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.

3 strategies

3 Strategies for Getting Your ASC Paid on Time

The financial health of your ambulatory surgery center (ASC) depends on accurate, efficient revenue cycle management – which is difficult to maintain in an increasingly complex insurance environment. Submitting clean claims to payers is an important step in decreasing delays and denials, but it is only one part of the equation. To ensure your ASC is paid properly and promptly, take a proactive approach to streamlining your revenue cycle.

Here are three ways to improve your ASC’s revenue cycle management and work toward your profitability goals.

Evaluate & Update Payer Contracts  

Review all of your current payer contracts and fee schedules. Are payers sending appropriate reimbursements as agreed upon in your contracts? Have any payers updated or waived certain costs or processes because of COVID-19? When was the last time you renegotiated contracts with your most common payers? If you haven’t revised a contract in some time, you may not be receiving the best rates.

Track Key Payer Metrics

To gain a better overall view of your ASC’s financial picture, collect information on claims and reimbursements, and grade major insurance payers on key metrics. Start by asking these questions about each payer:

  • What do they pay for a procedure?
  • How fast do they pay?
  • What percentage of claims do they deny?

Use this data to understand how common denials are and how much time your staff is spending to collect from each payer. Can you pinpoint any trends associated with delays or denials? Are you including all of the information needed for a claim? Are you submitting clean claims and still having to appeal incorrect denials? If you notice that your team frequently battles with a payer over correctly billed claims, resulting in hours of lost staff time, you can use this information to push for changes or contract renegotiations.

Follow Up Quickly

Establish a schedule of follow-up practices for outstanding claims and erroneous denials, and remember not to accept the payer’s first payment. Calculate your ASC’s average days in A/R, and set a goal for following up on claims to reduce that number. If your ASC receives a denial where the payer is at fault, set a timeframe – such as 24 hours – in which your staff must resubmit the claim or file an appeal.

Effective revenue cycle management requires diligence and consistency. Partnering with ASC revenue cycle experts can transform your center’s financial health. Get in touch with Regent RCM to optimize reimbursement and solve problems in your revenue cycle.

key payer metrics

Tracking Key Payer Metrics Can Help ASCs Manage Financials and Negotiate

As ambulatory surgery centers (ASCs) become more sophisticated about financial management, they’re beginning to adopt a practice that has been used by many hospital administrators. This practice is grading the major insurance payers on key metrics. This is done in order to inform future contract negotiations and for the overall profitability of the ASC.

Regent RCM’s Senior Director Erin Petrie says Regent RCM is developing a protocol for its ASC clients. The process helps track and evaluate major insurance payers and gather insights from side-by-side comparisons.

“The practice of collecting payer data, even in something as simple as a spreadsheet, is helpful for negotiations,” says Petrie, “I think it’s good for the administrator of a surgery center to have that knowledge. Therefore, the administrator can gain a better idea of what’s going to happen to your financials each month. For example, how long should you wait for an expected payment from any particular payer? If you see that work comp is now taking 65 days to pay instead of the 50 days they were previously trending – you want to be able to investigate those types of things.”

Petrie suggests three key metrics as a good start on grading the payers:
  • What they pay for a procedure
  • How fast they pay
  • Each payer’s percentage of claims denied

“Those are the three metrics that stand out for me,” Petrie says. “But there are a lot of additional things that could be measured for the sake of having a better negotiation tool. For example, the reimbursement methodology each payer follows might be another good one. Do they use groupers, are they reimbursing as a percent of Medicare, are they including implants or paying for implants separately? That sort of data is helpful to have.”

While Petrie admits developing and maintaining a process for grading the major payers is resource intensive, she believes the benefits can be compelling. As a result, Petrie and her team are incorporating the practice as a part of Regent RCM’s scope of services for ASC clients.

What might ASC administrators learn from such a process?

