I am often asked, “What if I’m already maximizing ASC reimbursement on my facility’s commercial contracts?” Three responses quickly come to mind. First, how do you know you’re receiving optimal reimbursement? Second, have you capitalized on moving cases from the hospital setting to your facility to create a leverage opportunity on your lower acuity procedures? Finally, if you truly do know you’ve already secured maximum reimbursement, don’t draw fire.
How Do You Know You Are Receiving Optimal Reimbursement?
From my bleacher seat, you don’t know what you’re capable of securing in terms of reimbursement unless you’ve answered at least two questions.
Have you thoroughly analyzed how your major commercial payors reimburse your ASC for the services you routinely provide?
Measuring how your ASC is reimbursed for its top volume procedures is a great place to start. This will allow you to assess your facility’s market parity and identify differences in reimbursement among your key payors. Since differences sometimes create opportunities, this analysis could help you identify ways to increase reimbursement. It could also assist your facility in establishing practical renegotiation goals. Please see my blog “Payor Contracting Tip: How to Determine Market” for additional details on determining market parity.
Has a payor contracting professional evaluated your opportunities?
This starts with hiring an impartial third party who possesses the knowledge and expertise necessary to analyze your facility’s contracts with, and corresponding reimbursement from, commercial payors. This party should also be able to fully negotiate third-party payor contracts. Having this additional set of eyes on your reimbursement when evaluating trends is priceless.
Moving Cases from Hospitals to ASCs
Your facility is most valuable to its payors when it can help them lower their costs. Simply asking for reimbursement increases will not work in your favor. In fact, payors may view this approach negatively and be less likely to grant you the reimbursement increases you are pursuing. However, if payors can save money by moving high acuity cases from the hospital setting to your facility, they may see value in what your facility offers which could facilitate increased reimbursements. Only then will they be willing to dig deeper into their pockets to pay you more for lower acuity procedures. Please see my blog “What Opportunities Can You Leverage to Increase ASC Reimbursement?” for additional details on moving cases from hospitals to ASCs.
Don’t Draw Fire
Once you determine a payor is paying your facility exceptionally well, do not request changes on your contract unless forced to do so by the payor. If, however, a payor is utilizing percent of billed charge as their payment methodology – a rarity among major payors these days – you can offset increasing costs of care by performing modest charge master increases annually.[1] Doing so allows your facility to maximize reimbursement afforded under percent of charge reimbursement without drawing fire because you tried to renegotiate your contract.
[1] Pinnacle III encourages facilities to thoroughly research whether its commercial contracts have charge master increase limitations prior to implementing changes. This will allow them to avoid any unintended consequences of any adjustments made.
Dan Connolly – Vice President of Payor Relations and Contracting
