1
22
Case Study reflects financial findings/recommendations only –
additional clinical findings/ recommendations are not presented
33
• 14 month old ambulatory surgery
center evaluated because not
meeting projected revenue
• Semi-rural area
• Joint-venture – 7 physicians/
local hospital
• Average case volume - 350 month
4
ABC Surgery Center
• Specialties
- ENT
- GI
- Ophthalmology
- Orthopedics
- Podiatry
- Pain Management
• Payor Mix
- Medicare
- Medicaid
- BCBS
- W/C
- PPOs
- HMOs
- Indemnity
5
ABC Surgery Center
•Number of reasons for negative cash flow:
- Fee schedule far lower than normally
seen in an ASC
- Managed care contracts low with
unfavorable terms
- Improper billing/coding practices
- Managers with no ASC experience
- Inefficient use of staff
- Appropriate structure and policies and
procedures not in place
ABC Surgery Center
6
Findings
• Evaluation of the fee schedule revealed
that most fees were exceptionally low
low compared to Medicare/BCBS ASC
fees for this geographic locality
• Many fees were actually less than
Medicare allowable
• Fee schedule had been based on
physician DRGs
• No consistency in fees – similar
7
procedures had wide variances
ABC Surgery Center
Recommendations
• Develop fee schedule based on
percentage of Medicare group rates
• Carve-outs for higher ticket
procedures
• Decide on additional procedure
discount
• Sample fee schedule given to Board recommended 500% of current
Medicare rates
8
ABC Surgery Center
Findings
• Low rates for an area with little
managed care penetration
• Some reimbursement methodologies
varied from market standard
• Unfavorable terms in contracts
• Most carriers require accreditation
• Some contracts were invalid as not
voted on by Board
ABC Surgery Center
9
Recommendations
• Join local PHO and have them assist in
recontracting for ASC
• Cancel five major contracts whose
reimbursement is based on Medicare rate
• Great managed care market – suggest
renegotiate for reimbursement based on
percentage of billed charges
• Move toward becoming accredited – mark
applications as “Accreditation Pending”
10
ABC Surgery Center
Findings
• Coder with no ASC or surgical coding
experience
• Coding errors included:
- not coding for bilateral procedures
- not coding for multiple procedures
- lack of sufficient modifiers
- improper or no billing of toe implants
- wrong anatomical part
- coding from title – not from body of op note
- no copy of coding history in patient chart
- no cross check to ensure coded all cases
11
ABC Surgery Center
Recommendations
• Hire or outsource to certified coder, or
• Immediate coding certification
training for current coder
• Code from body of operative note –
use additional information when
necessary
12
ABC Surgery Center
Recommendations (continued)
• Rebilling of all claims with coding
errors that result in differences in
reimbursement
• Utilize coding form
• Utilize schedule to make sure all
patients have been coded
13
ABC Surgery Center
Findings
• Biller had no ASC/surgical billing
experience
• No electronic filing – all paper claims
• All business office uses same printer
• Billing for non-ASC services in same
module – cannot separate in reports
• No cross-check between coded cases
and batch report
14
ABC Surgery Center
Recommendations
• Hire experienced biller, or
• Immediate training for current
biller including the following:
CPT codes
ICD-9 Dx Codes
Sx Procedures
Modifiers
Medicare Guidelines
• Electronic submission of all claims
where possible
ABC Surgery Center
15
Recommendations (continued)
• Additional printer near biller to run
claim forms
• Purchase separate software module
to bill for non-ASC services
• Balance billing batch report to
coding forms/schedule to ensure no
unbilled revenue
16
ABC Surgery Center
Findings
• Payment poster not knowledgeable
regarding managed care contract
allowances – no copy of contracts
• Accepts what payor allows – write-offs
are adjusted to match what is paid and
not pre-approved
• Not checking to determine if refund due
• Not balancing to deposit
17
ABC Surgery Center
Recommendations
• Hire experienced payment poster, or
• Provide payment poster with copy of
contracts and ASC fee schedule
• If payment correct, transfer amount to be
billed to secondary insurance or patient
and send
• If not paid correctly or denied, start
denial process
• If overpaid, begin refund process
• Balance payment batch to deposit log
18
ABC Surgery Center
Findings
• Collections not being done
regularly due to lack of business
office staff
• No system in place to determine
oldest accounts and when to place
with collection agency
• High dollar amount over 150 days
old - investigate to determine how
much collectible
ABC Surgery Center
19
Recommendations – Insurance Carriers
• Use Aging by Carrier report to
develop collection schedule
• Check all outstanding balances with
each carrier, oldest first
• Remind carrier of state prompt
payment regulation
• Resubmit bill and/or additional
documentation, if applicable
20
ABC Surgery Center
Recommendations – Insurance Carriers (cont)
• Develop tickler system to follow-up on
promised payments
• Future collections – follow-up in 15 days to
make sure carrier received claim
• Follow-up at 30 days to determine if carrier
is following prompt payment rule
• Document in patient’s account
21
ABC Surgery Center
Recommendations – Patient Accounts
• Collect deductibles and copays up-front
• Perform patient financial counseling
prior to DOS
• Bill patients monthly
• Add notes that increase in language as
account ages
• Contact patients by phone to determine
status and offer payment alternatives,
i.e., credit card, payment schedule, etc.
