Monthly Archives

November 2016

ASC Revenue Sources

Put the “Revenue” in Revenue Cycle Management from Your Most Important Source: Your Patients

By | Revenue Cycle Management | No Comments

Patients are quickly becoming the top revenue source in ASCs which presents unique challenges.  The days of “send me a bill” or “let’s bill your insurance and see what they pay” are long gone – at least they should be if you expect a steady flow on your revenue stream.

With the growth in high deductible health plans, your facility needs to develop and maintain a strong up-front collections strategy.   A patient’s out-of-pocket costs for their portion of a health care procedure can easily exceed their monthly mortgage payment.  An unforeseen medical procedure can place a significant burden on them.    

Although the situation can seem dire, all hope is not lost!  There are several things ASC personnel can do to proactively position your facility to collect the allowed reimbursement – from insurance carriers and patients.

Let’s start with insurance reimbursement.  When scheduling a patient for a procedure, ideally ASCs should:

  • Be in-network with the insurance carrier. If operating in an out-of-network situation, confirm out-of-network benefits are available to cover the planned procedure(s).
  • Confirm the scheduled procedure is allowed by the patient’s plan.
  • Verify the patient’s plan eligibility and benefits.
  • Obtain prior authorization, if required, for the procedure and implants.

Tools available to assist you with gathering patient specific information include payor web portals and eligibility information through EDI clearinghouses or patient accounting software. 

Using these invaluable tools enhances efficiency in the authorization process.  Take the information you confidently rely on and create your own tools to summarize your unique insurance contract details to serve as easy references for ASC personnel.

Employ features in your patient accounting system to alert facility personnel to nuances that are likely to be encountered.  For example:

  • Enter your fee schedules or grouper rates. Ensure this information is updated when your contracts change or renew.
  • Create reminder pop-up notes to alert schedulers to the need to secure authorizations for specific CPT procedure codes. If this feature is not a component of your current software system, establish your own list of CPT codes requiring authorization and sort it by payor.

Front desk personnel need to be able to calculate a logical estimate of patient financial responsibility and convey that information in understandable terms to their customers.  Information obtained during verification and authorization is necessary to accurately calculate patient estimates.  Identify the following patient specific details:

  • Their annual deductible and how much is remaining to be paid,
  • Their co-payment and/or co-insurance responsibility,
  • Their out-of-pocket maximums, if those limits have been met, and
  • Their in- and out-of-network benefits.

After you’ve collected patient specific details, determine what coverage is available based on your facility’s contract with the payor.  Begin by determining if the procedure scheduled to be performed is allowed in the ASC setting.  Then document the following:

  • Allowable amounts for each procedure code,
  • Multiple procedure limits and/or reimbursement reduction parameters,
  • Case rate caps,
  • Methodology for pricing and reimbursement of implants,
  • Carve-out rates, and
  • Other pertinent contract details.

Don’t overlook the information contained in payors’ newsletters.  This is where they outline policy and reimbursement changes, pre-certification requirements, packaged coding lists, annual fee schedule and grouper updates, etc. 

You should now have the information required to create a useful financial responsibility estimate for the patient.  Review your estimate in detail with the patient prior to the procedure.  Avoid assuming your patient knows the amount of their outstanding deductible or how much they will owe.  Be sure to reinforce that, although you have provided them with the most accurate estimate possible, they are responsible for any amount their insurance doesn’t cover.  Make sure to answer all their questions to the best of your ability and obtain their signature on your financial responsibility policy.

Once the financial responsibility estimate has been reviewed with your patient, it’s time to collect their payment.  Patients are more likely to remit payment at the time of service.  Once they’ve left your ASC, the chances of collecting from them are significantly reduced.  Try to avoid asking, “How much can you pay?”  Instead inquire, “How will you pay for your portion today?”  Improve your ability to collect payment by offering a variety of payment options – cash, HSA or FSA debit cards, credit cards, or automatic bank transfers.  If the patient is unable to submit payment at time of service, consider offering them a low interest health care loan or short-term payment plan.  It is in your ASC’s best interest to only do so, however, if upfront collection options have been exhausted.

If you must offer a payment plan option, have a solid policy in place and adhere to the defined parameters.  Your payment plans should be straightforward and manageable.  Remember to obtain the patient’s signature on the payment plan agreement, then follow the outlined terms.

Review your facility’s upfront collections processes, tighten them up, coach your staff, and work with your patients to create clarity regarding their financial obligations.  Doing this will ensure you maximize collections from your ASC’s top revenue source – your patients.


