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Payor Contracting

Payor Contracting Tip: How to Determine Market

By Payor Contracting No Comments

First, let’s define what we mean by the market. In a general sense, the market is what customers are willing to pay for a product.  Along the same lines, your ASC’s market is what both governmental and commercial payors are willing to pay for the use of your facility.  In this sense, it is the reimbursement range your ASC receives from its most common payors for the services it most frequently provides.

Your ASC’s definition of market will most likely differ from that of your payors. Commercial payors may define the market as part of a state, an entire state, or even an entire region of the country.  However they define it, it will not likely favor your ASC.  Unlike the payor, who may organize data to support lower the reimbursement they offer your ASC, you’d be wise to organize your reimbursement data to help optimize your ASC’s reimbursement.

How Should Facilities Determine Market?

For starters, most regions typically have four to six major commercial payors. Think of them as the “major league payors.” The other commercial payors are usually “minor league payors.” Your minor league payors may reimburse at a higher rate, but your ASC may only provide care to a fraction of patients from these payors compared to the rest.  When looking at the market, it’s more important to focus on your major league payors – those whose members commonly fill your operating rooms.

Next, look at what each major league payor is reimbursing your ASC for the services you’re routinely providing.  This includes measuring how your ASC is reimbursed for its top volume procedures – the codes representing the bulk of your collective commercial volume.  I generally start by looking at the top 20-25 procedure codes then target the codes with at least 50% of the ASC’s procedure volume.  What you are seeking to obtain from this data is a snapshot of the most likely overall reimbursement composition for each payor. This is a statistic that can be compared to that of your other payors as well as with Medicare. By assembling the data reflecting reimbursement by payor and overall percent of utilization by procedure, you can calculate the average rate of reimbursement. This approach will allow you to define your ASC’s market.  In addition, after compiling reimbursement data, you can drill down to see if, and how, each payor reimburses differently by procedure which will help you establish practical renegotiation goals.

What Should Facilities Do With This Information?

Now that you’ve determined the market, what can you do with this information? You can use the data to leverage payors.  If necessary, you can even submit blinded comparative data to each payor you are dealing with, reflecting where each unfavorably compares to their peers.  The key is leveraging your data wherever, and however, it is advantageous to your ASC.  By navigating this correctly, you can start the process to achieve optimal reimbursement. At the very least, you get a picture of the fluctuations you experience for each procedure reimbursement by payor, while being armed with the ammunition necessary to prompt more productive payor contract negotiations.

Dan Connolly – Vice President of Payor Relations and Contracting

Physician-Hospital Joint Venture

Creating a Firm Foundation for a Successful Physician-Hospital Joint Venture ASC

By Leadership No Comments

Successful physician-hospital joint venture (JV) ambulatory surgery centers (ASCs) should be built on foundations of alignment that allow both parties to reap the benefits of the partnership.  Physicians seek greater autonomy, efficiency, convenience, and potentially more favorable contracts while hospitals (or health systems) want to expand or maintain their relationship with area physician groups.  Hospitals recognize their service continuum must include outpatient strategies to maintain a well-balanced customer base while physicians appreciate the stability and potential leverage health care systems can bring to the project.  Both parties seek to provide quality care at an affordable price and a reasonable return on their investment.

Entering into a JV relationship can be fraught with difficulties.  However, when executed well, both parties can be pleased with the end result and maintain long term satisfaction.  Here are eight building blocks that place JVs on the path to success.

Secure professional help.  Find an independent third party with a successful track record of developing and managing joint venture ASCs who will provide the expertise necessary to avoid pitfalls in the start-up process as well as in the ongoing operations of the JV.  An independent organization provides a neutral voice devoid of the politics that may exist between physician groups, specialties, and/or health systems. They are also able to verify data and information gathered during the initial planning stages – and later on during operations – that JV parties can rely upon to make sound business decisions.

The JV should also secure the services of an experienced health care attorney to draft operating agreements and other organizational documents that will allow the group to avoid potential conflicts.

Set clear expectations.  Make sure the JV partners set clear expectations not only for the final project, but also for the process of completing the project. First, the group should select members to participate in a steering committee.  While these individuals may not end up being the final governing board, they should be able to commit to attending meetings and conference calls. They should be entrusted with voting on key topics when necessary. Decision making time frames should be agreed upon upfront to ensure none of the involved parties is under the impression that others are dragging their feet.