ABC Surgery Center
22
Findings
• Unbilled revenue due to:
- bilateral procedures–second side not billed
- billing from operative note title only
• Sample coding review - 61 charts revealed
27 errors - estimated loss of allowable net
revenue – $33,396
• Review of accounts over 1 year old which
received no payment and were never
rebilled - $79,124 gross
23
ABC Surgery Center
Findings (continued)
• 12 patient accounts not paid or rebilled
($21,338) – few days short of 12 months –
rebilled immediately to avoid timely filing
• Balances never transferred nor billed to
secondary insurance and/or patient
responsibility
• Coding and billing are non-compliant due to:
- inequity of charges
- inequity of balance billing
- errors
24
ABC Surgery Center
Recommendations
• Check all accounts over one year old to
determine if can be rebilled
• Assess all accounts over 150 days to
determine need for collection, adjustments,
before exceed statute of limitations
• It may be more cost effective to outsource
coding/billing/collections than to retrain and
oversee current employees while trying
remain current and recoup old revenue
25
ABC Surgery Center
POSITIONS* DIRECTLY AFFECTING
REIMBURSEMENT (Not Including Mgmt)
• Scheduler
• Admitting clerk (receptionist)
• Insurance verification specialist
• Patient financial counselor
• Coder/biller
• Payment poster/collector
* Number of employees per position
dependent on caseload
ABC Surgery Center
26
Recommendations/Findings – Business Office
• Currently whoever answers main phone line
schedules patient
• Suggest dedicated phone line for scheduling
• Suggest one employee be assigned to
schedule – others can be back-up
• Have Business Office Manager learn all
business office positions and act as back-up
• Develop business office policies and
procedures
27
ABC Surgery Center
Recommendations/Findings – Business Office
• If maintain billing in-house:
- Add one FTE to business office staff –
best choice – receptionist (lower salary
and less training required)
- Move current receptionist/biller to full
time biller
- Change current coder/biller to coding
and collections
• If outsource billing – no additional staff
needed
28
ABC Surgery Center
Recommendations - Business Office Manager
• Hire experienced ASC Business Office
Manager, or
• Educate current BOM in following areas:
- write-offs
- adjustments
- checking for errors
- collection agency
- refunds
- audits
29
ABC Surgery Center
Findings
• No counter-check of deposits
• No auditing of coding/billing
• Reports invalid as reflect another
business as well as ASC
30
ABC Surgery Center
Recommendations
• Utilize bank lock-box if available
• If doing deposit in-house:
- utilize and balance to deposit log
- separate payment posting and deposits
- BOM should check deposit for accuracy
- BOM or designee make daily deposit
• Weekly audits of coding and billing
• Move other business billing functions into
separate module
31
ABC Surgery Center
• Governing Body approved and
adopted recommendations
• Hired outside management to
institute changes
• Outsourced coding and billing
functions
• Discontinued secondary
business in ASC
• Made other clinical changes not
discussed in this report
ABC Surgery Center
32
• Within 3 months surgery center in the
black for first time
• Gross charges tripled
• Average gross charges per case doubled
• Collections increased more than 250%
• Profit increased more than 400%
• Net income/case increased more than
300%
33
ABC Surgery Center
Case Study reflects financial findings/recommendations only –
additional clinical findings/ recommendations are not presented
34
34
• 10 month old ambulatory surgery
center evaluated to determine
compliance and efficiency and
evaluate billing process
• Semi-rural area
• Solely owned by physician and
non-physician partners
• Average case volume – 80-100 month35
35
XYZ Surgery Center
• Specialties
- Orthopedics – 50%
- Ophthalmology – 25%
- Pain Management – 13%
- Urology – 6%
- Podiatry – 6%
3636
XYZ Surgery Center
• Payor Mix
- Medicare
- Medicaid
- BCBS
- W/C
- PPOs
- Indemnity
• Contract reimbursement is based on a
mixture of:
- percentage of Medicare groups
