer issue, you would then dig into that particular payer’s accounts to see what the notes are on those accounts so you can solve for whatever is going on.”

Unbilled Case Log 

If your look at the Aging AR reports has determined that the problem is more of an across the board performance issue, Petrie recommends a second key report:

“By taking a look at your unbilled case log, you can see if you have a spike in cases that weren’t dictated by physicians or weren’t billed because they’re waiting for an implant invoice or something,” she says. “Obviously you’re not billing those cases without that information, but the date of service remains the same. That means when you do bill them, all of a sudden, those cases are going to drop directly into your 90 bucket instead of your 0 bucket. So that unbilled cases log is a good one to monitor. You don’t want to see wild swings where all of a sudden one month you have like a quarter of your case volume that’s just not dictated.”

Denials Report 

The third report Petrie recommends to ASCs seeking to plug revenue cycle leaks tracks reimbursement denials, offering a view into why payment may be held up.

“The payers tend to change things in midstream,” Petrie explains. “For example, maybe all of a sudden Blue Cross will start requiring a prior authorization when they hadn’t before, so now you’ll see all of these ‘prior auth’ denials and you’ll have to go back in to solve for that, and also figure out how to avoid those going forward.”

Petrie says the denials report is a good place to figure out two key leak-busting tactics: how you can correct everything that’s sitting out there to be collected, and where training and preparation might help you avoid those mistakes again.

Managing to avoid revenue cycle leaks is especially challenging for ASCs because the process can be time and resource intense.

Says Petrie: “It can be overwhelming when you think about how many accounts you have to look at to try to figure out what’s going on. ASC administrators don’t have the time to go through thousands of accounts. And the ASC software doesn’t always have the most robust reporting, just because that comes at a pretty high price tag, so you’re stuck doing lot of manual reporting. But if you take this approach and try to narrow it down so that you’re not looking at every account out there, that might help get you going. If you start with those three reports, they’re broad enough that you should be able to get the data from any system you’re using, and use it to narrow your scope so you’re not searching for a needle in a haystack.”

For more information about investigating revenue cycle leaks, contact us.

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