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April 2018

ASC Business Office Checkpoints: Improving Your Surgery Center’s Bottom Line

ASC Business Office Checkpoints: Improving Your Surgery Center’s Bottom Line

By ASC Management, Revenue Cycle Management No Comments

If your ASC business office is not meeting their performance metric benchmarks, it may be time to re-evaluate your revenue cycle management policies and procedures. Business office personnel who serve on the front-end (scheduling and insurance verification, for example) and those who serve on the back-end (billing office personnel) must work as a team to achieve your ASC’s key performance indicators.

There are natural checkpoints built in to revenue cycle management. When striving to meet performance benchmarks, you and your staff can take advantage of these natural checkpoints if you know how to use them. For example, both your patient accounting system and clearinghouse have resources available to help identify opportunities for improvement. Additionally, internal tracking processes, including logs and dashboards, allow you to sort through preventable errors and identify staff members who need additional education and training.

Regular evaluation of revenue cycle policies and procedures on the front and back end of your process can assist supervisors, managers, and administrators address weaknesses, improve performance, and enhance your ASC’s bottom line.

Where do you start?

Begin your evaluation at the initial receipt of patient information. Schedulers and insurance verification personnel are at the front end of your financial flow. Accurate data entry is crucial to proper registration, eligibility, and authorization. Data entry errors, including incorrect policy numbers or failure to obtain subscriber date of birth, may create billing delays. To minimize unnecessary rejections and denials, consider developing and using a scheduling checklist.

A scheduling checklist includes guidelines on information your surgery schedulers must collect to ensure there are no omissions or errors when the ASC billing office submits a claim. This tool can reduce time delays in claim filing and eliminate the need to re-work rejected claims. Regular review of clearinghouse rejections can help you create and add to your scheduling checklist by identifying areas in which staff may be prone to making errors.

Monitoring patient benefits

Schedulers and insurance verification personnel also need a solid understanding of patient benefits. Knowing how to determine a patient’s outstanding deductible, predict coinsurance, pre-collect co-payments, and coordinate patient benefits are essential to success. To automate this process, integrate your clearinghouse whenever possible. Insurance websites also provide free tools that assist in determining patient benefits, eligibility, and financial responsibility. Evaluate the accuracy, efficiency, and effectiveness of your scheduling and verification team by running reports from your patient accounting system. Review the total dollars pre-collected each month and challenge your team to break their record the following month. Celebrate their successes! And ensure you educate staff about when and why to use an Advance Beneficiary Notice (ABN).[1]

Establishing self-pay policies for procedures performed at the facility which are not covered by insurance is also important. Ensure your team is familiar with in-network insurance carriers as well as the procedures and implants those carriers reimburse. Insurance carriers regularly publish and update pre-authorization lists. Track and evaluate denials attributable to no authorization, non-coverage due to place of service, and out-of-network write-offs. Set targets for the ASC business office team to increase collections and decrease denials. When target goals are met, reward your team for their efforts. Motivation and direction make a difference when seeking improvements.

What happens after submitting a claim?

Once a case is billed, use denial tracking to identify areas of education for coders and surgeons. Encourage coding staff to take a second look at medical necessity denials. A simple query to the physician can mean the difference between payment and non-payment. Review this information to identify areas for improvement. Denials related to bundling[2] might mean a coder requires additional education on proper modifier use. Medical necessity denials can indicate operative note templates need to be updated or coding staff need additional access to pertinent patient records.

Educate everyone about the cases that can and cannot be performed in your ASC. National Correct Coding Initiative (NCCI) edits and a list of approved ASC procedures can be found on the Centers for Medicare & Medicaid Services (CMS) website or the website for the facility’s Medicare Administrative Contractor (MAC).[3] Centralize front and back end staff access to your approved procedures lists and assign someone to review and update them on a regular basis.

Another checkpoint technique is separating the duties of your charge entry, payment posting, and follow-up teams. This introduces another layer of accountability. As your accounts receivable (follow-up) personnel work their aging reports, they can identify charge entry and payment posting habits that require education or training to improve accuracy and timeliness of account resolution. Payment posters will provide a second set of eyes on write-offs and can supply additional insight into tackling appeals and securing reimbursement. Accounts receivable personnel can also prevent timely filing issues by following up on accounts as soon as 30-45 days after the date of service. Regular reconciliation of unbilled claims in comparison to cases performed prevents missed cases.

