Increasing Reimbursement for Ambulatory Surgical Center (Part 2)

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Increasing Reimbursement for Ambulatory Surgical Center
(Part 2)
Monitoring revenue cycle key performance indicators (KPIs) is an essential process for
improving ASC business office productivity. But monitoring alone will not achieve the positive
changes necessary to effectively grow the bottom line. The first article in this two-part series
identified ASC revenue cycle KPIs worth tracking while explaining the importance of
monitoring these KPIs, sharing target benchmarks, and noting warning signs that may indicate
a suffering KPI. This second part dives further down into these KPIs. For some, we note
common problems associated with a poorly performing KPI and describe solutions to help
overcome such obstacles to success. For others, we provide guidance for effectively analyzing
trends.
Denial Rate
Common problems:
 Claim submission errors.
 Failure to submit documentation required by the payer (e.g., invoices, medical
records).
 Billing for procedures not covered per local coverage determinations (LCD) (i.e.,

medical necessity) requirements.
 Front office issues, including failure to secure procedure authorization and incorrect
verification of benefits and coverage specific to the scheduled procedure.
Solutions:
 Perform QA review on claims prior to submission to help ensure accuracy.
 Ensure the charge entry team understands the specific contracts and payer rules on
required documentation for full payment of the claim. Submit documents up front.
 Coding and billing teams should understand when a code will not be payable. If the
coding or billing team identifies a code that will not be payable, the business office
should be notified immediately. If there is a non-payable code issued, conduct a code
review with all medical records to determine whether there is an alternative,
payable, and compliant code. If no such alternate code exists, the provider should
review the case, along with the local coverage determination requirements, to
determine whether an amended report is justified.
 Many front office issues can inflate the denial rate. Authorization is commonly
associated with denials. Denials related to authorization can occur if the insurance
representative fails to provide the correct information, the insurance verifier is not
asking the correct questions, or the scheduled procedure code differs from what was
performed. If the code changed and authorization was required, address it
immediately. Some payers will only change an authorization up to 14 days past the
date of service. If the change is not completed during the 14-day period, the payer
will likely issue a permanent denial.
Denial Reason Trending
How to analyze the metric's trends:
 ICD-10 denials:
Track the types of denials specific to ICD-10 and provide ongoing provider
education.

 Authorization denials:
Include authorization numbers on the claim form to avoid erroneous denials. If
billing a different CPT code from what was scheduled, confirm whether updating
the authorization is permissible with the payer or if a denial is first required
before submitting an appeal. Immediately address instances of insurance
verification team members failing to obtain required authorizations.
 Medical necessity denials:
Provider education is the most important solution to decrease denials for medical
necessity.
Clean Claim Percentage
The clean claim percentage declines each time a claim is submitted and rejected. There are
many possible causes for rejections of claims, which a clearinghouse should identify and share.
If the clean claim percentage decreases below 98%, evaluate the rejection reasons and
implement a process to avoid them.
Percentage of Collections for Cases > 90 Days
Provided that work on AR buckets is consistent, the percentage of collections for cases greater
than 90 days should remain consistent. If collections on older cases decrease, this may indicate
the AR team is failing to focus on older AR and represents a potential follow-up opportunity.
Year-Over-Year Changes
If business is consistent year over year, all metrics should line up. This should allow for
identification of typical lower and higher production/performing months. If volume and
charges are consistent but cash is lower, this indicates one or more issues: contract,
payer/specialty mix, and/or revenue cycle management (e.g., denials, authorizations).

Write-Off Percentages (Bad Debt, Denials, Timely Filing)
How to analyze the metric's trends: Best practice is to create specific journal codes to monitor
back-end adjustments. Break out adjustments to track the type of denial or bad debt write-off.
Monitor adjustments monthly. This will help ensure consistency in patient collection agency
referrals.
Revenue Per Case
Trend revenue per case by financial class and specialty to ensure consistency. If a month drops
significantly, this can indicate an issue with missed implants, missed charges, or a contract.
Credit Balance, Refund Trends, and Collection Agency Referrals
How to analyze these metrics' trends:
 Trending refunds, credit balances, and collection agency referrals is important
to ensure there are no breakdowns in processes. Such processes often fall
through the cracks. Keep them as high-priority responsibilities.
 Resolve patient credit balances monthly. When resolved monthly, refunds will
remain current.
 Monitor for potential government overpayments. Refund any in a timely
manner.
 Review all other insurance credit balances monthly. Note completion of the
review in the account.
Supply Cost vs. Reimbursement
How to analyze this metric's trends:
 Many practice management systems provide visibility into materials
management information and can perform cost analysis to help ensure no loss
of revenue.

 Run necessary reports to identify areas of deficiency and address them
immediately. This may involve losses due to medical necessity denials,
providers using implants not covered per contracts, and other issues.
Cases in AR
How to analyze this metric's trends: Track and run reports on the total number of cases open
in AR. This metric should be fairly consistent, particularly when AR is clean. If the total number
of cases begins to track higher and volume remains consistent, this indicates a failure to
resolve cases in a timely manner.
Patient Balances
How to analyze this metric's trends:
 Billing on the back end is not always necessary if the front office effectively
verifies insurance benefits and calculates patient responsibility. If a patient is
left with a balance after adjudication of a claim, begin sending statements
immediately. Most ASCs send 2-3 statements and make at least 1-2 phone calls
before turning accounts over to collections.
 Track refunds issued and balances owed by patients, broken down by payer.
This will help identify if specific payers are associated with challenges faced by
front office staff in their efforts to calculate patient responsibility.
Knowing KPI-associated problems to watch for, what corrective actions to take when
performance starts to suffer, and how to more effectively assess KPI trends will put an ASC in a
position to achieve meaningful, lasting improvements that can greatly impact short- and long-
term financial stability and profitability.
When it comes to ASC medical billing, Medical Billers and Coders (MBC) is one of the leading
service provider. With our 15+ years of experience in the medical billing domain and with our
proven ASC medical billing services, many surgical centers across the country have overcome
denials and underpayments. Our billing professionals not only specialize in ASC coding and
billing but also incorporate the knowledge throughout the process. To know more about our
ASC medical Billing services you can contact us at 888-357-3226/info@medicalbillersandcoders.com

Increasing Reimbursement for Ambulatory Surgical Center (Part 2)

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