Determine the ownership and governance structure. Is there a compelling reason for one group to have more ownership than another? Is the ownership split in such a way that the attorney and regulatory bodies will not take issue with the proposed structure?

Identify the hospital’s or health system’s role in the project.  The role of the hospital or health system should be thoroughly discussed and clearly determined. What will their contribution be to the project? Are they contributing capital, land, a building, access to controlled lives, purchasing power, leasing of staff, services, and/or payor contracting/relations?

Define the goal of the project.  It is also important to discuss the goal of the project. Is the JV ASC the end all result? Or, is it the beginning of a larger initiative to create closer alignment between all stakeholders?

Perform a thorough feasibility analysis.  If the JV still seems feasible and advisable after these steps have been taken, a thorough feasibility analysis should be conducted.  DO NOT ASSUME IT WILL WORK! This is one of the biggest mistakes groups make. They do not thoroughly vet the concept before proceeding. The feasibility analysis should leave the potential participants with a business plan, payor reimbursement assessment, and a complete financial pro forma.  This information can be used to obtain philosophical buy-in from investors, tell the steering committee they need to go back to the drawing board, or scuttle a bad project.

Pare down the size of the steering committee.  If the project still looks like a go after these stages, reduce steering committee membership down to a more manageable size.  This smaller sized steering committee – which may end up being the ASC’s governing body – is necessary to streamline decision making and set deadlines that will be adhered to. These individuals should be able to commit to timely communication either in person or electronically.

Avoid common joint venture pitfalls.  Unclear expectations can leave some participants disappointed.  Others may feel the project did not turn out as expected or is not meeting their needs.  One group may feel they have been taken advantage of if incentives are not properly aligned among the project participants.    Poor contracting, an over- or under-built facility, poorly staffed, poorly equipped, or poorly capitalized project can leave investors questioning the financial modeling that was performed.

Lastly, the primary cause of problems is poor or non-existent communication.  Surprises are fine, but not when they impact your livelihood or finances. Not every, but many, of the issues in your joint venture project can be avoided with clear, timely communication.

The benefits of entering into a joint venture ASC are plentiful. The difference between a successful JV and one that limps along or is full of strife is often tied to the planning that occurred upfront.  If you get that right, you’ve won half the battle!

Robert J. Carrera – President and CEO

Implant and Supply Reimbursement

Implant and Supply Reimbursement Blunders Nearly Every ASC Commits

By Revenue Cycle Management No Comments

Obtaining reimbursement for implants and supplies represents something akin to successfully navigating a minefield.  You know the lay of the land and presume the payors you hold insurance contracts with do too.  After all, you both possess the same road map – your ASC contract which clearly (ahem!) outlines the reimbursement you’ll receive.  However, when you receive a denial from the carrier for the billable implant or supply, you quickly recognize your interpretations of the contractual terms differ.

While there are distinct differences between an implant and a supply, these terms are often used interchangeably which can lead to significant confusion – even within your ASC.   So, let’s start with some definitions.

Medical supplies refer to the non-durable disposable materials necessary to perform or deliver a health care service in a single episode of care.  These supplies can also be referred to as consumable medical supplies.

Medical supplies:

  • are disposable in nature
  • cannot be used by more than one individual
  • are primarily and customarily used to serve a medical purpose
  • are generally not useful to a person in the absence of an illness or injury
  • are items such as gloves, gauze, dressings, needles, syringes, saline, surgical trays, bandages, skin preps, and other supplies needed during the course of a procedure
  • are typically inclusive to procedure reimbursement and are not separately payable

Most health insurance plans contain exclusions for consumable medical supplies.  Typically, you will not be reimbursed for these products because they are considered integral to the procedure itself.  They are an assumed cost of the surgery.

A medical implant on the other hand, is classified as a medical device manufactured to replace a missing biological structure, support a damaged biological structure, or enhance an existing biological structure. Examples of implants are pins, rods, screws, plates, surgical mesh, ocular lenses, prosthesis, etc.  Many payors define a medical implant as a device or item that remains in the body for six months or more.

Medical implants differ from medical transplants in that they are man-made devices.  Transplants are composed of biomedical tissue. Examples of transplants are allografts, autografts, tendons (musculoskeletal grafts), or corneas.

