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Lori Tamburo Archives - Pinnacle III

Jan 25
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ASC Case-Costing: Improving the Data Collection Process

ASC Case-Costing: Improving the Data Collection Process

By ASC Management, Leadership No Comments

For an ASC leader, understanding the financial impact of each surgery performed in an ASC is critical to the facility’s success. To achieve this, you must have detailed, accurate data on surgical costs and reimbursements.

Most facilities have software that produces reports which assist with gathering and modeling data. Depending on the resources available at your facility, the difficulty in gathering and using case-costing data will vary.

Avoiding ‘bad’ data

Some management companies, like Pinnacle III, employ a data analyst to provide tools to analyze the cost and reimbursement of cases. However, even with the help of a data analyst, the analysis will only be helpful if the data collection process is accurate and thorough. A common saying among data scientists is, “Garbage in equals garbage out.” For ASCs, if the person pulling the data does not have accurate data to work with, case-costing will be inaccurate.

Here are a few ways to avoid producing bad data.

  • Ensure staff are entering valid data into your software and paying attention to details. Educating staff about the impact of their role in this process is key. Staff mistakes, such as entering equipment cost as supply, can falsely inflate the cost of the case in your analysis. These mistakes are easily avoided by focused staff members who have received adequate training on their function and impact.
  • Update staff compensation. If pay rates aren’t current in your software, the labor costs associated with a case will be incorrect.
  • Engage your materials personnel. The material personnel are vital to keeping information current and accurate. Supply pricing changes must be up-to-date in your software.
  • Keep preference cards current. Make sure hold items are not listed as open. Ensure standard items used on every surgery are correct. This will avoid waste and reduce errors when accounting for what was used during each surgery.
  • Don’t forget supplies used outside of the OR. The supplies used in pre-op and PACU for a patient can seem insignificant. However, accounting for them with the surgery ensures general supply expenses spread among all cases is reduced. Create a pre/post bundle price for each type of surgery that gets added to the supply used. And don’t forget to include anesthesia supplies and drugs, which are often overlooked.
  • Include everything with a fee. Often there will be a charge for something, such as rental for a laser or a tray drop-off, that can be easily left out. If certain items are always used and the fee is known, add them to the preference card and include the fee in your software. Educate staff to facilitate understanding about which items carry a fee to ensure those costs are added to the case.
  • Accurately capture implants and instrumentation. Avoid including reprocessed items as an expense. Ensure fees are not attached to reprocessed instruments or they could be charged to the case as a supply used. Ensure implants used are reflected in your software with the appropriate price.

Final tips for case-costing analysis

There are obvious costs to capture, however, some items may be overlooked, particularly if you are not utilizing a data analyst. Some things to remember when gathering case-costing data are:

  • Include total visit time as well as OR time. The length of time the patient spends in the facility from admission to discharge is an important factor in the overall cost of a case.
  • Use your P&L to tie-in general expenses to be allocated among all cases as an indirect expense.
  • Include the payor mix. This is very important as the payor mix can be a contributing factor to variances among surgeons.
  • There is never too much detail. The process is tedious, but the result will benefit the ASC in many ways. The more ways the data can be sorted, the easier it will be to identify inefficiencies, waste, spending variances, long recoveries, and a variety of trends.
  • Separate supplies and implants. This will allow you to compare surgeons by case and identify opportunities for savings and standardization.

Once the data is gathered, configure it in a way that will allow you to study it from multiple angles (e.g., via a spreadsheet program). Begin with a broad view – by specialty, physician, CPT, or payor, for example. Then examine the subsets – perhaps by specialty/by physician or by physician/by CPT. If you notice significant variances, dig deeper to determine the cause. As you study the data you may find errors. Rather than being frustrated by inaccuracies, use errors as an opportunity to refine your processes and/or systems. Avoid sharing data with your surgeons until you are confident it is accurate. Seek their insights when sharing the information; they may be able to point to additional areas to investigate prior to making operational decisions based on the data.

As you refine your processes and systems, keep your staff and surgeons in the feedback loop. Addressing errors as they arise will create a more seamless process that allows you to focus on other improvement opportunities.