“Definitely around denials the information can be pretty eye opening,” Petrie notes. “If you take the time to really look at your Explanation Of Benefits documents (EOBs) and your denials, you’ll learn that payers have many more denials than you thought. But you’ll eventually get paid.”

Implementing a system for grading payers helps answer key questions: Is a payer denying things that they should be paying for? How much time does your staff have to spend to collect from each payer? And, how long is it taking for that money to come in from each? Most importantly, collecting this data gives ASCs better information to use in negotiations.

“ASC admins already do a good job of collecting data to use when we negotiate with the payers around quality metrics, clinical outcomes and cost effectiveness,” she says. “However, the opportunity is to couple that with what we see happening on the financial side. The data may allow us to point out that we’re experiencing too many denials.”

She adds, ” it may also allow us to show that our total short payments are, for example, $200 off on average per case. And we could talk tangibly about days to pay. Maybe they have 30 days to pay in the contract, but your data is showing that they’re averaging 50 days. When we can share hard data, we have additional points to negotiate.”

Petrie believes “grading” insurance payers has value at an enterprise level as well as for individual centers. “Either way, it’s a real value add for surgery centers to understand their payers, both to inform negotiations, and to manage financials more effectively.”

For more information on Regent RCM’s approach to grading insurance payers, contact Petrie. Email her: epetrie@regentsurgicalhealth.com or click here to send a message to the Regent RCM team.

Revenue Cycle

Top 4 ASC Payer Contracting Practices – Part 1

Ambulatory surgery center (ASC) administrators face a variety of challenges when it comes to successfully managing their payer contract negotiation deadlines. In the first of a two-part series, we outline two of four top strategies to ensure seamless payer negotiations.

According to Andrea Woodell, Vice President of Managed Care at Regent Surgical Health, hard-working and well-intentioned administrators and office managers are often too busy balancing numerous job responsibilities to dedicate the needed persistence and focus required to successfully negotiate expiring payer contracts.

Two of four top strategies to ensure seamless payer negotiations include:

  1. Incorporate Centers for Medicare & Medicaid Services (CMS) changes into your contracting

There must be ample room in the budget for contractual changes to occur, says Woodell. “You should not rely on the payer to be responsive or have the bandwidth to renegotiate your contract. There’s just not enough staffing to do that,” she advises.

Medicare has been making a series of significant adjustments causing sizable reimbursement changes, Woodell says. “Codes 62310 and 62311 are being deleted and replaced with 62321 and 62323,” she explains. Facilities performing hundreds of these cases will incur cost reductions at $53 apiece, she adds. “This could add up to tens of thousands of dollars – and that’s just under Medicare patients,” Woodell estimates.

Woodell also emphasizes codes 64490 and 64493 will soon take an even bigger hit, decreased under Medicare by $115 each. Woodell therefore recommends budgeting for changes within your current negotiations.

“Not every payer contract pays based off a percent of current year Medicare, some contracts will have language stating the contract is based off 2015 Medicare. Your current rates will remain and will not be impacted,” Woodell says. “But the contracts that are based off current year Medicare will immediately see a decrease.”

“One large payer gave me an eight percent increase for a two-year contract,” she explains. “Subsequent to adjusting for 2017 CMS changes, this eight percent increase then became a 4.7 percent increase. Eight percent from a large payor plan is a slam dunk – but 4.7 for a two-year? Not so much. So, I was right back at the table,” she says. “It’s not done, but I’m fighting the fight.”

  1. Plan for the future with case mix changes

Woodell says more focus needs to be placed on negotiating contracts and planning for the future with case mix changes and updated procedures.

“Most payers are unwilling to open up negotiations during a normal existing contract term,” she says. “Therefore, it’s critical to plan for the future. Even if you’re 9-12 months away, put it in your contract now.”

Adds Woodell, “If you have it carved out already, you can avoid when Medicare releases it and adds it to their list because they’re not going to be generous.”

To learn more about payer negotiations, contact Andrea Woodell. She has negotiated on behalf of health care providers and professionals for over 20 years, working in tandem with business offices to enhance collections.