These differences in definitions may affect your ASC billing reimbursements.

As you know, implants and supplies are expensive and the cost can vary widely from vendor to vendor.  If your employees do not understand which category these items (i.e., implant or supply) fall into, your facility could leave a significant amount of money on the table.

How do you know if you should be billing for an implant or a supply? Start with understanding what each payor contract considers allowable. Most plans contain exclusions for consumable medical supplies although there are some cases where a supply is allowable. A temporary pain pump – a short term drug delivery system for post-operative pain relief – is a great example. 

The Healthcare Common Procedure Coding System (HCPCS) classifies a post-operative pain pump under the “medical and surgical supplies” category. However, because this “supply” delivers an enhancement above and beyond the normal scope of the standard procedure – it may be considered billable by some payors. To secure reimbursement, the item should be mentioned separately in the surgeon’s operative (op) report. 

The op report can also provide clues to other items used in a procedure that might be eligible for billing and reimbursement.  For example, some medications purchased by the facility, such as Botox which is used in occipital injections for migraine headaches, may be reimbursed separately from the procedure when billed properly.  Your coders should be looking for these items in op report narratives and billing for them when applicable.

In large part due to technological advances, implant intensive procedures which were historically confined to inpatient settings are now being allowed in the outpatient ASC setting.  This means outpatient facilities should know when and how to bill for them.  Implants are not cheap and, if left unbilled, could result in a significant amount of lost revenue to the facility.

To ensure you are billing appropriately for implants and supplies that are atypical to a standard procedure:

  1. Audit preference cards to identify supplies normally used in different types of procedures.
  2. Determine which supplies and implants used during a procedure could be viewed as atypical.
  3. Involve your materials management staff in the process – they have specific knowledge of items being ordered for your center. Research these items and assess if they might be billable.  If so, ensure the supply is added to the case implant log and inform your coding and billing team so the proper HCPCS code can be assigned and billed.
  4. If all goes well, you efforts will be rewarded with money in the bank!

To illustrate, let’s say your ASC used temporary pain pumps (a supply) 25 times in the first quarter of the year to provide non-narcotic post-operative pain relief to patients reducing their use of opioids during their recovery process.  The invoice cost of this supply, ordered in a pack of five, is $275 per pump.  If your contracts allow cost plus 10% reimbursement on implants and supplies, your reimbursement would be $302.50 per case.  If reimbursement was allowed on every case, your facility would receive $7,562.50 in reimbursement for those temporary pain pumps alone!

Is this a time consuming project? Yes. However, the rewards far outweigh the initial time investment.  Make sure your ASC is getting the money it deserves for its procedures. Your hard work will pay off in the end.

By Carol Ciluffo – Vice President of Revenue Cycle Management

ASC Turnaround Case Study Key Takeaways

ASC Turnaround Case Study – Key Takeaways

By ASC Management No Comments

Adopting Best Practices to Optimize Performance

One of the best ways to analyze your center’s performance is to re-evaluate your facility’s strategy.  Is that strategy meeting the goals of the center – financially, operationally, and through reimbursements of its negotiated payor contracts?  If not, it may be time to rethink it and create a new plan fit for profitable, successful outcomes.

Best Practices

The most effective and successful ASCs do three things exceedingly well – evaluate case volume, rethink cost structures, and align operational performance and revenue cycle management.

1. Evaluate case volume. A profitable ASC researches and understands the cases that best fit the facility. There are several variables to consider.

Scheduling efficiency – What are the optimal number of procedures to schedule each day?  Which procedures reap the highest profits? Are there procedures that make sense to schedule back-to-back to facilitate flow? For instance, you may want to place a longer procedure between shorter cases to allow staff adequate time to flip rooms and clean the equipment effectively.

Payors – Payors may have an influence on the cases scheduled at the facility.  Do your current contracts contain appropriate carve-outs for specific procedures being performed? Which payors offer the highest reimbursements and are the most proficient to work with?

Physicians – Are your physicians informed on cases that are appropriate to bring to your center? Are you providing your physicians and their staff with adequate information on reimbursement relative to case costing? How do you maintain physician satisfaction?

By evaluating and considering all case volume variables, and by sharing that information with key stakeholders, the ASC becomes more effective in operational performance.

