Becker's ASC Review

35 Coding & Billing P resident of Outpatient Healthcare Strate- gies Jessica Nantz discusses how ambula- tory surgery center administrators can identify issues within their revenue cycle process and take control of accounts receivable days. Q: What action steps can centers with a large number of A/R days take? Jessica nantz: Review your processes and peo- ple. Ensure there are clear guidelines established on responsibilities for working government, third-party payers and patient accounts. Listen to and evaluate your collectors: Are they asking for the money? Do they have the personality to be courteous and firm? Have you implemented a system of working the accounts based on dollar amount and date of service? How many accounts is each collector "touching" daily/monthly? Does each account have current notes on the account? Are collection goals posted in the business office? Are you benchmarking your A/R buckets against industry standards? Do you have 5 percent or less in the 120-day bucket? Is there a dedicated person working payment denials and communicating the issues to the coder or biller? If your A/R days are over 45, one or more of these is an issue. With higher deductibles and a larger patient responsibility, there needs to be more at- tention on patient accounts. Do you have a firm policy backed by your board on when to send patients to collections? Have you interviewed and negotiated a reasonable percentage to pay the col- lection company? Are you evaluating the collec- tion company to ensure they are performing the job well on your behalf? The longer money sits on an ASC's balance sheet, unavailable, as A/R, the longer that money can- not be used — it cannot be used for distributions, to pay salaries, bills, make purchases, etc. With tightening reimbursement and rising costs, most ASCs cannot afford to have so much money un- collected. Cash reserves can only last so long, and it is best for an ASC not to rely on using reserves until it is absolutely necessary. It is much better for the business to operate on cash flow obtained through collections. Q: how can ASC owners and administra- tors identify holes in their process and motivate staff to make a change? Jn: ASCs need to thoroughly assess their revenue cycle process and determine the reason(s) why its staff is failing to complete the collections process in a timely manner (if at all). There are many factors that can contribute to high A/R days. These include: • Failure to properly complete clean claims (which leads to denials and payment delays) • Failure to get claims out quickly • Failure to understand payer policies • Failure to have an effective claims follow-up process • Failure to have an effective denials manage- ment process • Failure to collect what patients owe prior to or on the day of the patient's procedure • Failure to educate patients on their financial responsibility prior to their procedure to en- sure they are prepared to cover their portion of the bill • Failure for staff to be held accountable for their performance There are many different ways to motivate staff. The first is to educate staff on what A/R is and why it's so important to the success and viability of the ASC, and therefore the staff 's opportunity for salary increases and bonuses. Following up on collections is an arduous and frustrating process, so simply explaining to staff members how they can make this an easier, more efficient process and therefore free up time to dedicate to other areas should serve as motivation. Sharing A/R data with staff can serve as motiva- tion. By putting A/R days data on display as a chart in an area business office staff will frequent- ly see it — and including improvement goals with this data — will show staff how well (or poorly) they are performing. Some ASCs tie performance bonuses to A/R days. If a bonus system doesn't work well for your ASC, consider having a party or rewarding staff in an- other way when an improvement objective is ac- complished. Q: Typically, where do you see the most opportunity for ASCs to improve and take control of their A/R days? Jn: As noted earlier, there are so many factors that can contribute to high days in A/R. To get A/R days under control requires ASCs to identify which of those factors are most common in their facility, and focus on bringing about improve- ments in those areas. An ASC with large days in A/R may have a major problem in one area or a number of small problems that contribute to the larger problem. What's important is once an ASC identifies a problem(s) and starts to try to bring about im- provements, it needs to closely monitor these efforts and measure their success month after month, sharing the results with the staff. It's also important to never assume that just be- cause a process is going smoothly, this doesn't mean there isn't an opportunity for problems to arise down the road. For example, if a payer changes its coding rules and a staff member fails to take this into account when coding a procedure frequently performed in the ASC, this can lead to an increase in denials. The cause may be glossed over since the ASC did not see any problems with coding prior to the rules change. Therefore, it is imperative for ASCs to keep a close eye on all of its revenue cycle processes and not just those with problems and clearly identifiable areas for improvement. Q: What are the most important A/r benchmarks for ASCs and how can cen- ters ensure they meet or exceed them? Jn: It's not uncommon to hear different numbers thrown around for what are considered "ideal" A/R day's benchmarks. Generally speaking, these figures are usually around 35 days or below for single-specialty ASCs and about 40 days for mul- tispecialty ASCs. But what I believe is more important than try- ing to hit an "industry benchmark" is for ASCs to simply keep working to improve their A/R days. Asking a single-specialty ASC with A/R days at 75 to get to 35 in a few months is unreasonable. It's better to set small goals that will, over time, add up to a big improvement rather than set a big goal that is likely unattainable (and therefore frustrat- ing for staff to try to achieve). It's also important to note that every ASC is differ- ent, and a benchmark that works well for one ASC may not work as well for another ASC, depending upon its specialty mix and payer mix (govern- ment, private, workers' compensation). How to Take Control of ASC A/r Days: Q&A With Jessica Nantz By Laura Miller Jessica Nantz

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