In part two of Regent RCM’s blog series, Woodell details how to optimize annual contract negotiation increases and what is most overlooked regarding TPA & PPO contracts.

Click here to read part two!

revenue cycle management

3 Secrets to Successful ASC Revenue Cycle Management

Effective ambulatory surgery center (ASC) revenue cycle management can be hard to achieve, particularly as internal and external forces exercise their influence. According to Regent RCM’s Director of Revenue Cycle Management Erin Petrie, ASCs that pay attention to three key success factors are well-suited for the challenge.

“The first key success factor is driven by the healthcare industry’s shift toward value-based care,” Petrie says. “While assuming reimbursement risk from payers along with the responsibility to provide quality care has created some uncertainty and challenges for ASCs, managed care is in better hands. ASCs are equipped to both deliver quality care and manage costs more effectively than insurance companies ever were. But to be successful in revenue cycle management (RCM), ASCs need to become more adept at both managing costs and collecting additional revenue directly from patients, many of whom have selected healthcare insurance plans with lower premiums but higher deductibles.”

Another factor is also closely related to the evolution of value-based care. While many ASCs are succeeding at streamlining procedures and costs for procedures new to out-patient treatment, such as total joint replacement, payment bundling and reimbursement declines introduce new pressures. For example, payers are beginning to scrutinize payment of high-cost implant procedures and are driving a hard bargain when it comes to bundled payment agreements. As ASCs assume leadership of these bundles, a second key success factor is careful negotiation along the way. “You need to be diligent – check your costs, factor in economies of scale but also account for patient-driven variation, and renegotiate contracts annually,” Petrie suggests.

A third way to ensure successful RCM is to optimize business office staffing. “The best-run ASCs make sure their RCM staff is motivated and incentivized to aggressively pursue revenue, rather than just remaining content with the status quo,” Petrie says. “If an ASC’s staff is accepting only what the insurer pays and not fighting for what the center is contractually entitled to or higher than ‘usual and customary,’ that particular facility may be leaving a lot of money on the table.”

revenue cycle dashboard

Managed Care ABCs for Day-to-Day Payer Negotiations

While Medicare’s recent changes and emerging alternate payment models are top-of-mind for many in the healthcare industry today, it is equally important to pay attention to the day-to-day management of payer contracts.

According to Andrea Woodell, Vice President of Managed Care at Regent Surgical Health, even as MACRA (Medicare Access & CHIP Reauthorization Act) drives healthcare to performance targets it will take some time for those changes to take full effect. Meanwhile, healthcare facilities can’t lose sight of their routine negotiations. “It’s not magic, it just takes constant attention,” Woodell says. “One of the biggest mistakes that many centers make is not renegotiating contracts annually, or entering into multi-year contracts without factoring in incremental increases each year.”

Many ambulatory surgery centers in the industry do not revisit and renegotiate their managed care contracts annually to maximize their payments. Keeping reimbursement contracts current is critical for ongoing financial health of most centers. “If you’re not getting at least a 3% increase each year, you’re probably falling behind,” Woodell explains. “We advise centers to look at contracts annually. Identify the facility team member with the correct skill set and align their incentive plan to reward annual payer negotiations and go get those increases!”

Even for standalone surgery centers in saturated markets with no hospital partners, Woodell says, it is possible – and important – to negotiate minimum annual increases of 3%. SWB, new technologies and medical instrumentation, and implants drive up the cost of surgery every year. “I am working on a new project with development reviewing a center’s agreements for the lift I can bring; one of the contracts was last negotiated in 2002 and pays well below Medicare. If the agreement had been touched annually their payments could be 40% higher for that payer.”

Woodell outlines two key steps for centers looking to do a better job in this important area:

“One strategy we’ve found to be effective, is to involve a surgeon in the negotiations. Elevating the negotiation beyond your financial counterpart at the payer organization changes the dynamic. If you have your surgeon contact the VP over ancillaries on the payer side, it can completely change the conversation and may have the power to take you from a 3% increase in a contract year to 10 or 15%.”

