Revenue Cycle Analysis

4 Key Areas Analyzed During a Business Office Audit

Ambulatory surgery center (ASC) administrators are charged with improving their ASC’s financial health and periodic business office audits are key to identifying, both quantitatively and qualitatively, a center’s strengths and opportunities.

On the surface, an audit sounds intimidating. But according to Michael Orseno, VP of Revenue Cycle at Regent RCM, it doesn’t have to be that way.

“We want our centers to maximize revenue and a routine audit is the fastest way to get on track and stay on track,” said Orseno. “The audit identifies issues – then working with our partner centers, we implement strategies and processes to correct them; it’s that simple.”

A Regent RCM audit goes beyond a traditional reimbursement assessment by examining four areas vital to the function of an ASC: reimbursement, coding, staffing and observation (workflow and process).

  1. Reimbursement. Regent RCM conducts a thorough review of a center’s billing and reimbursement procedures, including reviewing payor contracts. “Ensuring that an ASC is being reimbursed the full and correct amount per each procedure code for every case is one of the most important billing practices to maximize revenue for the center,” said Orseno. “Due diligence is crucial and for our partner centers, our team of revenue cycle specialists are intimately familiar with every payor contract.”
  2. Coding and Billing. Whether a center outsources its coding services or employs a certified coder, Regent RCM’s audit evaluates coding, determining if cases are coded correctly and billed properly. “We watch for inaccurate modifiers, which can negate or reduce payment on an otherwise clean claim,” noted Orseno, “and when applicable, we pay particularly close attention to implant coding errors.”
  3. Staffing. More business office staff does not always equal more efficiency, and striking a balance is difficult. Regent RCM’s audit diligently tracks business office FTEs in all of its facilities and compares facilities against the gold standard.
  4. Observation. Regent RCM’s expertise comes from exclusively developing, executing and refining revenue cycle management strategies. “Leveraging our collective experience, our team observes business office functions and processes and looks for inconsistencies and efficiencies,” said Orseno. “For example, a front office employee may be spending vast amounts of time verifying insurance benefits when this can be accomplished more efficiently with the use of technology.”

To learn more, read a case study revealing how an audit uncovered coding errors which led to recouping more than $590,000 in additional funds.

A recent blog highlighted what to expect from a business office audit, including Regent RCM’s methodology. Ready to schedule an audit for your center? Call (312) 882-7228 today.

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.

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.

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.

ASC benchmarking

What does it take to get your center healthy?

For an ambulatory surgery center to be financially healthy, it requires that data, analytics and reporting tools be set in place to monitor the success of certain key performance indicators (KPIs) that allow the center to be in total control of the revenue cycle.

If an ASC does not have visibility of these KPIs via a real-time management console or analytics tools, no one might realize that there is a problem within the revenue cycle, which could ultimately cause significant revenue and timing challenges.

Signs an ASC is not financially healthy

There are a few tell-tale beacons to watch for to determine your center’s financial health:

  • A monthly decline in revenue
  • A monthly increase in A/R days

If these changes occur, a center must immediately begin to examine the root cause of the issues and formulate a plan of attack to regain consistent performance and overall financial health.

Improving an ASC’s financial health

Ultimately, successful financial health comes down to this: Revenues exceeding expenses. On the cost side, you should examine business office staffing costs to determine if they’re optimized with the right people in the right roles. On the revenue side, you should look at revenue per case as well as the revenue per contract. Each contract should be uploaded into the management information system (MIS), and every revenue cycle specialist should have an intimate understanding of each contract. This ensures that the correct reimbursement is being received.

To begin to understand your center’s financial health status, you can take a proactive first step and complete a business office audit to determine what issues exist, where the issues are and where changes need to occur.

Once you recognize the need to improve your ASC’s financial health, the center has two options: Keep RCM internal or outsource RCM.

To make this decision, it’s best to objectively analyze your center’s capabilities and strategies. If your center has the resources, expertise, technology and performance to not only sustain a healthy revenue cycle but improve upon it, you can implement internal changes. However, if this is not the case, then outsourcing RCM to an organization that’s dedicated to each piece of the revenue cycle may be the best top line and bottom line approach.

ASCA 2015 Conference

Learn more about Regent RCM at our ASCA 2015 exhibitor booth

Regent RCM is headed down to sunny Orlando, Fla., May 13 through 16 to participate in ASCA 2015, the premier conference for the ambulatory surgery center community. We are looking forward to this opportunity to network with those in our industry.

During the conference, stop by Regent RCM’s exhibitor booth #413 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 you center cannot dedicate internal staff and resources to RCM, outsourcing may be a smart business move.

To determine the financial health of your center quantitatively and qualitatively and gain a better understanding of your strengths and opportunities, Regent RCM offers a free business office audit that focuses on observations, reimbursement, coding and staffing.

You’ll also learn more about the Regent RCM solution, which includes the industry’s first balanced pricing model, advanced revenue cycle benchmarking through the measurement of key performances indicators (KPIs) and fully integrated workflow automation to reduce errors that lead to late or denied payments and lower administrative staff costs.