Carol Ciluffo – Vice President of Revenue Cycle Management

Onboarding New Physicians

ASC Management Tip: Successfully Onboarding New Physicians

By | ASC Management | No Comments

Bringing new physicians onboard can be one of the most exciting and challenging parts of ASC management.  New physicians create opportunities to enhance your center’s initiatives and fuel growth.  Onboarding, however, can present challenges as you orient new physicians while simultaneously managing daily operations.  Despite busy schedules maintaining focus on first impressions is important.  Starting off on the right foot with new physicians is instrumental to establishing lasting relationships for your ASC and physicians alike.  

What can you do to ensure smooth transitions that successfully engage new physicians?  We sat down with Kelli McMahan, VP of Operations for Pinnacle III, for some advice.  Here are her top five tips for successfully onboarding new physicians.

  1. Schedule an introduction & tour: Meet with new physicians before they begin performing procedures at your facility.  Schedule time for them to tour your space.  Introduce physicians to as many staff members, anesthesiologists, and physician partners as possible.  This will help new physicians feel welcome and provide them with friendly faces to turn to or contact should they encounter any issues when they begin work at your ASC.  New physicians may also wish to review available instrumentation and equipment.  Make sure your clinical nurse manager, instrument technologist, and other staff members who are familiar with the potential needs of your new physicians, are available to answer questions during the tour.  Navigation to the locker room, the Pre-Op/PACU area, or ORs can be challenging for new physicians.  Make sure your new physicians leave the tour feeling comfortable finding their way around your facility.
  1. Provide a physician welcome guide: Provide a welcome packet to new physicians when they initially arrive at your facility.  The packet should contain helpful information to successfully orient physicians to your ASC.  Examples include, but are not limited to, your mission statement and core values, directions to your facility, important contact information, leadership bios, and relevant resources for new medical staff members.  Include medical staff expectations from your medical staff bylaws, as well as information on how to start scheduling cases, access transcription services, obtain pre-op and post-op guidelines, and find resources for their patients.  List your facility’s H&P requirements, block time guidelines, dictation instructions, approved procedures, and managed care relationships.
  1. Collect preference cards: Discuss with new physicians the importance of supplying preference cards that are applicable for all the services they intend to offer at your facility.   Useful preference cards provide detailed information on physician preferences for supplies needed, OR set-up, and block time/clinic time.  Preference cards can typically be obtained from any of the other facilities at which physicians worked prior to your ASC.  Obtaining preference cards early will allow you and your staff ample time to prepare for the new cases and ensure the appropriate supplies are available. 
  1. Arrange a meeting between physician scheduling staff & ASC scheduling staff: Your scheduling staff should plan on meeting with your new physicians’ scheduling teams to review scheduling processes.  Your staff should take contact information, instructions, forms, and patient information packets to these meetings.   They need to engage the new physicians’ staff and ask how they currently process scheduling information to other entities.   Doing so will set the stage for both entities to work together to establish a mutually beneficial process for sharing appropriate information efficiently and securely.
  1. Follow-up with your new recruits: When new physicians arrive for their first day at your surgery center, be available to greet them and answer any questions.  If you are not personally able to meet them on their first day, ensure you appoint a qualified designee to fill in on your behalf.  Speaking with new physicians at the end of their first day will help you address issues that arose and instill confidence in your facility.

By following these tips, you can provide smooth transitions for new physicians joining your ASC.  If physicians are satisfied with their initial interactions with your center, they are more likely to perform cases at your center for many years to come.   Your success with new physicians will create a positive reputation and opportunities for more physicians to join your facility.  Simply put, successfully engaging new physicians helps turn your facility into the center of choice.  Wouldn’t having too many physicians to onboard due to your ASC’s growth be a nice “problem” to have?


Kelli McMahan – Vice President of Operations

ASC Tax Strategy

Administrators: Consider Cost Segregation as an ASC Tax Strategy

By | ASC Governance | No Comments

Investigating cost segregation of your depreciable assets may serve your surgery center well.  This ASC tax strategy could allow you to reduce your tax burden and improve your cash flow by shortening your depreciable tax life with acceleration methods. 

How it works

Typically, nonresidential real property assets are given a tax life of 39 years.1 A qualified asset management team can investigate and re-engineer those depreciable assets to three, five, seven or even a fifteen year tax life – all of which are allowable under the IRS tax code.  The good news is that this process is not confined to new property or assets.  As long as the assets have not been fully depreciated, there still may be value to cost segregation.

Basic principle

The basic principle is based on today’s dollar which is assumed to have more value than the future dollar.  Accelerating depreciation increases your tax deduction today – an approach that allows you to take advantage of the better dollar value.

Who does it?