Improving the flow in the ASC business office

There are numerous opportunities to tighten the flow of patient information from scheduling to final payment. Cross-checking information at critical points in the ASC revenue cycle reduces billing delays and preventable denials. Separation of duties among ASC billing office staff allows you to build natural checkpoints into your system, preventing costly errors including unnecessary write-offs. Once areas for improvement have been identified, set achievable goals and timelines for your staff, then celebrate their successes.

Bethany Bueno, Director, Billing Operations, Specialty Billing Solutions

[1] An Advance Beneficiary Notice (ABN) is given to patients to forewarn that Medicare may deny payment for their treatment.

[2] A bundling denial occurs when a procedure requires a qualifying procedure be received and covered and the qualifying other procedure has not been performed or adjudicated. A denial related to unbundling occurs when several CPT codes are billed for a service when one inclusive code is available.

[3] A Medicare Administrative Contractor (MAC) is a private health care insurer that has been awarded a geographic area or “jurisdiction” to regionally manage the policies and medical claims for Medicare Part A and Part B Fee-For-Service (FFS) beneficiaries.

Does Securing a Team Partner Make Sense for Your ASC?

Does Securing a Team Partner Make Sense for Your ASC?

By ASC Development, ASC Management, Leadership No Comments

I recently read a theory about teams in the workplace from a variety of sources including General Stanley McChrystal’s book, “Team of Teams,” which entails a process of employing many small specialized teams to tackle large complicated issues. Hiring teams of individuals in unison to accomplish a goal is not new to many businesses. When college football teams change head coaches, for example, an entire staff of ancillary/associate coaches may accompany the new coach. Thus, a new team is hired.

In other cases, a team of individuals is assembled one at a time. For example, I have a friend in the advertising business who has worked as part of a team which was assembled over the years and hired by different agencies to provide writing and graphic design services. The individuals that make up this advertising team were hired one at a time as the agency grew. In music, there are many famous teams of song writers. In the corporate world, companies purchase other businesses and acquire teams to add a service or function they do not currently possess or offer. Think of Google’s acquisition of Android, Nest, Waze, and YouTube

Hiring teams can also occur via outsourcing. Or as I prefer to call it, by securing a “team partner.” Groups seek out organizations to partner with that specialize in ready-built teams in their respective industry, rather than build a team from scratch.

Outsourcing has at times received a negative reputation. Many business leaders question outsourcing anything. However, health care is morphing and changing daily. If a leader does not take the time to assess opportunities or approaches outside their organization’s usual way of thinking, maintaining the status quo could become detrimental and costly. It is perfectly normal, and oftentimes most beneficial, to ask for help in finding and hiring teams from an industry expert.

Why should an ASC consider hiring a team partner?

  1. Locate and tap into existing expertise. Hiring an industry team partner allows an ASC to quickly access qualified candidates with a history of success. While past success is not a sure sign of future success, it is a much better indicator than no past experience or a history of no success. While there are no guarantees a new internal team will succeed, the proven track record of a team partner is generally worth the price – both in dollars and time.
  2. Time is of the essence. You will rarely hear an organization say, “There are no time constraints to launch this project or fix this issue.” While building expertise from within, or tapping into internal resources may seem safe, it typically isn’t expeditious in our fast-paced health care environment. Learning takes time. Becoming an expert takes even more time. Often, learning on the job is not a luxury we possess. A team partner allows for immediate impact.
  3. No team bonding needed. High performing teams have a proven track record of working extremely well together. New teams, on the other hand, need time to create chemistry and build trust. Selecting experienced individuals with the proper skill-set and culture, then creating a team to elicit results and meet expectations is time consuming. Consider hiring an ASC team partner to access established teams. Bringing on an established team provides more timely dividends.
  4. Internal change is difficult. If change was easy, there would not be a multi-billion dollar industry built around helping individuals or organizations with their change management efforts. Many organizations will hire a single individual or even multiple individuals to create a new service offering. Within a few months or a year, those individuals may begin to think and act like everyone else leaving their original goals unaccomplished. Team partnering allows an organization to tap into an alternative corporate culture to advance a new initiative or gain buy-in to a critical mindset change.
  5. Acquire the crossover effect. Organizations experience a period of plasticity in their identity when there is a large influx of new employees. This period of change is known as the crossover effect. The crossover effect can be viewed as positive disruption. The spread of new ideas and new ways of working bring new life to the host organization. Often a newly hired team can affect other, more established teams within the organization via positive disruption.