2. Rethink cost structures. Analyze financials on an ongoing basis to identify areas of opportunity and improvement. Reviewing staffing overhead, vendor costs, and supply expenses on a cost per case basis and assessing performance against your established budget are vital to the sustainability and growth of your center. Additionally, you will need to keep a close watch on inventory and purchasing practices to make sure you’re not only getting the best products at the lowest prices but preventing costly product shortages. Be strategic in your financial approach and look for ways to enhance the profitability of your center.

3. Align operational performance and revenue cycle management. Revenue cycle management is a multifunctional process that requires cooperative efforts from administrative, clinical, and billing personnel.  Each of these components is vital to moving the patient account from creation, to point of service, to coding, and finally to payment.  A skilled ASC will integrate all these components into a holistic solution that leads to profitable results.

For more information about the Lutheran Campus ASC Turnaround Case Study or if you are looking for a partner to discuss best practices at achieving optimal performance at your center, please contact Trista Sandoval, Director of Business Development and Physician Relations at or call 970.492.6059.

ASC Turnaround Case Study

ASC Turnaround Case Study

By ASC Management No Comments

When the Lutheran Campus Ambulatory Surgery Center (LCASC) opened in Wheat Ridge, Colorado in late 2005, it appeared poised for success.  Having interviewed several management companies, the joint-venture ASC selected the one it believed would maximize returns for the facility’s investors.  It didn’t take long for visions of a successful ASC to fade.  “We opened the ASC and the management was horrible,” recalls orthopedic surgeon Thomas Fry, M.D.  LCASC experienced losses of more than $1 million in 2006 and more than $1.4 million in 2007.

What Went Wrong                                                                                                                                                            

With LCASC heading toward bankruptcy, Pinnacle III was brought in to conduct an operational audit.  “The center never realized the volume they projected in their pro forma.  Their staffing didn’t meet the needs of their physicians.  They had a difficult time collecting revenue on the cases that were being performed.  They were paying way too much for supplies.  With all of these problems, they dug themselves into a hole and were unable to pay their bills,” says Pinnacle III President & CEO, Robert Carrera.

After reviewing Pinnacle III’s recommendations for change, the leaders of LCASC elected to remove the existing management company and enter into a six-month agreement with Pinnacle III.  When Pinnacle III assumed management in 2008, the center projected a loss of nearly $2 million.

Pinnacle III Quickly Got to Work                                                                                                                                  

“We went out and heavily marketed to physicians,” Carrera says.  “We evaluated existing staff and worked on growing the physicians’ confidence in their team while simultaneously building the staff’s confidence in the ASC’s leadership.  We focused on improvements in a number of other areas as well, including customer service, policies and procedures, materials management, and the facility’s overall culture.”

To address its revenue cycle problems, LCASC contracted with Pinnacle III’s centralized billing office, Specialty Billing Solutions (SBS).  SBS trained LCASC’s staff to adhere to defined collection parameters on new accounts.  Their trained ASC coding and billing staff performed “forensic collections” on existing accounts including re-evaluating all write-offs and reprocessing claims that had not been properly processed to ensure as much money was collected as quickly as possible.

Building on Success                                                                                                                                                            

Due to the renewed focus on facility operations and revenue cycle management, the center ended up cutting its projected 2008 loss by 75 percent.  “We still had some problems to overcome, but the hemorrhaging had stopped,” Dr. Fry noted.  After six months had passed, LCASC extended their management agreement with Pinnacle III who continued to implement improvement measures.

Achieving Profitability                                                                                                                                        

Turnaround efforts continued with LCASC undergoing refinancing and re-syndication in the years that followed.  In 2012, more than $1 million was distributed to the investors.  Similar distributions have continued through the present day.*

“We went from a cash call to paying dividends for four straight quarters and showing a profit,” stated Dr. Fry.  “I relate that totally to the changes that Pinnacle III identified and put into practice.  Specialty Billing Solutions has made a tremendous difference as well.  Their expertise and hard work really turned things around for us. It’s hard not to be happy with the difference between a cash call and a dividend payment.”

*From 2012-2016, distributions to investors have topped $1 million each year.

Pinnacle III has managed The Lutheran Campus Ambulatory Surgery Center for 8 years. For the full white paper, “ASC Turnaround:  Lutheran Campus Case Study,” visit

8 Things ASC Board Members Need to Know About Materials Management

By ASC Management No Comments

As an ASC board member, you are tasked with monitoring your ASC’s total operation. This is no simple feat! It can be difficult to know what questions you should be asking to ascertain whether or not your facility is operating as well as it could be. In an effort to help out, we sat down with our VP of Facility Operations, Kelli McMahan, who provided us with some insight into ASC materials management.

