ASCs today face numerous challenges, many of which involve the revenue cycle. Several challenges are not new — decreased reimbursement, retaining competent business office staff and negotiating successful payor contracts. These issues will need to be addressed every year for the foreseeable future. Some of the top revenue cycle challenges facing ASCs at this time include decreased out-of-network (OON) payors, monitoring and managing an increase in payor denials and slow pays, and collection of patient balances in this recession.
Decreased OON payors
For years, many ASCs have achieved excellent reimbursement from OON payors. Recently the number of OON payors for many facilities has dropped, with several facilities being forced into contracting with payors in order to survive. Those facilities that remain largely OON struggle with OON reimbursement caps, disparate OON deductibles and co-insurance and/or chasing down provider payments sent to patients. Therefore, it is imperative for facilities to manage their OON payors effectively.
A facility's top priority should be to identify OON patients early by performing insurance verification on all patients several days prior to procedure date. Some OON patients may be part of an HMO, in which case the facility would receive no payment from the payor. Then it would be up to the facility to collect from the patient after the procedure was performed, which history has taught us has very limited success. Other patients may carry insurance that imposes caps on OON procedures, often significantly less than contracted carriers and sometimes less than Medicare rates. In this case, the facility may wish to consider having the procedure performed elsewhere.
A policy stating the consequences of a patient cashing and/or keeping an OON reimbursement check should also be a high priority. Most facilities will incorporate this into their financial policy, which patients must sign prior to their procedure. If patients receive OON reimbursement checks, they should be given a maximum of 10 days to return the check to the facility. If the check is not returned, consequences should include immediate referral to a collection agency, a collection fee assessed and/or legal action taken.
Denials and slow pays
Denials and slow pays have increased in many of our facilities. It is important to monitor denials on a consistent basis in order to identify patterns by payors and/or denial reason. Results of these audits may uncover gaps in business office processes that may be the source of the denials, such as incorrect use of modifiers, bundled procedures, incorrect coding and/or missing charges. Business office managers should meet frequently with their administrators on denial patterns so the payment cycle isn't adversely affected. An outcome of these meetings may be the development of claims edits within the billing software or clearinghouse to prevent the denial in the first place.
Centers struggle with slow payment by many payors. Frequently these include the procedures with the highest charges. Once these claims are submitted, payors often come back with additional information requests. In order to counteract this, facilities may opt to send additional information such as the operative report with all high-dollar claims. If the facility is struggling with slow payment by a particular payor, review the contract if applicable. Often the payment terms will be spelled out. Otherwise check with the local state insurance laws.
Collection of patient balances
Collection on patient accounts has never been easy, and in today's economic recession it's even more difficult. That's why facilities need to have a strong collection policy in place and strictly adhere to it. Our centers incorporate several strategies to increase their out-of-pocket collections:
By being proactive and maintaining sound policies and procedures, top revenue cycle challenges such as decreased OON payors, monitoring and managing an increase in payor denials and slow pays and collection of patient balances in this recession can be managed effectively and efficiently.