Business owners and leaders are all striving for gains and improvement in the performance of their people and organizations. In many cases, changing our perceptions, practices, and personnel will be required to achieve those gains. Thoughtfully consider if hiring team partners might help your ASC acquire the individuals needed to facilitate some of those changes in the most expeditious, beneficial manner possible.

Robert Carrera, President/CEO

How ASC Data Analytics Can Benefit Your Facility: Part 2 of 3

How ASC Data Analytics Can Benefit Your Facility: Part 2 of 3

By ASC Management No Comments

(Part 1 introduces the topic as it applies to ASCs, Part 2 provides examples of how analytics can be beneficial in the ASC arena, and Part 3 will walk through the evaluation process to determine when analytics is a good fit for an organization)

In this second installment of our ASC data analytics blog, we will examine specific ways an analytics program can benefit an ASC. While not every type of report mentioned here may be applicable or beneficial to every facility, the following examples will provide a broad base for understanding the potential benefits an ASC analytics program can provide.

ASC Data Analytics Report #1: Case Cost Analysis

The first category of essential ASC data analytics is case cost analysis. Simply put, case cost analysis determines the cost to complete an individual case. With this number determined, the cost of a case can be subtracted from the revenue generated by that case to obtain the associated profit (or loss). Though determining the profit/loss margin of a single case rarely tells a complete story, logically grouping cases into different “pools” can begin to reveal performance of different segments within an ASC. Grouping cases by procedure type, specialty, surgeon, or payor can reveal performance trends.

Although most ASCs likely know their cost per case at a high level already – total operating expenses divided by number of cases – the true value of adding a formal analytics component comes from the ability to drill down into the data. Going beneath the surface allows ASC leadership to identify specific, meaningful areas of concern that can be improved upon to enhance the overall performance of the facility.

Components of a Case Cost Analysis: Supply Cost

An analytics-led case costing report is driven by details. Our initial definition of case cost analysis mentioned “determining the cost to complete an individual case.” Merely examining the expenses identified on an income statement or general ledger will reveal facility-wide trends. However, that will not stratify the data to provide the level of detail needed to make a valid comparison between case types (the “pools” we noted previously). For example, a basic pain procedure shouldn’t be assigned the same case cost as a complex orthopaedic procedure. For true case costing insight, expenses need to be directly tied to individual cases.

To obtain specificity in a case cost analysis, one would typically rely on the ASC’s inventory management system to determine the per-case supply cost. Reviewing surgeon preference cards by procedure type may also be used if the inventory management process at a facility lacks per-case specificity. This should provide an accurate accounting of the various supplies used for each procedure, as well as, the total supply cost per case. Supply cost differences between surgeons or procedure types are immensely important in providing analysis points when reviewing differences in total profitability later in the process.

Components of a Case Cost Analysis: Staff Cost

In addition to supplies, staff time is an important consideration in detailed case cost analysis. Most facilities use a case log to track time individual staff members spend on a specific case. By totaling individual employee costs associated with the episode of care, direct staff cost per case can be identified.

Components of a Case Cost Analysis: Overhead Allocation

While supplies and staffing make up most of the direct costs for a case, facilities should also assess the impact overhead expenses have on their overall profitability. Overhead allocation can also be completed at the case level. This can be done by determining the total amount of fixed costs for a given period and assigning a portion of these costs to each case. Some facilities may choose to assign an equal overhead value for each case. Other facilities may choose to allocate overhead based on a formula representing the relative utilization of a fixed expense (e.g. allocation of overhead based on OR time, total case time, etc.). Using this methodology, a complex orthopaedic case is assigned a higher overhead expense per case than a quick pain procedure. This makes sense when one considers that an orthopaedic case uses relatively more of the rent, utilities, etc., than a pain case. When an ASC desires to understand the true total costs of each of their cases, providing a logical overhead value assignment is a necessary component.