  1. What is your ASC’s medical supplies expense as a percent of its net revenue? Ideally, this figure should come in under 20%. If it does not, determine what’s causing it to be so high and act accordingly.
  1. Are all your physicians using the same supplies or are there any outliers? Sometimes one particular physician routinely uses a specific supply that no one else is using. When supplies can be standardized among all physicians, inventory can be reduced. Because many supplies have to be ordered in bulk, only having to stock one type of gloves in four sizes, for example, creates a more streamlined ordering process, minimizes inventory costs, and frees up valuable storage space.
  1. Does your facility use custom packs and review their contents routinely? A custom pack is a procedural pack that incorporates a majority of supplies used 90% of the time for specific types of procedures. Although most ASCs use custom packs, they tend to overlook the importance of reviewing the contents of those packs on a regular basis. When new procedures are implemented and/or supply preferences change, items that were once used frequently from the packs may now be routinely thrown away. Conversely, an item may be opened for every case that isn’t currently included in the pack. Instead of ordering, stocking, and opening this particular item every time, your ASC may be able to save money by adding it to the custom pack. At a minimum, custom packs should be reviewed annually to ensure they address the facility’s current needs.
  1. Does your ASC contract with a GPO (group purchasing organization) to provide the majority of your basic medical supplies? GPOs are able to extend discounted pricing based on their contracts with suppliers. Make sure your distributor knows you are hooked up with a GPO and loads your discounted pricing into their system. Periodically check the invoice pricing against the contract price to ensure your ASC is receiving the benefit of those discounted arrangements.
  1. Are you ordering inventory using the just-in-time methodology? Items that are used routinely should be ordered according to your case volume to avoid overstocking. Standard orders and delivery dates should be set up with your distributor. Knowing your delivery dates helps you manage supplies on hand. It may be better to place smaller orders two to three times a week rather than placing larger bulk orders which can naturally lead to overstocking.
  1. Have preference cards been updated to reflect supplies actually being used? Reviewing preference cards routinely prevents staff, especially those new to your facility, from opening everything that’s reflected on the card without first checking if the supplies being used have changed. In some cases, the physician no longer uses what’s on the card resulting in opened supplies going to waste.
  1. Have deleted items been moved out of inventory? When items need to be removed from inventory, try to recoup some of the expense. Ask your materials manager to see if your vendor will buy those items back from your ASC or trade in unused items for commodities that continue to be stocked. If your vendor isn’t willing to work with you, determine if other ASCs in the area are interested in purchasing your unused inventory. When all else fails, donate the goods to charity as a tax-deductible contribution.
  1. Are you capturing all the current month’s expenses on your financials? Have materials management personnel look at their purchase order accrual log. If they have not received an invoice for an item that has been ordered and received, the expense can be accrued on the current month’s financial statements. Matching your expenses with your income allows you to more accurately identify financial trends and make sound business decisions.

Knowing what questions to ask about your ASC’s materials management practices not only helps determine where money is being spent but provides insight into the total operation. It can serve as a springboard for discussion with your physician investors about supply use and how best to achieve medical supply standardization. It can create efficiencies that optimize your facility’s operations. Having a thorough understanding of best practices is a great first step toward achieving your goal of a prosperous ASC.

Kelli McMahan – Vice President of Operations

I Want to Develop and Open a Surgery Center, Where Do I Start?

By ASC Development No Comments

Physicians and hospitals alike recognize the role ambulatory surgery centers (ASCs) play in the delivery of quality, cost effective, customer focused health care.  They are a popular business model to employ.  If you are ready to enter into the ASC market, a significant question remains:  Where do I begin?

As is true for most endeavors, developing an ASC should begin with a strategy and plan.  The goal is to not overbuild or under-build your center.  Rather, the goal is to develop a profitable facility with both short-term and long-term growth in mind.  At Pinnacle III, a feasibility analysis is used to assess the potential viability of a project.  It provides a high level, realistic projection of the facility’s financial outcome through the collection of data from interested investors.  The data is used to create the following:

  • Projected revenue
  • Projected case volume
  • Projected case mix, which will determine the medical equipment, staff, and size requirements
  • Estimated expenses
  • Estimated capital
  • Projected profits/losses

This information helps determine whether or not a development project should move forward.

