By Angela Mattioda, Vice President of Revenue Cycle Services, Surgical Notes RCM
Effective revenue cycle management is the most important factor in maintaining
the financial health of an ambulatory surgery center. The revenue cycle
is comprised of several codependent processes that rely on both ASC software
technology and billing expertise. The revenue cycle process begins with
the capture of patient information at the time of scheduling. A complete
solution also includes timely transcription services, precise coding,
claims management, collections, managed care contracting, and strong business
intelligence analytics. A mistake made at any point throughout the revenue
cycle process can negatively impact a facility’s bottom line. To
help keep billing errors at a minimum, here are 10 common revenue cycle
mistakes made by ASCs and guidance to avoid them.
1. Failure to Verify Benefits and Receive Appropriate Authorizations
Prior to the date of surgery, verify eligibility of the claim and the claim
address with the payer to understand coverage and determine the party
responsible for payment. Significant delays in reimbursement may be experienced
if the claim is not sent to the correct managed care plan, independent
practice association, carrier, or home plan. Also, obtain authorizations
for the correct procedure and include implants and costly supplies.
When working with out-of-network carriers, ask specific questions related
to a case’s reimbursement to determine the case’s profitability.
As an example: If the carrier is United Healthcare, ask if it is a maximum
non-network reimbursement plan and if payment is based on the Medicare
fee schedule. If the carrier is Aetna, ask if payment is based upon reasonable
and customary fees or the Medicare fee schedule. Pre-negotiate coverage
with adjusters for any uncovered procedures and/or implant(s) and obtain
commitments in writing.
2. Unnecessary or Inappropriate Discounts
ASCs should not be compelled to reduce a patient’s financial responsibility.
While there are appropriate times to provide hardship discounts, routinely
waiving or discounting patients’ financial responsibilities will
negatively impact the facility’s bottom line. Additionally, this
practice may violate certain insurance contracts as payers expect providers
to collect fees not covered by insurance.
To collect what is owed to the facility, communicate the patient’s
financial responsibility prior to the date of service. Offer payment alternatives
to help patients meet their obligation and retain copies of any such agreement
in the patient chart.
3. Failure to Address Local Coverage Determinations
Common reimbursement delays can be reduced by knowing your procedure’s
LCDs. Understanding the appropriate LCDs is necessary for thorough documentation
which will prevent medical necessity denials.
4. Incomplete Patient Information
To ensure accurate coding and billing, it is imperative to assemble a comprehensive
patient chart. This includes all medical records, patient payment receipts,
promissory notes/payment plan agreements, implant log/invoice, patient
identification, insurance identification, and insurance verification and
Coders should have access to the complete patient record to avoid delays
that will impact reimbursement. The coding team will often need to review
medical records, pathology reports, and history and physical documentation
in order to assign the most appropriate CPT codes, diagnosis codes, and
Note: Provide implant logs or invoices to billers or the revenue cycle
vendor to avoid lost revenue due to unbilled implants.
5. Poor Contracting
One of the fastest ways to damage financial performance is agreeing to
inadequate payer contracts. Skillful contract negotiation helps ensure
that an ASC’s interests are considered fairly and appropriately.
Perform a comparison of the proposed contract to other thirdparty payer
and Medicare rates. When contracts are renegotiated, consider new procedures
to be added, increases in supply costs, and other factors that can improve
Do not overlook procedures that use expensive implants. If the payer does
not separately cover implants, make sure to ask for carve-outs, especially
for higher-cost cases. The entire revenue cycle team should understand
the ASC’s contracts to help ensure proper payment according to negotiated
rates and terms.
6. Lack of Expeditious Appeals Process
Receiving an incorrectly contracted or low OON payment is frustrating.
With ASCs striving to run a profitable, high-quality facility, appealing
claims can feel like a distraction from other critical tasks. However,
the timely appeal of incorrect payments is vital to a facility’s
financial stability. Erroneous payments for contracted carriers should
be addressed quickly before they become a pattern. Ensure that the carrier
has properly loaded the most recent version of the ASC’s contract.
Appealing OON cases is equally important. With OON carriers scrutinizing
claims more closely, it is important that the business office team has
experience working such claims. Many OON carriers will make a low initial
payment followed by a larger percentage of payment during the appeal process.
7. Failure to Monitor Key Performance Metrics
To identify revenue cycle problems early and enact lasting improvements,
ASCs must monitor and benchmark key performance metrics. Without measurable,
actionable data provided by strong business intelligence capabilities,
it is substantially more difficult to determine and correct the root cause
of revenue cycle problems in a timely manner. Examples of reimbursement
delays identified by insights into the revenue cycle include:
- Charge Lag Over 5 Days: If the facility’s charge lag is over five
days, it is important to determine and correct the source of the problem
as quickly as possible. Potential reasons include dictation delays, incomplete
chart packs, or slow submission of claims data.
- Accounts Receivable (A/R) Over 90 Days in Excess of 15 percent: Utilize
reporting data to determine what may be driving an increase in revenue
over 90 days. The source may be attributed to numerous unpaid claims,
patient balances, or unadjusted accounts, or a lack of follow up and maintenance
on the A/R.
It is also critical to know claims rejection and denial percentages to
identify the underlying reasons and take corrective action.
8. Neglecting Payment Posting
Payment posting is a process that should be performed properly and in a
timely manner. Daily payment posting and maintaining a current reconciliation
are strongly recommended. Explanation of benefits should be thoroughly
reviewed and understood by payment posters to help identify indicators
of payment issues or processing errors.
It is also important to stay on top of credit balances to minimize bad
debt write-offs. Balances should be dropped to the secondary insurance
or patient as soon as the claim is correctly adjudicated.
9. Unreconciled Billing
It is very important for ASCs to reconcile billing to ensure all performed
cases are billed. It is equally important to track and understand the
reasons for unbilled cases. It is not uncommon for billers or billing
companies to miss reconciling the billing to the clearinghouse. Rejections
and denials should be monitored through the clearinghouse.
10. Coding Errors
Coding is one of the most important functions in the revenue cycle. Common
errors have the potential to significantly impact financial performance.
These include not coding at the highest level, missing implants, not coding
bilateral procedures, not using the correct modifiers, unbundling, and
not coding for payable supplies. Per Medicare guidelines, CPT codes submitted
should be the same between the surgeon and the ASC. Communicate regularly
with surgeons’ offices to avoid payer delays due to coding discrepancies
If coding is performed at the facility, ensure that the coding team receives
ongoing ASC coding training and education on the most current coding rules
as well as changes in federal regulations. If coding is outsourced, employ
a vendor partner staffed with experienced, certified ASC coders.
Take Control of Your Financial Health
Effective management of the revenue cycle, from scheduling to payment,
by certified, skilled professionals is the single most important factor
to positively impact the financial health of an ASC. To determine the
financial health of your facility, request a revenue cycle assessment
from a leading revenue cycle management vendor to identify current process
and workflow weaknesses.
If staffing a skilled revenue cycle team is a challenge, consider outsourcing.
Significant efficiencies and bottom-line improvements can be realized
by partnering with a vendor that offers leading technology solutions and
services throughout the continuum of care.
On a final note, partner with a vendor that offers complete transparency
and control of the ASC revenue cycle along with key analytics, actionable
insights, recommendations, and proven strategies. Such offerings will
maximize the ASC’s efficiency, profitability, and physician disbursements.
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