asc revenue cycle billing analysis

Uncovering Improvements through Denied Claim Cause Audits and Management

No ambulatory surgery center wants to miss out on revenue because of inefficient revenue cycle management practices.

An organized and streamlined revenue cycle requires an ASC to get every detail of coding, billing, and collections right the first time – and on time. By following a few straightforward – but important – steps, ASCs can review their current revenue cycle management processes and identify any problem areas that need to be resolved.

Regent RCM has developed a new guide that outlines three regular audits ASCs can incorporate to uncover mistakes and inefficiencies in order to enhance revenue cycle performance. The guide recommends three strategies to analyze and improve:

  1. Denied claim cause and management
  2. Coding accuracy
  3. Payer contract adhesion

In this blog, we outline the denied claim assessment and how to better manage these audits.

Around 10 to 20% of healthcare provider revenue is tied up in denials, and the top two causes for denied claims are missing information and inaccurate information. ASCs can dramatically improve their financial performance just by reducing the number of claim denials.

Regent recommends taking these actions to manage denials more effectively:

  • Act immediately. – Address every denied claim within a week of receiving notice from an insurance company.
  • Investigate the cause. – Reach out to the payer to understand why the claim was denied and how it can be amended.
  • Track past claims. – Analyze the reasons for denied claims and approaches that have been successful to tweak current processes.
  • Watch for patterns. – Pay attention to which errors, like misspelled names or missing information, are most common in denials.
  • Focus on prevention. – Remember that avoiding denied claims is the most effective way to minimizing days in A/R.

Learn how to implement this audit and our other strategies to uncover revenue cycle inefficiencies and boost financial performance. Download the guide.

Billing Mistakes and How to Avoid Them: Part 2

An ambulatory surgery center depends on an efficient revenue cycle management process for financial and operational stability. Because the revenue cycle involves complex and overlapping processes, an ASC needs a revenue cycle solution that can manage everything from billing and collections and payer contract negotiating to measurement and reporting and automated workflow tasks.

Billing mistakes can cause serious problems for an ASC, interfering with its immediate cash flow and long-term financial health. In a recent post, Regent RCM outlined prevention tactics for four common ASC billing errors. The second part of this series will examine four additional billing mistakes and how to avoid them.

  1. Not Reconciling Billing

It is crucial for ASCs to monitor patient files carefully, making sure that all performed procedures are billed and followed up on. Unbilled procedures result in lost revenue, damaging a center’s revenue cycle. Similarly, cases that are denied or rejected by the payer must be properly appealed or processed.

Solution: Utilize a system that tracks all performed cases and ensures that they are billed out within a certain timeframe. Use automated tools as much as possible, setting up notifications and reminders to follow up on claims or make edits as necessary.

  1. Neglecting to Appeal Claims

Inaccurate payments are unfortunately commonplace within the revenue cycle. The real problem arises when ASCs fail to appeal incorrect or incomplete payments in a timely manner. If a center doesn’t maintain a quick and streamlined appeals process, it can fall into harmful patterns and struggle to meet its financial goals.

Solution: Address flawed payments right away, setting a specific turnaround for sending out appeals. Regent RCM’s standard is to appeal all under- and no-pay claims within 24 hours.

  1. Not Measuring Performance

Unidentified problems can’t be fixed. Kept busy with day-to-day responsibilities, ASCs often neglect to monitor key performance metrics of their revenue cycle – and any problems with net collection rates, A/R days, or statement, charge, or claim lags remain unresolved.

Solution: Implement measurement and reporting software to track specific benchmarks in the revenue cycle. Gauge the current health of the ASC’s performance, and set goals going forward. For example, the Regent RCM gold standard net collection rate is a minimum of 97%.

  1. Errors in Payment Posting

Erroneous payment posting can lead to confusion and financial losses for an ASC. A simple mistake, such as a typo in a payment amount, has a domino effect: an incorrect patient responsibility and billing statement, back-and-forth communication with the patient, a statement adjustment, and so on.