A feasibility analysis is also used to assess a given market’s current managed care contracts. Skipping this part of the process is inadvisable – often, valuable information is obtained during this phase which could very well affect your decision to proceed.   For example, imagine you discover the key PPO for your market contracts with a health care system that operates competing surgery centers.  This PPO might decline the opportunity to align with you believing the current health care system arrangement provides them with appropriate access to care for their customer base.  That lack of expected volume could kill your entire project.

The analysis can be thought of as a “red light/green light” exercise.  A green light indicates the project makes enough sense to proceed.  A red light signifies a project in its current state does not make sense.  It is possible for a feasibility analysis to produce a “yellow light,” indicating that you should proceed with caution.  This could mean that the project would eventually be profitable, but not for many years, or projected net revenue would be marginal at best.  In these instances you will need to go back and see if you can optimize the situation to move the yellow light to a green light.  For example, maybe you need more physicians involved to produce higher revenue numbers or find a way to cut down on real estate costs to minimize your expenses.  The project may not be dead, but it should be postponed until a better outcome is projected.

Some of the things you will want to consider as you move forward into the development phase include, but are not limited to:

  • Do you own land and/or have an existing building? Or do you need to find a site to purchase or space to lease for your facility?
  • What are the capital requirements?
  • What are the legal and regulatory considerations?
  • Should you bring in more specialties that require you to recruit new surgeons?

Beyond just the numbers, conducting a feasibility analysis helps shed light on non-measurable factors that greatly affect your surgery center’s potential for success.  Conducting an analysis may uncover philosophical differences among physicians that could complicate the operation going forward.  For example, one or more of the physicians committed to the project may be invested in multiple ASCs which could severely impact their ability to deliver the case volume necessary to initiate and/or sustain your project.  Because there are many nuanced, potential project pitfalls, it is valuable to consider working with an unbiased, third-party consultant to help uncover roadblocks.

It is no secret the development of an ASC is a complex process. Remember, the feasibility analysis is crucial to proceeding in a thoughtful and objective manner allowing you to avoid costly mistakes and move forward with confidence. Successful planning and preparation help establish the necessary benchmarks that guide your surgery center from initial concept to regulatory certification.

By Trista Sandoval and Lisa Austin


What Does It Take to Run an Effective ASC Board Meeting?

By ASC Governance No Comments

We sat down with Rick DeHart, Principal Partner for Pinnacle III, to gain some advice on what it takes it run an effective ASC board meeting. Rick enlightened us with his 25 years of experience in the ASC industry managing governing boards and running effective meetings. Here is what he had to say:

  1. Preparation is key. Create a detailed, organized agenda that covers the appropriate items needed for board approval and/or discussion. Thoroughly understand your presentation items, such as monthly and quarterly financials. Anticipate questions from stakeholders.  Be prepared to clearly respond with clarifying information.  Conduct a detailed review ahead of time with your team to ensure everyone is familiar with the information that will be presented.                                                                                                                                                                                                    
  2. Send out the agenda in advance. Once the agenda has been created, it is important to distribute it to board members at least 24-48 hours prior to the meeting. This allows everyone time to review the information and/or request additions or changes.                                                                                                                                                                                                                                                
  3. Be organized. Make the best use of the limited time you have available with your board members.  As the leader of the meeting, organizing meeting items appropriately will allow you to cover everything on the agenda and allow for discussion that will lead to sound decisions. Sequence materials in a fashion that is easy to find; avoid putting together packets of information that send everyone scrambling to find their place.                                                              
  4. Stay on task. You will have approximately 90 minutes at most before people lose interest. If possible, consider scheduling meetings for an 1 ½ hours or less.  Keep questions defined and answers focused. Take questions at the end of each agenda item before moving on to the next section.  Restrain yourself and meeting participants as much as possible to ensure you do not go off on tangents!                                                                                                                                             
  5. There will be times when you cannot answer certain questions in the meeting or need to research items further. In those cases, follow up with an email to board attendees noting you are looking into those questions and will provide answers in the near future.  If you are not prepared to respond with meaningful information, don’t wing it!  It’s better to delay a response to ensure it is correct, rather than provide an immediate response that is poorly articulated or, even worse, contains inaccurate information.                                                                                             
  6. Debrief with your team following the meeting. Decide on appropriate next steps and determine if further research is needed to handle unaddressed inquiries.  Assign follow-up items to the appropriate team-members. Keep an eye on whether or not follow-up items are being handled in a timely fashion.  Don’t over-manage the process but be available to step in when necessary.

