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.

Regent RCM front desk billing

Proper follow up procedures can reduce the number of A/R days

In addition to proper charge entry, follow up is an essential part of an ambulatory surgery center’s billing practice, and this step alone can involve up to 60 percent of the billing staff’s time. Though it can be time consuming, taking the proper steps to ensure that claims are being processed correctly, and thereby optimizing revenue, will directly impact the center’s revenue cycle as a whole.

Contact payers to check on claim status

Billing specialists should dedicate time to call each payer and check on the status of each claim every 30 days. This assists the center in determining if the claims are clean or if the payer needs any additional information to approve the claim. Payer follow up can help prevent issues and delays in payment as these can ultimately lead to non-payment. If an appeal is needed, it’s best to begin working on that immediately. If a biller appeals a claim right away and uses the correct verbiage in correspondence, the payer shouldn’t hesitate to pay.

Run A/R reports to streamline follow up process

Regular monthly A/R reports should be run to streamline follow ups, and billing staff should follow up with every account listed. Using a software management information system (MIS), such as HST Pathways, provides a platform for an efficient workflow. With an MIS, tasks can be automatically assigned to each billing specialist. For example, one specific specialist can be assigned to follow up on accounts that are 45 days past due. This will help prevent problematic claims from falling through the gap.

Don’t forget patient follow up

It’s also necessary to follow up with patients every 30 days to make sure that payments due are fully accounted for as part of the ASC’s financial projections. After 90 days, it’s time to send the patient a final notice and determine if the bill will be sent to collections. To avoid reaching this point, early patient follow up allows the center to collect the full payment or set up a payment plan to ensure the center is maximizing revenue given individual patient circumstances.

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.

Revenue Cycle Dashboard

The Benefits of Outsourcing RCM: Transparent Measurement and Reporting

 Over the course of March, we are diving deep into four key benefits of outsourcing revenue cycle management (RCM) for ambulatory surgery centers.  Last week, we examined how outsourcing RCM provides ASCs with smart staffing solutions and helps them avoid the need for succession planning. This week, we take a closer look at the importance of transparent measurement and reporting, which provides a greater insight into accounts receivable and collection trends.

With the ever-changing landscape of healthcare, including the fast approaching implementation of ICD-10, it’s imperative that ASCs have solid and transparent means of measurement and reporting to understand how the center is performing, where changes need to made and how to improve the bottom line.

Internally, ASCs may not have the necessary expertise, technology and resources – not to mention time – needed to devote to measurement and reporting. To truly track and trend change, these processes can be outsourced to a firm whose employees possess the training and knowledge needed to analyze the data and make a real difference in the center’s financial performance. Outsourcing RCM makes this entire process more efficient with better end results.

Spending time reviewing reports and analytics provides critical insight. Not only does the data offer valuable feedback for the ASC, but having this information can drive change by reducing AR days and tracking collection rate trends. However, internal employees may only have access to canned reports from which they can pull only generalized data. One of the key benefits of outsourcing revenue cycle management is that the RCM provider can develop customized reports and slice-and-dice the most pertinent information for more specified results.

Expertise with third party reporting software allows the RCM provider to pull these specific reports in order to find the root cause of a problem. For example, outsourcing RCM can allow an ASC to determine exactly when and why AR days began increasing so that the center can take steps to reverse this trend.

A management console is a useful tool for seeing various metrics change in real time. The RCM provider can customize each dashboard to display certain key performances indicators (KPIs) that alert the ASC to how well the center is meeting its bottom line.

Some of the top KPIs that can be included in the management console include:

  • Monitoring AR days
  • Collection rate trends
  • Statement lags
  • Charge lags

For each ASC, the RCM provider can set a range that falls between red, yellow and green stages in order to create a visual representation of when issues arise in real time. In some circumstances, it can be useful to compare specific KPIs to industry benchmarks, but success can also depend on the specific center. An RCM provider can determine when it’s best to judge information against these benchmarks and when it is not.