Seek out the services of a cost segregation team and ask them to develop a proposal for your ASC.  According to the IRS, “The preparation of cost segregation studies requires knowledge of both the construction process and the tax law involving property classifications for depreciation purposes.  A preparer’s credentials and level of expertise may have a bearing on the overall accuracy and quality of a study.  In general, a study by a construction engineer is more reliable than one conducted by someone with no engineering or construction background.  However, the possession of specific construction knowledge is not the only criterion.  Experience in cost estimating and allocation, as well as knowledge of the applicable law, are other important criteria.  A quality study identifies the preparer and always references his/her credentials, experience and expertise in the cost segregation area.”2

Many of the larger accounting firms and standalone consulting firms have cost segregation teams that are qualified to complete your re-engineering cost analysis.

Cost

The fees associated with a cost segregation study can be expensive.  Reputable firms will prepare a cost versus return on investment (ROI) analysis for you to review before you commit.  With the political environment subject to change, it may be worth investigating this strategy sooner rather than later.

Conclusion

If your ASC is interested in improving its cash flow through reduction of federal and state income taxes, it may behoove you to investigate cost segregation as a potential strategy.    


Rick DeHart – Principal Partner

1 https://www.irs.gov/publications/p946/ch04.html

2 https://www.irs.gov/businesses/cost-segregation-audit-technique-guide-chapter-4-principal-elements-of-a-quality-cost-segregation-study-and-report

ASC Reimbursement

What Opportunities Can You Leverage to Increase ASC Reimbursement?

By | Payor Contracting | No Comments

Multiple leverage opportunities are available to increase ASC reimbursement. Two that quickly come to mind are generally applicable across all outpatient surgery centers.  First, always recognize the payor needs you.  Second, the payor community consistently strives to find lower-cost alternatives to their members being served at hospitals.  

The Payor Needs You

The payor needs to provide a comprehensive provider network to its members. Many payors offer their members a site-of-service differential to steer members to the most cost-effective and appropriate care setting.  For example, a payor may only require a co-payment from the member for services provided at an ASC, but the member will be subject to more costly co-insurance provisions if the same service is obtained at a hospital facility.  Therefore, the payor needs your ASC to help them accomplish their goal of securing high quality and cost-effective care at the lowest out-of-pocket cost for their members.

Moving Cases from Hospitals to ASCs

Payors are increasingly looking for additional opportunities to move higher acuity cases from hospitals to ASCs.  Why?  Because the difference in cost to both the patient and the health plan can be three to four times greater at the hospital.  Therefore, if your ASC can entice payors with the cost savings benefit of performing higher acuity cases on their members at your facility, you may be able to create a “leverage opportunity” that can produce greater ASC reimbursement on some of your lower acuity procedures.

For example, many commercial payors have expressed interest in having total joint replacements and high acuity spine cases performed in ASCs because they recognize the opportunity for cost savings.  In some instances, you can increase the leverage opportunity by offering to perform these cases at a predictable cost.  Some payors (self-insured plans in particular) wish to transfer the risk associated with implant variations by agreeing to an all-inclusive facility price for each high-acuity case type that is negotiated.

If your ASC is interested in, or required to, negotiate all-inclusive rates, be sure your data accounts for all variable costs (e.g., staff, supplies, implants) and associated frequency factors before heading to the negotiation table.  This includes a solid understanding of the size, number, and frequency of use for each implant type, along with any extraordinary supplies associated with each case.  And therein lies the rub – many ASCs who want to perform these cases aren’t equipped to negotiate prosperous at-risk arrangements.  To combat this, consider hiring a seasoned negotiator who has successfully secured at-risk arrangements – someone who will recognize and be better equipped to understand all the moving parts.  Alternatively, your ASC would be wise to refrain from performing at-risk cases initially, focusing instead on cases falling under fee-for-service arrangements.  Doing so allows you to assemble the necessary utilization data before attempting to negotiate all-inclusive case rates.

While adding high acuity orthopaedic and spine cases requires a capital outlay for your ASC, the added investment should not be overly detrimental if you’re already performing orthopaedic cases.  In that case, chances are your center already has a good portion of the instrumentation and equipment necessary to perform the higher acuity procedures.  If you are starting from scratch, however, you will want to complete a comprehensive feasibility analysis to demonstrate the costs and benefits of offering total joint replacement and/or spine cases at your facility.

In any case, enticing payors with the possibility of performing higher acuity cases on their members at your ASC could not only create a leverage opportunity, it may also add to the payor’s dependence on your ASC.  This puts you in a strong position to obtain higher ASC reimbursement, something you were seeking all along.


Dan Connolly – Vice President of Payor Relations and Contracting