Recipe for Joint-Venture ASC Success
Hospital + Physicians + Joint Venture-Experienced Revenue Cycle Management Provider
By Caryl Serbin, RN, BSN, LHRM
As the president of an ambulatory surgery center (ASC)-focused revenue cycle management (RCM) company and past owner and president of a development, management and billing company that specialized in joint venture (JV) ASCs, I understand the vital role of the RCM company as a neutral and trusted liaison.
As ASCs continue to surge in popularity with patients, physicians, payers and hospitals, more hospital systems and physician groups are joining together to develop JV ASCs. Additional factors contributing to this consolidation include continued regulatory changes, economic pressure due to reduced reimbursement from private carriers and federal and state entities, and increased compliance requirements.
However, both entities — hospital and physicians — often have trust issues concerning how to achieve a fair, balanced partnership concerning RCM. While the hospital and physician group may have different perceptions of what is required for JV success, both typically can agree that a steady revenue stream is essential. Selection by the parties of a "JV ASC experienced" RCM company that can act as an impartial third party and steer RCM processes is often the solution.
Misconceptions Concerning JV ASC Revenue Cycle Management
Let's review some common misconceptions that can hinder RCM success:
Believe hospital software system can perform ASC billing
No systems required for scheduling and insurance verification (as used to having separate departments to perform these functions)
Use their staff to perform ASC's business office duties
Believe practice management software can effectively perform ASC billing
If using RCM company, do not need business office staff
Use some of their office staff to perform ASC duties (not realizing an ASC must be a separate entity)
Now let's look at two case studies where our RCM company was able to serve as an effective liaison between a hospital and physician group and help a JV ASC achieve its financial promise.
Case Study: HOPD Conversion to Joint-Venture ASC
A hospital outpatient department (HOPD) converted to a JV ASC, staying in its same location and employing the same HOPD staff. Approximately a year after transitioning to an ASC, the entity hired Serbin Medical Billing because of severe collections issues.
Following a comprehensive revenue cycle analysis and assessment, we found the following areas that required improvements in order to increase reimbursement:
Employees were not trained in ASC-specific collections methods and there were no ASC-specific policies and procedures in place to assist them.
As insurance verification and patient financial counseling had been previously performed by the hospital, the ASC entity had not staffed these positions, thus neither of these functions were being completed.
In many cases, hospital managed care contracts had not yet been updated to include ASC.
HOPD policy stipulated that no upfront collection of patient financial responsibility was required. This policy was continued in the ASC, leaving all patient balances to be collected post-procedure; however, no patient balance billing had been completed.
Third-party payer claims were being submitted, but there was no follow-up on denials or incorrect reimbursement.
High accounts receivable (A/R) with $200,000-plus over 120 days.
ASC administrator was covering all management positions, with no specific business office supervisor to assist.
Physician investors were not involved in ASC management.
ASC was still using HOPD fee schedule.
No ASC-specific revenue cycle compliance plan was present.
Serbin Medical Billing provided the following assistance and services:
Transitioned revenue cycle functions to our outsourced RCM company.
Recommended business office staff requirements and number of full-time employees required for successful operations.
Assisted in promoting a business office supervisor from current staff and training this individual in management duties.
Provided and helped implement business office policies, procedures, forms and job descriptions specific to an ASC with outsourced RCM.
Assisted new business office supervisor and administrator in training current employees to new positions and responsibilities as per job descriptions.
Set up well-defined guidelines as to which responsibilities are performed by the RCM company and which continue to be performed by the ASC, working toward the goal of having the RCM company become a seamless extension of the ASC's business office.
Provided business office setup checklist to outline specific tasks provided by the business office.
Provided fee schedule review and recommendations.
Loaded new fee schedule into software.
Collaborated with hospital insurance department in adding ASC to hospital contracts or negotiating new ASC contracts.
Loaded third-party payer contracts into software.
Worked as a neutral liaison to improve and maintain a positive relationship between hospital and physicians.
Developed special reports to meet the diverse interests and information needs for both the physicians and the hospital (e.g. benchmarking with like facilities, current trends in reimbursement, analysis of key success factors, multiple facets of A/R)
Worked with hospital information technology (IT) department and assisted in conveying specific IT requirements for the ASC.