To find out more about Regent RCM at ASCA 2015, contact Regent RCM Director of Business Development Ed Tschan at (312) 882-7228 or etschan@regentrcm.com.

ASC physician benchmarking

How does ensuring reimbursement per contract agreement maximize revenue?

After proper code entry and follow up, ensuring that an ASC is being reimbursed the full and correct amount per each contract agreement is one of the most important billing practices to maximize revenue for the center.

Contract knowledge ensures correct reimbursements

It’s imperative that revenue cycle specialists are intimately familiar with every payer contract and have read through every one. Without this knowledge, your center may not be receiving the full reimbursement payment, but no one will know. For example, if the insurance says they’re only paying $1,500.00 but the contract says they should be paying $2,500.00, the ASC is missing out on $1,000.00. And often an insurance company won’t point out if the payment is incorrect. Knowing the amount of each reimbursement per contact allows a center to immediately appeal an underpayment when a discrepancy occurs.

Due diligence is an important aspect of this practice as revenue cycle specialists should take the time to confirm that the reimbursement received matches the contract rate, and if it doesn’t, the payer should be contacted immediately in order to optimize revenue to its fullest potential. Because of this, it can be useful to upload each payer contract into your center’s management information system (MIS) software to easily access information as needed.

Contracts can change or be updated over time

There are changes and updates that can occur as well that revenue cycle specialists should be aware of:

  • After one year, the reimbursement rate in the contract may increase a percentage
  • Some contracts may include a multiple procedure discount with different rates after the first procedure
  • Contracts may have “groupers,” or groups of codes, that can change over time
  • After one year, it may be time to renegotiate the contract

Therefore, ASCs and revenue cycle specialists need to stay on top of any and all changes that occur to maximize revenue and improve the center’s overall financial wellness.

Complete reimbursement audits

To ensure that your center is receiving its full reimbursement per each contract agreement and any repayment issues are being addressed, we would strongly recommend a reimbursement audit as part of a larger business office audit. Based on the results of your audit, underpayments can be appealed and problematic claims can be resubmitted.

ASC Business Office

How does proper charge entry affect an ASC’s financial performance?

Charge entry is considered one of the most critical stages in an ambulatory surgery center’s billing process. Best practices, including using modifiers correctly and performing regular business audits, should be followed and executed by knowledgeable experts to maximize revenue potential for the ASC.

Using modifiers correctly

Billers must confirm that not only the correct codes are inputted for each procedure performed, but also the correct modifiers are used. The two most common modifiers are 50, which is used for bilateral procedures performed during the same surgery, and 59, which indicates a procedure that is independent from other services performed on the same day. Inputting the correct modifier directly affects reimbursement so it is imperative to an ASC’s financial health that the biller gets it right the first time.

Performing regular business audits

Many billing and coding staff members are unaware of the importance of reading the full payer contract and how charge entry errors can affect the ASC’s financial performance. Performing a business office audit can help point out if there has been any lost revenue due to errors during the charge entry process. Audits should be performed regularly and errors should be reviewed so future revenue is not lost.

Impact on financial performance

Charge entry requires full understanding of payer contracts and billing s and is particularly important for ASCs with specialties like orthopedics, spine cases and pain management. Errors in the charge entry process can lead to lost revenue and directly impact an ASC’s overall financial performance.

ASC revenue cycle benchmarking

How to tell if your ASC needs better revenue cycle management: Part 2

In part one of this series, we discussed the foundational changes in key performance indicators (KPIs) that might signal that your ambulatory surgery center is in need of a better revenue cycle management. Today, we’re going to take a closer look at the less obvious changes that could negatively affect the financial health of your center.

Changes in AR, revenue and clean claims percentage should be fairly visible to the center, but many other essential performance indicators may not be as apparent.

The need for a real-time dashboard
Access to a real-time management console that aggregates all KPIs can provide a competitive edge. Even if the employees have a suspicion that there’s an issue, having the time and resources interally to perform an evaluation and substantiate a concern may be challenging at best.

Patient dissatisfaction
Perhaps most poignantly, billing issues can also lead directly to patient dissatisfaction. Lengthy delays in billing can create situations where a past due notice is received even before the original bill.

The need for a full business office audit
When a center is experiencing a rise in AR days, a drop in revenue, and struggling clean claims percentage, a business office audit may be the best course of action. While some centers may request just a coding audit, especially with the impending ICD-10 changes, it is more beneficial to perform a full business office audit including all components of the revenue cycle process. Importantly, finding an RCM firm that offers a no-cost business office audit is the first key step in benchmarking center performance and building a strong foundation for growth.

A lack of regular measurement and reporting
Internally, billing employees can and should be running reports to determine the root cause of financial problems. It’s important to note that an ASC needs to have the right staff, time and tools in place in order to identify and take the appropriate steps to find and resolve financial challenges.

ASCs that can’t dedicate the time and resources or don’t have the expertise may be better off outsourcing billing and coding to a firm with highly skilled employees whose sole focus is on revenue cycle management. The right provider has the necessary reporting and analytical capabilities to pinpoint AR, revenue and clean claim percentage challenges to ensure not only revenue consistency but revenue growth.