Ophthalmology Business

OCT 2013

Ophthalmology Business is focused on business topics relevant to the entrepreneurial ophthalmologist. It offers editorial, opinion, and practical tips for physicians running an ophthalmic practice. It is a companion publication of EyeWorld.

Issue link: http://digital.ophthalmologybusiness.org/i/197424

Contents of this Issue

Navigation

Page 20 of 27

T here are now more than 5,200 ambulatory surgery centers in the United States.1 The number of ASCs continues to grow because surgeons are attracted to the prospects of an additional income stream and enhancing the quality of their work environment. In reality, however, too few physician owners are actually receiving additional income. Problems with cash flow and ASC management concerns often overshadow any improvements in work environment and direct energy away from growing their own practices and delivering quality care to their patients. This happens all too often; approximately one-third of ASCs are profitable, another third are barely breaking even, and the remaining third are actually losing money and may be at risk of a hospital or management company buyout.2 Why do the advantages of ASC ownership fail to materialize? There are a number of reasons why an ASC fails to deliver on its promise—or fails altogether—but most are characterized by failure to adequately manage and control the revenue cycle. In light of the disparities in reimbursement (an ASC is reimbursed at only 56% of what a hospital outpatient department receives for the same procedure) and margins (smaller for the ASC, relative to the hospital), leaving money on the table is a recipe for ASC failure. Control of the revenue involves efficient billing and collections, effective insurance contracting, and keeping abreast of government regulations. All three of these critical functions require specialized attention, something not always readily available to an ASC without outside assistance. Access to these specialists may be one of the best reasons for physician-owned ASCs to outsource revenue cycle management. The possibility of outsourcing billing and collections may be suggested as the "cure" for an ailing ASC's cash flow. Before making a decision, consider what is involved in managing the revenue cycle, as well as the relative merits of keeping them in-house or outsourcing. Billing and collections Upfront collection is one critical— and often neglected—step in this aspect of managing the revenue cycle. High deductibles and co-payments are becoming increasingly common, and collecting from the patient can be more difficult and time consuming. To get out in front of the process, many facilities require patients to pay the amount for which they are responsible on or before the day of surgery. In our experience, facilities that collect on the day of service report a much lower percentage of bad debt than those that wait to see what insurance pays then send a statement to the patient 30 to 90 days after the date of service. • A billing agency can assist with this process from offsite by verifying the patient's insurance before the day of surgery and calculating the patient's estimated financial responsibility. They communicate this information to the patient or to the ASC staff before the day of surgery so that all parties are aware of what will be collected at the time of service. The check-in process is smoother and the focus turns to patient care rather than money. Accurate coding is essential. Unlike professional services that bill using a Super Bill that the physician or scribe has completed, the facility claim is typically coded using the Operative Note dictated by the surgeon. Experienced coders are not all that easy to find and can expect to be well-compensated for their training and experience, but an incorrectly coded claim can be responsible for leaving money on the table and may result in legal liability. • Agencies generally retain experienced coders, require them to be certified, and guarantee the accuracy of their coding services. Follow-up of a rejected claim often proves to be the weak link in the process. Discomfort with asking for payment, working with aging balances, time constraints due to workload, and the attitude that the claim will still be there tomorrow to work on—or not—all result in significant disruptions in the revenue cycle. The number of claims requiring follow-up and the total dollar amount they represent add up quickly. • An agency assigns experienced personnel to work this essential step of the process. Persistence, attention to detail, and dedication to this function keeps those numbers as low as possible. Reporting is a key element in determining how well your facility is doing. Many trade organizations publish statistics and industry benchmarks to which performance can be compared. Days in A/R, collections to charges, and the percent of A/R in each aging category are a few of the more common ratios and averages to monitor monthly, quarterly, and annually. • An agency provides monthly financial reporting that makes it easier for owners to track those numbers and benchmarks and measure how well they are doing. Contracting Medicare and other government payers use the CMS allowable based on location and do not negotiate pricing, but your contracts with commercial payers dictate what your continued on page 22 October 2013 • Ophthalmology Business 21

Articles in this issue

Archives of this issue

view archives of Ophthalmology Business - OCT 2013