Another of Woodell’s recommendations is to pay attention to your facility’s relationships with payers. “These relationships are more important than ever,” she says. “If they don’t like you, not only will they not help you, they will hurt you. – A good relationship with a payer means you understand their challenges as much as you want them to understand yours, and you help them help you by giving them good, objective data that they can take on to their interior team to help you achieve what you’re asking for.”

The bottom line in these contract negotiations, according to Woodell, is to demonstrate the value and cost savings that you’re providing to payer organization. Focused attention, surgeon involvement and strong relationships within the infrastructure of payer organizations can improve results beyond the standard response of “No, all I can do is 2%.”

To learn more about payer negotiations and how Regent RCM can help, contact 312-882-7228.

Revenue Cycle

Regent RCM and ZirMed Partner to Improve Revenue Performance

Authored by Vice President of Revenue Cycle Michael Orseno, Regent Revenue Cycle Management (RCM) this week released an article that outlines five ways in which Regent RCM and ZirMed combine to improve revenue performance.

“The ASC revenue cycle is complex and we both know that. Through our partnership, we leverage our expertise and provide ASCs with the support and technology needed to effectively manage the revenue cycle,” said Orseno. “With this article we drill down on five keys to getting paid quickly and efficiently.” Strategies include:

  1. Verify insurance coverage.
  2. Code claims correctly the first time.
  3. Minimize claim denials.
  4. Act quickly against denials.
  5. Arrange for/Collect patient out-of-pocket expense up front.

“Surgery centers need revenue cycle strategies that work and together with ZirMed, we deliver breakthrough revenue cycle management solutions that enable partner centers to collect every dollar they are entitled to,” added Orseno.

The article, Regent RCM, ZirMed Work Together to Solve ASC Revenue Issues, appears exclusively online at Becker’s ASC Review. Click here to read the full article.

Regent RCM’s Michael Orseno to Speak at Becker’s Second Annual CIO/HIT + Revenue Cycle Conference

Regent Revenue Cycle Management (Regent RCM) has been selected to participate in this year’s CIO/HIT + Revenue Cycle Conference hosted by Becker’s.

Michael Orseno, Vice President of Revenue Cycle at Regent RCM, will contribute to a timely panel discussion, Addressing High Deductible Patient Plans and the Evolving Role of Patients Becoming Payers, from 1:00 p.m. – 1:45 p.m. on Thursday, July 28.

“More and more, patients are responsible for handling most of the financial responsibility for their medical care,” said Orseno. “Moving forward, it is critical for revenue cycle leaders to focus on high deductible patient plans, and understand how these plans impact the revenue cycle.”

The conference takes place July 27-28 at the Fairmont Hotel in Chicago. Attendees can sit in on a variety of sessions, featuring 175 experts and revenue cycle leaders. Overall, there will be nearly 100 sessions over the two-day conference, with three full CIO/Health IT tracks, as well as three full revenue cycle tracks. Topics include:

  • The Transformation from Volume to Value and the Constant Movement and Impact on the Revenue Cycle—Wednesday, July 27, 8:05 a.m. to 8:45 a.m.
  • Adapting Best Practices for the Revenue Cycle– Wednesday, July 27, 8:50 a.m.-9:30 a.m.
  • Key Thoughts on Improving Revenue Cycle– Wednesday July 27, 9:50 a.m.-10:30 a.m.
  • The Biggest RCM Pitfalls– Thursday, July 28, 9:45 a.m.-10:25 a.m.
  • Post ICD-10—How is the Revenue Cycle Performing? – Thursday, July 28, 1:00 p.m.-1:45 p.m.

For more information on the conference and registration, download the brochure here.