For most facilities, it isn’t possible to track every staff minute and supply back to every patient with 100% accuracy. Typically, the total direct costs (supplies, staff) that can be tied back to an individual case are lower than the direct costs shown on an income statement. The difference in the two amounts is the unallocated variable expense. Unallocated variable expenses often arise from the aggregation of small expenses (pens, tissues, hand soap, etc.) that are difficult to track and attribute to individual cases. These expenses can be distributed on the case level using the same methodology as the overhead distribution.

Interpreting the Case Cost Data

At this point, all the expenses for the facility – clinical supplies, staff, overhead, and unallocated variable expenses – are now linked back to individual cases. Instead of one generic cost per case, each case has its own unique, true cost. When the costs per case are subtracted from the revenue generated by each case, the actual profitability of that case is revealed.

All this data can be sorted, grouped, and filtered in a myriad of ways. With each new view of the data, analytical insights begin to jump off the page.

Cases previously thought to be highly profitably may prove the opposite due to high supply, staff, or overhead costs. Physicians who have been historically viewed as producers of low revenue per case may actually be contributing significantly to the facility’s profit due to lower-than-expected expenses. Entire specialties and payors may be viewed in a new light. The data may reveal that improvement in just a few key procedure types could have a dramatic impact on the overall profitability of a center. The list of potential findings is limitless.

ASC Data Analytics Report #2: Facility Financial Analysis

An ASC data analytics program should be able to provide a routine, comprehensive analysis of a facility’s financial performance. This should include not only reporting current financial metrics, but also comparisons to the same period during the previous year(s), the most recent periods (often called “trailing reports”), and to ASC-specific regional and national benchmarks.

Often, the facility financial analysis can be tied to case cost data. Case cost data can be reported in a combined suite of reports (a dashboard) that provides quick insight into the ASC’s performance. For example, a decrease in overall facility profit may be identified as the result of an increase in lower-profit types of procedures over the same period. Likewise, a decrease in revenue per case but an increase in total ASC profitability – which could be perplexing – may be identified as an increase in procedures with low revenue per case (which dilute the overall facility revenue per case) but a strong profit margin. Adding a data analytics component to standard ASC financial analysis should increase awareness and understanding of the factors influencing an ASC’s financial performance.

ASC Data Analytics Report #3: Clinical Analysis

Adding an ASC data analytics program can also provide benefits to clinical efficiency and patient safety efforts. Case time log data can help paint a picture of efficiency within the OR, as well as provide a workflow analysis of the activities in registration, pre-op, and PACU. An example is a block-utilization report, which details how well a specific surgeon or specialty fills their allotted OR block time. Identifying trends and tweaking block time allocation as necessary can lead to a more efficient, profitable center.

Patient safety data can be gleaned to identify trends that can prevent a bad outcome before it happens. Staffing data is a wonderful resource an analytics program can use to ensure optimal levels of staffing are being utilized. Medication log data is another database that can be tapped into to add to the clinical safety reporting tapestry. For example, analysis of the medication log data may reveal cases where drugs are being prescribed at different stages in the delivery of care that may create unsafe conditions, such as hazardous drug interactions or over-prescription of narcotics. A dedicated analytics program should be able to drive facility profitability, efficiency, and patient safety through enhanced analysis and amalgamation of clinical data.

Investing in an ASC Data Analytics Program

Attaining highly detailed case cost, financial, and clinical efficiency/patient safety insights is a lot of work. Parsing out valuable insights from scattered databases, case logs, and financial reports requires a specialized skillset and experience tailored to the ASC setting for maximum return on investment. The available data often needs to be “scrubbed” (a time-consuming process) to avoid the dreaded “garbage in-garbage out” phenomenon.

As discussed in Part 1 of this series, dedicated analytics programs and personnel are not currently common in many ASCs. Committing the resources necessary to obtain a quality ASC data analytics program must be carefully weighed against the potential benefits. The next part of this series will discuss strategies to help make this determination. As the ASC industry becomes more competitive and pressures from payors continue to rise, the decision to invest in an analytics program is increasingly becoming the correct choice for many ASCs.

Cody Carlin, Director of Data Analytics

Implementing a Patient Texting Program at Your ASC

Implementing a Patient Texting Program at Your ASC

By ASC Development, ASC Management No Comments

Over the last two decades, texting has grown into one of the world’s most effective and accessible communication methods. However, there are still some professional service sectors where more traditional communication (e.g. phone, mail) is more common. It may be surprising to know that some health care entities are beginning to offer patient texting programs, sending important reminders to patients. For those in the ASC industry, this is an exciting opportunity to demonstrate to patients you care about modernizing and updating their delivery of care as well as your interactions with them. Is your ASC poised to take advantage of this chance to show you provide the best and most convenient options?