- discount off billed charges
XYZ Surgery Center
3737
Findings
• Sharing practice management
software with clinic
• Software does not allow loading of
contracts
• Shared schedule with clinic
• Software does not have place for
Medicare groups nor APCs
• Clearinghouse (part of software)
reports not accurate
XYZ Surgery Center
3838
Recommendations
• Consider purchasing ASC-specific
software – need to be able to
schedule separately and load
contracts
• Suggest changing to independent
clearinghouse
3939
XYZ Surgery Center
Findings
• Evaluation of fee schedule
revealed that many fees were less
than some contracts would
reimburse
• No minimum fee – some fees as
low as $200 - $300
4040
XYZ Surgery Center
Recommendations
• May want to review entire fee
schedule based on evaluation and
comparison to reimbursement, as
well as case cost
• Suggest minimum fee of $1200 to
$1500
4141
XYZ Surgery Center
Findings
• ASC does not have copy of most
contracts
• Contracts not loaded in computer
• No insurance matrix available to
determine accuracy of payments
4242
XYZ Surgery Center
Recommendations
• Request copies of all contracts
• If change software, load
contracts and adjust contractual
allowances at time of billing
• Develop insurance matrix and
provide to appropriate billing
personnel
4343
XYZ Surgery Center
Findings
• Physicians doing procedure coding diagnosis coding done by clinic coder
• Back-up coder has no formal coding or ASC
experience – also does billing, payment
posting, collections for both ASC and clinic
• No substantiation with operative note
• Not being done daily
• Most implant invoices and pathology
reports not provided to biller
4444
XYZ Surgery Center
Findings (continued)
• Current coding books present – no CCI
or other unbundling references
• No coding audits being performed
• 50 charts provided for coding review
- 24 charts had errors
- additional charts had insufficient
back-up support for implants
- $4,328 unbilled revenue
- $5,558 over-billed revenue
XYZ Surgery Center
4545
Recommendations
• Utilize certified coder
• Code from operative note
• Track pathology reports and provide
to coder
• Code daily and balance to schedule
• Subscribe to CCI edits to prevent
unbundling
4646
XYZ Surgery Center
Recommendations (continued)
• Separate coding/billing from payment
posting/collections
• Audit to check for unbilled revenue or
over-billed amounts needing refund
• Continued monthly audits to remain
compliant
• Provide information to physicians
regarding detailed dictation
XYZ Surgery Center
4747
Findings
• Claims are not being sent until at
least 7-10 days post surgery
• Batches are not closed daily
therefore not able to balance to
schedule to prevent unbilled revenue
• Payments and charges are
combined in same batches
4848
XYZ Surgery Center
Findings (continued)
• Contract profiles added based
on what is being paid
• ASC staff members unaware of
upcoming 2008 Medicare changes
• No out-of-network policy in place and
no advance notification to payors
• Contractual adjustments not done
at time of billing
4949
XYZ Surgery Center
Recommendations
• Separate payment and charge batches
• Keep necessary back-up of all
charges
• Bill electronically wherever possible
• Develop tracking system to ensure
billing for all implants
5050
XYZ Surgery Center
Recommendations (continued)
• Run clearinghouse reports – verify
claim on file with payor
• Process all claims within 48-72 hours
from DOS
• Notify all carriers of OON status on
claim
• Correct all errors/unsubmitted claims
found on coding review and rebill
5151
XYZ Surgery Center
Findings
• Payment poster wears all billing hats
for clinic and ASC – insufficient time
• A/R is increasing – one week ago hired
additional collector
• Payment poster does not have
knowledge of managed care contract
allowances – does not have copies
• Accepts what payor allows – write-offs
are adjusted to match what is paid
5252
XYZ Surgery Center
Findings (continued)
• Some secondaries have not been billed –
assigned to patient responsibility in error
• Undetermined whether OON payments
going to patient – no attempt to collect yet
• No way to balance to deposit as payments
