Overcoming ASC Financial Challenges Through Revenue Cycle Management Outsourcing
By Caryl Serbin, President and Founder, Serbin Medical Billing
With today's rapidly fluctuating political and economic outlook, there are several driving forces causing ASCs to be concerned about their financial stability. Threats to their necessary financial lifeline are abundant.
What measures can you take to sustain the financial viability of your center? One possibility is outsourcing your revenue cycle management (RCM) to industry experts. While this option may not suit every facility, it is important to recognize why the current economic environment makes it a worthwhile consideration and how the process may benefit your ASC.
Understanding the Challenges
Political and economic factors currently affecting the financial stability of ASCs include the following:
Changes in healthcare plans. With the advent and now partial replacement of the Affordable Care Act, patient responsibility for high deductibles and co-payments has increased at an alarming rate. Collecting these large self-pay amounts has become critical to the center's bottom line.
Credit requirements. In this current climate of financial flux, lending institutions may be less likely to extend personal lines of credit. This may not bode well for patients with high deductibles and, in turn, their healthcare providers.
Changing caseloads. Thanks to the changes in healthcare coverage, some providers are noticing a decline in patients choosing to undergo elective surgery. This trend results in a decrease in cases for ASCs. As the economy continues to vacillate, ASCs will have to address these challenges through greater cost-effectiveness in areas including staffing, supplies and scheduling.
Managed care consolidation. The trend of large third-party payers acquiring smaller competitors is expected to continue, leaving the industry to deal with larger — and fewer — payers who are less inclined to negotiate. There are disturbing trends surfacing in contract negotiations, such as payers refusing to reimburse for implants or multiple procedures. Many payers are also implementing more restrictive provider guidelines to limit out-of-network services.
Due to this consolidation of payers and their increasing strength, delays in payment, denials and incorrect allowances are becoming more prevalent. Therefore, it is vital that payment posters remain well educated and alert for any changes and possible payment trends as they occur.
These reimbursement trends will necessitate that centers reassess minimally profitable procedures and evaluate specialties likely to continue experiencing decreases in reimbursement. Optimal coding, while remaining compliant, will become paramount in maintaining a positive cash flow.
Scarcity of experienced billing staff. Historically, RCM has been handled in-house, just like transcription. Over the years, because of the shortage of good transcriptionists, it has become commonplace for facilities to seek outside assistance in the form of outsourcing transcription, whether to a private transcriptionist or a company. Similarly, because of the increasing shortage of certified coders and high-quality billing personnel, ASCs began to seek dependable outside sources to perform these tasks. This trend has grown in popularity as computer technology capabilities have improved to meet privacy criteria established by HIPAA.
Combating asc billing Obstacles to Success
In the challenges facing ASCs listed above, the common theme of each is the increased need for cohesive and comprehensive billing efforts. For coding, billing, payment posting and collections, each team member involved in these processes must remain aware of newly released information from Medicare, Medicaid and managed care organizations. In addition, remaining compliant requires constant monitoring of changes in federal and state regulations and OIG, HIPAA and PCI (i.e., credit card) requirements. Coding and billing requirements are modified frequently, so continuing education is critical.
If your ASC has a talented and aggressive coding and billing team, consider yourself fortunate. By providing ongoing training and resources, these critical staff members will become some of your best investments as they help your facility receive the reimbursement it deserves.
However, if you are struggling in any of the areas related to your billing and collections process, outsourcing might be an option worth exploring. The following questions may help you determine whether outsourcing can be a beneficial investment for your center:
- How much of your ASC's square footage is allocated for a billing staff of two to three people?
- Could you use this space clinically to generate revenue?
- How much are you investing in your billing staff's salaries and benefits?
- How do you handle staff turnover and absenteeism? Do you have staff members who cover the billing staff when they are absent? If so, factor in these staff members' salaries and benefits.
- Is your coding optimized and still compliant? How do you determine this?
- How many days do you average between date of surgery and the claim dropping? Every day of delay is money not in the bank.
- What are your days in accounts receivable (A/R)? Each day's delay in receiving reimbursement makes that payment worth even less. Every additional dollar collected in a timely manner can produce additional interest revenue.
How can the answers to these questions help you determine whether consider outsourcing? The following "billing health questionnaire" will help you to measure the performance — and success — of your billing processes.
In the best-case scenario, all your answers would fall under the benchmarks in column one. Don't be surprised if you had more checks in columns two and three than you anticipated. With the increases in denials and payment errors and the continuous changes in Medicare reimbursement and allowable procedures, it takes a lot more man-hours to properly track obstacles to successful payment and payer changes and respond to them than previously. This is in addition to the time needed for regular RCM tasks.
The questionnaire is meant to direct your attention to important aspects of your billing process and adverse trends and to assist in evaluating your billing needs. Depending on your responses to the questions above, you may need to change your in-house staffing and processes or consider outsourcing to reliable, ASC-specific RCM experts.
asc billing Outsourcing Benefits
While the extent of the benefits from outsourcing depends on how many check marks are in columns one, two and three and the honesty of the responses, the following list outlines possible advantages* to be gained from outsourcing your RCM:
- Outsourcing with an experienced and respected ASC revenue cycle management company offers you access to a full team of reimbursement specialists, including certified coders, experts in managed care and Medicare reimbursement as well as experienced insurance and patient collectors. It is sometimes difficult for centers to find experienced personnel to provide the necessary services to keep their coding optimized and collections current while remaining compliant with state and federal requirements.
- Outsourcing will alleviate disruptions in your RCM process due to vacations, illness, staff turnover and training of new personnel. Recognizing that outsourcing means that your ASC is never without your RCM team is an often-overlooked benefit.
- Outsourcing decreases time spent on the business aspects of patient care and allows facility staff members to focus additional attention on clinical care.
- Optimized ASC coding by an experienced certified coder(s) can increase revenue, off-setting the fee for outsourcing RCM.
- Outsourcing frees your business office staff from answering billing questions as all patient calls are directed to the outsourced RCM company.
- As third-party payers deny or incorrectly pay claims at an ever-increasing rate, your outsourced RCM team can spend the necessary, uninterrupted time to immediately respond and reconcile appeal issues. This will allow your cash flow to remain stable.
- Outsourcing coding and billing creates additional available square footage for possible clinical use because of less in-house staff and on-site storage.
- As the ASC billing process and compliance requirements continue to increase in complexity, your billing staff must continuously monitor rules and regulations in addition to performing their regular coding, billing and collection tasks. Outsourcing transfers the responsibility of these time-consuming processes and provides you with peace of mind that an experienced RCM team is closely monitoring compliance requirements.
* Benefits may vary by RCM company.
If your center is considering outsourcing, more than likely your A/R is in arrears. Outsourcing your ASC revenue cycle management can lower the days your money remains uncollected by detecting incorrect or denied payments and immediately initiating necessary appeals. In addition to optimizing coding, timely and effective collection follow-up can convert your revenue cycle department to a profit center as opposed to a cost center.