Here are a few interesting statistics about smartphone and text messaging use:

  • Ninety-five percent of Americans own a cellphone of some kind.[1]
  • Texting is the most widely used smartphone feature, with 97% of Americans using it at least once a day.[2]
  • Ninety percent of all text messages are read within three minutes of their delivery.[3]
  • It takes the average person 90 seconds to respond to a text message.[4]
  • Texting is for everyone. Ninety-four percent of smartphone users 70 and older use text messaging on a weekly basis.[5]

Statistics like these helped inspire our ASC to implement a patient texting program in November 2017. Before launching the program, many of our patients were receptive to the idea of receiving text messages from our ASC. As part of our program, patients are asked if they want to receive text messages from us when providing their medical history through our online portal. An average of about 80 percent of our patients opt in.

We hoped that by leveraging the power of texting, we could improve the experience of our patients and staff.

Developing the Texting Program

Our texting program is managed through an online patient portal vendor. Working with this company, we customized a series of automatic text messages which are sent to patients preoperatively and on the day of surgery. We carefully crafted our messaging and determined the most appropriate time for message transmissions. This “automated clinical pathway” provides instructions and prompts patients to complete important steps in their procedure preparation. Personal health information is never transmitted to maintain HIPAA compliance.

Here is a summary of our text messages:

Two days before surgery, morning. Our first message asks patients to confirm the date and time of their procedure.

If patients are unable to make their appointment, the message advises patients how to reschedule.

If patients confirm their appointment, they receive another automated message reminding them to review their physician’s preoperative instructions.

Two days before surgery, evening. This message provides instructions about what patients need to bring with them on their day of surgery. We also remind them to bring a method of payment and ensure they arrange for transportation.

Day after surgery, morning. Our final automated message thanks patients for allowing our ASC to provide care during their surgery. It also expresses our hope that they are recovering well. If there is a problem with their recovery, the text message instructs patients to call the ASC and ask to speak to a nurse.

Note: Patients can opt out of receiving texts from the ASC at any time. For patients who choose to do so, and those who do not opt in to receiving texts when providing their medical history, we communicate via phone and/or email.

Texting Program Benefits

Due to the widespread use of text messaging, patient texting programs are primed for success. During the first three months of this program at our ASC (November 2017-January 2018), all patients who opted to receive text messages responded to the automated messages. Most confirmed their appointment through the text message; the remaining called the ASC.

Here are some of the tangible improvements your ASC may experience after implementing an ASC patient texting program:

  • Decrease in number and duration of nurse calls to patients (savings of about 10 minutes per call)
  • Decrease in staff hours per case
  • Increase in staff efficiency and satisfaction
  • Increase in patient compliance with physician and ASC instructions
  • Decrease in patient no-shows and cancellations
  • Increase in patients paying for care prior to day of surgery (an unexpected benefit)

Growing the Patient Texting Program

After experiencing the success of a patient texting program, ASCs may consider exploring ways to expand the use of texting. One idea is to incorporate front office staff into the patient texting program. For example, after verifying benefits, front office staff may choose to send an automated text message to patients. The message could indicate patient financial responsibility after verified insurance deductions, and prompt the patient to arrange for payment.

Another solution is sending a one-time text message to patients. This would come in handy if, for example, there was a significant snow storm or catastrophic event and the ASC needed to close. The ASC could send a text to all affected patients on the surgical schedule.

One other area to grow a patient texting program is sending text updates to family members in the waiting area. These would provide an update on the status of loved ones in surgery.

The Importance of a Patient Texting Program

An ASC patient texting program demonstrates to patients your ASC cares about consistently modernizing and updating your health care services with a focus on what works best for patients. This is a powerful message to send to your customers in the ASC industry. Studies show 64 percent of consumers prefer texting versus a phone call for customer service needs and 77 percent of consumers are likely to have a positive perception of companies that use text messaging.[6] In the ever-changing health care market, texting is expected to become an even more valuable communication tool going forward. You can bookmark this as a 2018 ASC industry trend.

Michaela Halcomb, Director of Operations