Stay tuned for the second-part of my case-costing blog series. In my follow-up blog, I will further discuss best-practices for analyzing case-costing data. I will also delve into ways to utilize case-costing data, and the benefit of engaging surgeons in the process.

Lori Tamburo, Director of Operations

Dec 18
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Relieving the “Financial Pain” of Surgery via an ASC Financial Counselor

Relieving the “Financial Pain” of Surgery via an ASC Financial Counselor

By ASC Management, Leadership No Comments

With more employers offering high-deductible health plans as an affordable insurance alternative, health care providers recognize their patients’ out-of-pocket financial responsibility is steadily increasing. ASCs often struggle with adeptly handling patient communication regarding this monetary component of surgery. It is challenging enough for most patients to understand the nuances of their health insurance plans without adding the potential stress of thoroughly evaluating their personal financial obligations for each episode of care. Patient satisfaction surveys frequently reflect this stressor. However, this added challenge is easily avoidable with clear, advance communication. Many ASCs have responded to this patient need by adding a financial counselor to their staff.

Educating patients is the most effective way to minimize confusion, maximize time of service collections, and increase patient satisfaction. Reading an explanation of benefits (EOB) can be daunting. Deciphering up to four EOBs for one surgery can be downright overwhelming and, in some cases, shocking. In 2015, 77 percent of consumers reported they were confused by the explanation of benefits they received from their health plan. Seventy-six percent were confused by bills from their providers. By the time a patient is scheduled for surgery, they have often received an estimate of charges and made a payment to their physician’s office, not realizing there is a separate financial obligation to the facility and, in many cases, the anesthesiologist and/or pathologist.

Creating an ASC financial counselor role ensures your facility has a dedicated person responsible for patient communication and financial education in advance of surgery. The ASC financial counselor also plays an integral part in preparing cost-benefit analyses and providing the details to management for consideration.

When contemplating the addition of an ASC financial counselor, items you may want to evaluate include the following:

  • Is the ASC maximizing time of service collections?

    • A financial counselor will improve the percentage of up-front collections through patient education and setting expectations. Advance communication allows patients the time necessary to plan for their financial outlay. By adding an ASC financial counselor, patients receive this information in a timely manner, depending on when the surgery is scheduled.

  • Does the ASC have a high percentage of bad-debt write-offs or accounts in collections?

    • A high percentage of write-offs and accounts referred to collections is indicative of failure to maximize up-front collections or develop formal payment plans. In contrast, a dedicated financial counselor clearly communicates the financial obligation to the patient and formulates a plan for payment in advance of the patient’s episode of care. This includes a written contract if payment is not made in full by the day of surgery, thereby eliminating confusion and creating a firm commitment of payment from the patient.

  • Is the ASC aware of the costs associated with the cases they perform?

    • ASCs, like other businesses, must evaluate which surgeries consistently lose money. The ASC financial counselor is tasked with flagging such surgeries and assisting with minimizing up-front losses. Oftentimes, properly evaluating and documenting these surgeries will provide your payor contracting team with the leverage they need to negotiate proper reimbursement.

  • Is the ASC receiving negative feedback regarding finance on patient satisfaction surveys?

    • Patients will be much more pleased with their overall experience if they fully understand their financial obligation and do not face unexpected or minimal post-surgery expenses when their EOBs arrive.

  • Does the ASC have the case volume to support a full-time or part-time position or can this responsibility be added to an existing employee’s job description?

    • A high-volume center will benefit from adding this position as a full-time role. This person provides a final verification of demographics, as well as confirmation of insurance authorization, leading to fewer avoidable denials. A financial counselor is valuable to every ASC, regardless of size. If the center cannot support this position independently, consider adding the responsibilities to an existing front-desk role.

An ASC financial counselor typically reduces frustration for patients as well as staff. Having a person dedicated to this role improves collections, reduces bad-debt, decreases avoidable insurance denials, and minimizes financial losses due to poor reimbursement, all of which bringing substantial value to the ASC.

Lori Tamburo, Director of Operations