Solution: Check that all billing, payment, and collection information reconcile properly. If it is a challenge to manage the process with in-house staff, outsource it to a company with expertise in revenue cycle management. Regent RCM uses sophisticated software to post payments, ensure that they are paid according to contract, and turn over bad debts to collections.

Need expert assistance in improving your revenue cycle management? Contact Regent RCM

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.

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.

ASC billing department

A well-rounded interview process leads to successfully hiring the right revenue cycle specialists

In our last post, we looked at what qualities a successful revenue cycle specialist possesses. Today, we examine why determining if a candidate is the right fit for an internal revenue cycle specialist position can be a challenge. A potential hire who looks perfect on paper may not have the people or communications skills needed when it comes to the in-person interview, so developing a well-rounded interview process ensures that the candidate who is the best fit in all aspects gets the job.

Provide a skills assessment

Creating a skills assessment test provides you with a solid indication of their previous experience, knowledge and problem-solving skills. It’s not a matter of getting every question right, but rather assessing their critical thinking and thought process on the questions he or she got wrong. This also provides insight into whether or not the candidate will be teachable.

Complete a multi-person interview

In addition to the skills test and examining the candidate’s resume, the in-person interview helps you establish if this person possesses the necessary qualities and is a good fit for both the position and the team. It’s beneficial to have the potential new hire interview with a few different employees. At the conclusion of the process, the interviewers can discuss their thoughts and opinions to come to an informed decision on whether to hire the individual.

Tailor interview questions around the culture of the ASC

The in-person interview also gives the interviewers a chance to see if the candidate is well suited to the center’s culture. For instance, Regent Revenue Cycle Management (RCM) works with a one-to-one model, providing each ASC with a dedicated revenue cycle specialist. This allows the specialist to develop a strong, vested relationship with each center, and it’s important that any new hires can fulfill this model.

Another way to determine if the candidate fits in with the culture is to ask questions regarding the center’s values. Regent RCM, for example, tailors questions around its RISE (respectfulness, integrity, stewardship, efficiency) values. The individual’s answers to the interview questions will provide insight as the whether he or she possesses these non-negotiable qualities.

This well-rounded interview process provides a multi-dimensional look at each candidate to help you best determine who will be the optimal fit for your center.

Becker's ASC Review Conference

Learn more about Regent RCM at the upcoming Becker’s ASC conference at booth #31

Regent RCM will be attending Becker’s 13th Annual Spine, Orthopedic and Pain Management-Driven ASC Conference & the Future of the Spine in our hometown of Chicago, Ill., from June 11 through June 12, 2015. We look forward to Becker’s each year as an opportunity to network with those across our industry and provide fresh insights on revenue cycle strategy and best practices.

What are the benefits of outsourcing RCM?

Be sure to stop by Regent RCM’s exhibitor booth #31 at the conference to learn more about the benefits of outsourcing RCM for ASCs. We understand that maintaining a successful and healthy revenue cycle management strategy requires a great deal of time, resources and expertise. If your center cannot dedicate internal staff and resources to RCM, outsourcing may be a smart business move.

Learn about reporting and analytics

This is also an opportunity to discover the importance of reporting and analytics for your center. We are thrilled to have Steve Taylor from ASCInsight joining us to provide live demos during the conference. Steve will be demonstrating how you can configure a real-time dashboard for both financial and clinical key performance indicators (KPIs). He will also offer insight on creating and configuring customized reports and well as those that come standard with the platform.

Sign up a free business office audit

To determine the financial health of your center quantitatively and qualitatively and gain a better understanding of your strengths and opportunities, be sure to sign up on site for a free business office audit that focuses on observations, reimbursement, coding and staffing.

To schedule an on-site appointment, contact Regent RCM Director of Business Development Ed Tschan at (312) 882-7228 or etschan@regentrcm.com.

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