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 Vice President of Revenue Cycle Management Michael Orseno, 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,” Orseno 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,” Orseno 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,” Orseno 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 Payor 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 payor 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 payor.”

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 payor 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 payors. “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 payor 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 payor negotiations and how Regent RCM can help, contact 312-882-7228.