Provided and helped implement ASC-specific compliance plan.
The Serbin Difference
This project illustrates the many possible problems facing a JV ASC and demonstrates the need for an experienced and neutral liaison to work with the hospital and the physician investors to help them achieve financial stability and success. Within six months of implementing the above changes, the business office of this converted HOPD-to-ASC had:
reduced A/R by one-half within 90 days;
increased upfront collections from 0 to 85%;
accomplished and maintained current insurance verification and patient financial counseling;
added 12 new ASC managed care contracts;
achieved a nearly seamless integration with our RCM company;
increased patient satisfaction; and
best of all, improved hospital and physician relations.
Case Study: New Joint-Venture ASC
A new, joint-venture, multi-specialty ASC engaged Serbin Medical Billing at the onset of facility development. The hospital and physicians involved felt they needed an independent and impartial third party to provide RCM.
As this was a new ASC, the business office and the administrator were open to suggestions and of assistance we could offer. They requested:
business office policies, procedures, forms and job descriptions;
ASC-specific fee schedule; and
ASC managed care contracts.
Our JV experience, combined with a dedicated and helpful administrator and, in part, the enthusiasm and determination of the physician investors allowed our RCM company to assist in setting up an efficient, smooth-running business office.
We provided the following:
JV ASC-specific RCM.
ASC-specific business office policy and procedure manual with relevant forms specific to an ASC with outsourced RCM.
ASC-specific business office staff job descriptions and tasklists.
Recommendations for business office staff requirements and number of full-time employees required.
Well-defined guidelines as to which responsibilities are performed by the RCM company and which continue to be performed by the ASC, working toward the goal of having the RCM company become a seamless extension of the ASC's business office.
Onboarding checklist tailored to the needs of the client (i.e., a new facility). This outlines tasks to be accomplished (e.g., acquisition of Medicare number, software training, uploading of fee schedule and managed care contracts _and their timeline.
Business office setup checklist for new center.
Insight into pros and cons of available ASC-specific software packages.
ASC-specific fee schedule recommendations.
Loaded fee schedule into software.
Recommended collaboration between ASC and hospital insurance department for ASC managed care contract negotiations.
Loaded third-party payer contracts into software.
Acted as a neutral liaison to maintain a positive relationship between hospital and physicians.
Developed special reports to meet the needs of the hospital and physicians.
Worked with hospital IT department to assist in setting up ASC IT needs.
Benchmarked key success and failure factors with like facilities.
Provided information regarding the ASC market and current trends in reimbursement.
RCM team worked as an extension of ASC's business office.
Analyzed key success factors on an ongoing basis.
The hospital, physicians and ASC administrator were also instrumental in affecting this ASC's success, including achieving:
fair and equitable ownership;
equal board representation;
active involvement by hospital and physician owners;
closing of HOPD to eliminate in-house competition;
immediate consultation and employment of JV-experienced and ASC-specific RCM company to act as neutral liaison and provide reimbursement services; and
hiring of an enthusiastic, hard-working administrator.
The Serbin Difference
With our JV ASC-experienced RCM team, this new surgery center achieved noteworthy success and financial stability within its first year, including the following:
Case volume increased rapidly, resulting in an average of more than 10,000 cases annually.
Averaged well over $1 million dollars a month in collected revenue.
Good reimbursement for implants and approved special equipment, which attracted more orthopedic cases.
Hospital emulation of the ASC's economical use of time and cost containment resulted in improved hospital efficiency, such as operating room turnaround time.
Due to the great success and profitability of this JV ASC, the hospital partner and a separate group of physicians opened a second JV ASC in a neighboring community.
Benefits of Outsourcing Joint-Venture ASC Revenue Cycle Management
When comparing the strikingly different experiences between the ASCs portrayed in the two case studies described above, the noticeable difference is the timeline of bringing on the JV-experienced RCM company that acted as a trusted and neutral liaison to help both parties achieve a smooth development/transition.
JVs between hospital and physician groups frequently encounter stumbling blocks on their quest for success. This can often be attributed to the lack of a neutral party working in the interests of both partners. An RCM company with JV experience can often make the difference between the ASC's failure or success.