ASC Revenue Cycle Benchmarking Series Video

Regent RCM Focuses on Net Collection Rate in Webinar Series

In the final installment of Regent RCM’s three-part webinar series on ASC industry benchmarks to determine the health of a center’s revenue cycle, Vice President Michael Orseno and Director of Business Development Ed Tschan examine how to interpret these key performance indicators (KPIs) and what they are really communicating.

“Performance benchmarking continues to be an integral part of the Regent RCM team’s operations and its focus on continuous improvement,” said Tschan, who introduced the webinar and Orseno.

Orseno recapped the five ASC revenue cycle metrics mentioned in the second webinar but went into greater depth, discussing which ones could stand alone and which ones could be manipulated. He added a sixth ASC revenue cycle performance metric, net collection rate, which cannot be manipulated and explained its significance.

“It’s nearly impossible for office staff to manipulate the net collection rate,” said Orseno. “That’s why we sometimes refer to it as the great lie detector. All the other metrics we discussed previously can be manipulated. The only way this metric can be manipulated is by the person doing the calculation.”

Multiple attendees of the three-part webinar series commented that they plan to immediately incorporate ASC revenue cycle benchmarks to improve the health of their ASC.

“I think it was an awesome series with so much helpful information,” said one attendee. “I couldn’t believe all the insight our center can gain from utilizing these metrics. We’re running reports right now to see where we stand.”

Tschan stressed the importance of a revenue cycle audit that utilizes these recommended metrics to allow a center to confidentially capture existing performance metrics and get a solid sense of where they stand.

“What we’ve found historically is that most centers don’t have the luxury of having a strong financial contact that has performed revenue cycle audits before,” said Tschan. “We recommend that a center looks for an auditor specifically in the ASC community to provide relevant qualitative and quantitative insights.” He went on to explain how to find the right auditor, including four key areas that should be part of the audit and what to expect at the end of the audit process.

Orseno finished up the webinar by putting ASC revenue cycle benchmarks in perspective, noting that they are a valuable tool, but only part of the picture.

“We want to make sure that you have the tools in order to measure these metrics and to be able to identify how these metrics can be manipulated,” said Orseno, “but I think the most important message we want to put out is not to be blinded by these metrics, either one by one or altogether. Use them as a tool but ultimately, focus on the revenue due to the center.”

Click here to listen to the full webinar with detailed information on assessing the validity of these ASC revenue cycle benchmarks and how to be mindful of those that can be manipulated.

ASC Revenue Cycle Benchmarks Defined

Regent RCM Webinar Series Addresses Five ASC Revenue Cycle KPIs

In the second of Regent RCM’s three-part webinar series, Vice President Michael Orseno examined five ASC industry benchmarks or key performance indicators (KPIs) that measure the health of a center’s revenue cycle.

“Focusing on these industry benchmarks has been an integral driver of our team’s success and in the continuous improvement cycle of our partner centers,” said Director of Business Development, Ed Tschan, who introduced Orseno.

Tschan added that many revenue cycle conversations with ASCs frequently include questions regarding recommended metrics to drive the financial health of a center, whether metrics operate independently or in an integrated manner, what metric tracking capabilities exist and how to leverage the information to benefit the center.

Orseno addressed these questions while discussing five of the ASC industry benchmarks: Days Outstanding/Days in A/R, % of A/R greater than 90 Days, Denial% and Clean Claim, Charge, Claims Lag, and Statement Lag. He explained how to calculate the metrics, why the information is useful, the Regent gold standard for each of these metrics, and why keeping a center’s numbers within target parameters will maintain a healthy revenue cycle.

“Once your center is measuring these benchmarks, they should be monitored monthly, at minimum, possibly weekly,” said Orseno, in response to an attendee’s question. “For collections, a standard should be set as a goal each month and metrics should be looked at weekly. Other metrics, such as days in A/R should be monitored monthly.”

Click here to listen to the full webinar with detailed information on these benchmarks and answers to more questions on how to utilize them. To register for the final webinar in the series, held May 3, click here.

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