Feel free to contact Rick for more advice on managing an effective governing board meeting or anything else related to running your ASC:

Picking a Line: Leadership Lessons I Learned from Mountain Biking

By Leadership No Comments

Recently I was mountain biking and thinking about near/far vision. Near/far vision, or focus flexibility, is the ability to change focus from a faraway object to a nearby one, or vice versa. It is vital in a variety of sports.

That same skill is also vital for managers. Not, of course, in the sense of being able to assess a rock or root in front of your wheel as you are setting yourself up for a turn in the trail. But in the sense that your ability to clearly assess what is in front of you, and adjust accordingly, impacts your longer term goals and results.

For example, a physician showing up late for cases is similar to a rock dislodged by another trail rider careening directly into your path. You weren’t expecting it but you suddenly have to deal with it. Not only do you need to relay that information to those who are immediately affected, you have to determine how to minimize its impact on the schedule for the remainder of the day.

Another example – you are reviewing month end accounts receivable data and notice a marked increase in Medicare cases for the month. Ideally, you will use that information to predict the impact the change in payor mix will have on the facility’s available cash in the future.

Perhaps you are budgeting for the new total joint surgeon who “does everything like everyone else.” However, when they arrive and start performing cases, you learn their medication costs are significantly higher than your other physicians. There goes your budget! Now you are scrambling to minimize the impact going forward.

On second thought, maybe it is exactly like avoiding the rocks in your path or sending yourself headlong into a tree!

In the past I worked with young mountain bike racers helping them assess their near/far vision. I taught them exercises to improve their focus flexibility. As managers we can teach ourselves to look for the changes in our business that can knock us off course. We may have to chart an alternate route, but we don’t have to allow the bumps in the road to interfere with accomplishment of our goals. Furthermore, as leaders we can work with our teams to help them understand the importance of constant attention to what is happening now and teach them how doing so can positively impact their results.

By Robert J. Carrera – President and CEO

Authorization Requirements

If I Obtained Authorization for the Surgical Procedure per Payor Requirements, Why Aren’t They Covering the Implant Costs?

By Revenue Cycle Management No Comments

Seems crazy that a payor would authorize a surgical procedure which included an implant then deny payment on the implant, doesn’t it?  Unfortunately, it happens more than you might think.  A payor’s pre-certification and authorization requirements often dictate that implants be pre-certified or authorized in addition to the procedures themselves.

If you feel like the pre-certification and authorization cards are stacked against you, you’re not alone.  The rules of the game can be difficult to follow especially when each payor has its own unique set of guidelines.

Here are some hints on how to play the game well.  The first step is to identify which procedures require implants.  Then research the following to secure maximum reimbursement:

  • Does your contractual agreement with the payor allow separate reimbursement for the implant or is it inclusive to the procedure?
  • If separate reimbursement is allowed, determine what Healthcare Common Procedure Coding System (HCPCS) code will be used on the claim that references the implant. Check the payor’s master pre-certification and authorization lists to see if the HCPCS code for the implant is present.
  • If the HCPCS code is listed, obtain pre-certification or authorization for both the HCPCS and CPT codes prior to performing the service.

For procedures involving implants – especially those requiring pre-certification or authorization – failure to do your research on the front end will likely result in non-payment of the implant.  Most payors do not provide retro authorizations (approval for the implant after the procedure has been performed).  And appealing the denial of payment will not change the outcome if you did not follow the payor’s authorization requirements.  Further, not adhering to requirements specified in the contract results in a write-off of the total charge – you are not allowed to balance bill the patient.

Winning the game is possible!  Identify the procedures your facility performs most often.  Know which procedures involve implants.  Be familiar with the pre-certification and authorization requirements outlined in your contracts.  Understand the reimbursement nuances of your top payors.  Being informed on the front end ensures the dollars you worked so hard to secure actually arrive on the back end.

By Carol Ciluffo – Vice President of Revenue Cycle Management