and charges are in same batch
• Not starting proceedings with denials or
incorrect payments in timely manner
5353
XYZ Surgery Center
Recommendations
• Provide payment poster with copy of
all managed care contracts and/or
contract matrix
• Payments should be posted daily
• Bank deposits should be made daily
• Keep necessary back-up of all
payments received
5454
XYZ Surgery Center
Recommendations (continued)
• Review EOBs and promptly start denial
process for erroneous payment or no
payment
• When posting, compare payment to
original claim to determine accuracy
• Credit balances to be reviewed and
promptly refunded, where applicable
5555
XYZ Surgery Center
Findings
• Collections not being done regularly
due to lack of business office staff
• No upfront collections
• No brochure for patients to outline
financial policy
• No policies/procedures on billing or
related issues
• No accounts have been placed with
collection as no follow-ups done yet 5656
XYZ Surgery Center
Findings (continued)
• No training in Fair Debt Collection
standards
• Medicare claims not crossing over
to secondaries
• 30 day prompt payment law
• Days in A/R 79
• Over 120 – 22% (mostly insurance)
5757
XYZ Surgery Center
Recommendations
• Review accounts that were denied or
paid in error and rebill where
applicable–
timely filing may become an issue
• Follow up on OON claims – determine
which paid to patient and send
statements
• Need to audit Medicare and insurance
payments to detect overpayments –
correct and issue refunds where
XYZ Surgery necessary
Center
5858
Recommendations
• Use aging reports to aid in collections
• Use tickler files
• Evaluate/correct problem with Medicare
secondaries
• Enforce prompt payment rule
• Institute upfront collection of deductible
and copays
• Establish financial policies/procedures
5959
XYZ Surgery Center
Findings
• Administrator has no previous ASC
experience
• No business office manager
• Only two FT business office employees
• Billing staff leased part time from clinic
• Few business office policies/procedures
• Vague job descriptions – no real
accountability
6060
XYZ Surgery Center
Recommendations
• Separate clinic and ASC staff if possible
• If billing remains in-house, recommend
hiring full time experienced coder/biller
for ASC
• Suggested some changes in positions to
cover all tasks
• When caseload increases, recommend
hiring working business office
coordinator who can fill any position as
needed
61
61
XYZ Surgery Center
Findings and Recommendations STAFFING
• Information flow is fragmented
between clinic and ASC – recommend
evaluation and change
• Need specific business office policies
and procedures and job descriptions
6262
XYZ Surgery Center
Findings/Recommendations – COMPLIANCE
• Not enough separation between Clinic & ASC
• Billing and payment posting should be
separate and done by different employees
• Three members of business office staff
should review deposits
• No Business Associate or confidentiality
agreements
• No financial policy information available to
patients
6363
XYZ Surgery Center
Findings and Recommendations –
2008 MEDICARE CHANGES
• Administrator attended educational
seminar on 2008 Medicare changes
• Suggest share information with key
personnel and billing staff
• Evaluation team provided copy of
proposed reimbursement to ASC
6464
XYZ Surgery Center
• Governing body approved and
adopted recommendations
• Outsourced coding and billing
functions
• Made other clinical changes not
discussed in this report
6565
XYZ Surgery Center
• Outsource date - January 1, 2008
• Average caseload 100/month
• Accounts receivable decreased 25%
• Over 120 decreased from 22% to 8%
• Average Collections increased from
$160,000 to $250,000 per month
• Average Gross Charges increased from
$353,860 to $584,055
• Days in A/R decreased from 79 to 44
6666
XYZ Surgery Center
• Inadequate fee schedule
• Poor managed care contracts
• No copies of managed care contracts
• Insufficient staff
• Wrong staff
• No good policies/procedures in place
• Compliance issues
• No consistency in billing practices
• Not billing for implants regularly
6767
Caryl Serbin
239-482-1777
cas@surgecon.com
6868