Becker's ASC Review

22 EXECUTIVE BRIEFING 2 EXECUTIVE BRIEFING SPONSORED BY Strengthen 3 key ASC growth strategies with revenue cycle outsourcing ASCs striving for growth should perform three essential pro- cesses — benchmarking, monitoring and auditing — often in con- junction with one another. Internal benchmarking helps an ASC determine whether it's achieving its targeted levels of growth. External benchmarking helps an ASC determine whether its performance is in line with, below or exceeding similar surgery centers. Monitoring performance and growth efforts helps an ASC more quickly identify any undesirable changes that can slow or even reverse growth. Auditing an ASC's performance, including key performance indicators, helps paint a clearer pic- ture of exactly how well the center is performing and growing. A good audit will pinpoint areas for potential improvement. Best Practices Crucial to the success of benchmarking, monitoring and audit- ing is to perform them consistently and then evaluate and act upon any discoveries. It's essential that none of these processes be taken for granted. Benchmarking, monitoring and auditing help validate exactly how well an ASC is performing and wheth- er a center is performing the way it needs to in order to achieve and exceed growth goals. Areas performing optimally should not be as closely scrutinized as areas that have not had their performance validated. For internal benchmarking, findings may be positive, such as a surgeon or procedure generating greater revenue than what was expected, or negative, like a piece of capital equipment costing more per procedure than projected. For external bench- marking, ASCs should identify high-quality data from compa- rable centers. Such metrics are available from the Ambulatory Surgery Center Association, state associations, publications like Becker's ASC Review, and other ASCs, the latter of which can often be identified through networking. To best leverage monitoring as a growth strategy, ASCs should focus on operational metrics most essential to achieving de- sired growth. These can include case volume, revenue per case, case costs, supply/equipment costs and hours per case. When conducting auditing, ASCs should ensure the individuals performing the process are not responsible for the areas being audited. The auditor should be unbiased and focus solely on what is reflected in the ASC's data. Key applications: cost savings and renegotiating managed care contracts Two ways that effective benchmarking, monitoring and auditing can make a significant difference for an ASC is by identifying cost-savings opportunities and helping with renegotiating man- aged care contracts. Cost savings. While there are numerous expenses ASCs cannot eliminate, they can find ways to reduce expenses. When an ASC can reduce costs without negatively affecting quality, safety and- staff performance, the savings can be used in a variety of ways, including purchasing capital equipment that can help a center add new procedures and surgeons, providing salary increases that improve staff loyalty and help with recruitment, and increas- ing ownership distributions. ASCs should continually allocate time for administrative staff to assess and benchmark costs and determine where savings may be achieved. While it's worthwhile to focus primarily on high- cost areas, centers should not overlook the potential value that can come from achieving savings in lower-cost areas. An example of a higher-cost area that may be ripe for cost sav- ings is procedure packs — the combination of products used for a specific procedure. Procedure packs should be reviewed regularly to ensure what's included in the pack is exactly what's required for the procedure, with unnecessary items removed. If a pack is used frequently, such optimization efforts can deliver significant, long-term savings. Managed care contract renegotiations. A successful renegotia- tion can provide an immediate and potentially significant bump to the bottom line. Renegotiations are also often essential to re- ceiving coverage — and adequate coverage at that — for new procedures and specialties. Contract renegotiations must be a routine process for an ASC. A best practice is to establish a renewal schedule for each con- tract so they are spread out across the year rather than all at once. A bad renegotiation can greatly diminish the value of a contract. An ASC can find itself in an uphill renegotiation battle with a payer if it comes to the table without KPI metrics and data. The right financial data, gathered through processes including benchmarking, monitoring and auditing, can support an ASC's arguments for reimbursement increases, carve-outs and ex- panded coverage. Quality data can also help with managed care negotiations. If an ASC can present data demonstrating its physicians are safe- ly performing or can safely perform procedures and deliver high-quality outcomes for existing procedures and those not presently covered by the contract, a center will be in a better position to secure payment increases and coverage. ASCs can also benefit from a deep understanding of their data because this will help them model proposed contract rates. Every ASC has a different case mix, so it is important to mod- el all changes against a static population (such as the prior 12 months' actual data for a specific payer) and determine if a small change in a rate for a specific procedure can have an outsized impact on overall revenue. Surgical Notes February ASC EB_1.10.2023.pdf 2 Surgical Notes February ASC EB_1.10.2023.pdf 2 1/25/2023 2:33:02 PM 1/25/2023 2:33:02 PM

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