Maggie Summerfelt, administrator of Advanced Surgery Center in Omaha, Neb., runs a surgery center that performs more than 50 percent orthopedics. Like any orthopedic-driven center, Advanced Surgery Center must focus on negotiating low costs and generous carve-outs in insurance contracts for implants. According to Ms. Summerfelt, some payors in her state have tried to delay payments to the surgery center by as much as 60 days, causing problems because vendors need to be paid before the surgery center is reimbursed.
"Vendors want to be paid in 30 days, and it is taking over 90 days for insurance companies to pay us," she says. 'Fortunately, our vendors are willing to work with us, and fortunately we have negotiated excellent prices on our larger-ticket items." Here she explains five tactics the surgery center uses to balance delayed reimbursement with pressing bills from vendors.
1. Use certified mail to make sure the payor receives your claim. Payors have been known to use underhanded tactics to avoid paying claims on time, such as telling the surgery center the claim never arrived. Ms. Summerfelt says her surgery center has started using certified mail to send claims with implants involved.
"If you send it by certified mail, someone has to sign for it," she says. "When we can see who signed for it, we have a response for the payor when they say they didn't receive it." She says this works in some instances, though payors have also told her that a mail clerk signed for the package and it was never received.
2. Include the operative note without being asked. Payors can also delay payment on claims by asking for additional details about the surgery, Ms. Summerfelt says. A common target is the op note, which surgery centers may not attach to the claim because they don't realize it's necessary. Ms. Summerfelt says she pre-empts payor complaints by attaching the invoice for the implant and the op note the first time around. She says her payor used to accept the typed purchase order for the implant but has since starting asking for the invoice instead.
3. Ask vendors to accept later payment. If you have a good relationship with your vendors — and you should, Ms. Summerfelt says — explain your payor situation and ask them if they'll accept payment later than 30 days. In Ms. Summerfelt's case, vendors were asking for payment within 30 days, but she wasn't receiving case reimbursement until 60 days after the vendors' deadline, causing obvious problems for the surgery center. She says she has convinced her vendors to wait 60 days and put that term in the contract. "They really won't take any harsh measures until after 90 days now," she says.
She says when talking to vendors about your needs, it helps if you are consistently purchasing a large number of supplies from one vendor. She says vendors who provide the prostheses for unicompartmental knee replacements and spinal implants are most amenable to the agreement because they make a lot of money from her center. "Anyone doing high-priced orthopedics should make sure they have a good relationship with the vendor before they start this conversation," she says.
4. Involve physicians in vendor negotiations. Physicians should always be involved in vendor negotiations to achieve the best price, Ms. Summerfelt says. If you can achieve lower vendor prices on implants, you will be better-situated if your payor delays reimbursement. "The surgeon has to have a relationship with the vendor as well," she says. "The surgeon must be strong, because vendors will try to walk over you." She says the surgery center should send a physician who uses the vendor a majority of the time and can use that leverage to negotiate.
5. Avoid Medicaid cases for orthopedics. You may be able to pay your more pressing vendor bills with your reimbursement from Medicare, which is generally more timely, Ms. Summerfelt says. "Medicare is much better," she says. "They have a few codes that are device-intensive codes for spinal stimulators or uni knees, and they'll pay us a large amount," she says. "They don't often delay payment — sometimes they'll ask for an op note or an H&P, but they're much better about it."
She says the same is not true for Medicaid, which provides very low reimbursement — a problem for cases with big-ticket implants. "We barely get the CPT code covered with Medicaid reimbursement," she says. "If we're using high cost implants, we just send those cases to the hospital."
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"Vendors want to be paid in 30 days, and it is taking over 90 days for insurance companies to pay us," she says. 'Fortunately, our vendors are willing to work with us, and fortunately we have negotiated excellent prices on our larger-ticket items." Here she explains five tactics the surgery center uses to balance delayed reimbursement with pressing bills from vendors.
1. Use certified mail to make sure the payor receives your claim. Payors have been known to use underhanded tactics to avoid paying claims on time, such as telling the surgery center the claim never arrived. Ms. Summerfelt says her surgery center has started using certified mail to send claims with implants involved.
"If you send it by certified mail, someone has to sign for it," she says. "When we can see who signed for it, we have a response for the payor when they say they didn't receive it." She says this works in some instances, though payors have also told her that a mail clerk signed for the package and it was never received.
2. Include the operative note without being asked. Payors can also delay payment on claims by asking for additional details about the surgery, Ms. Summerfelt says. A common target is the op note, which surgery centers may not attach to the claim because they don't realize it's necessary. Ms. Summerfelt says she pre-empts payor complaints by attaching the invoice for the implant and the op note the first time around. She says her payor used to accept the typed purchase order for the implant but has since starting asking for the invoice instead.
3. Ask vendors to accept later payment. If you have a good relationship with your vendors — and you should, Ms. Summerfelt says — explain your payor situation and ask them if they'll accept payment later than 30 days. In Ms. Summerfelt's case, vendors were asking for payment within 30 days, but she wasn't receiving case reimbursement until 60 days after the vendors' deadline, causing obvious problems for the surgery center. She says she has convinced her vendors to wait 60 days and put that term in the contract. "They really won't take any harsh measures until after 90 days now," she says.
She says when talking to vendors about your needs, it helps if you are consistently purchasing a large number of supplies from one vendor. She says vendors who provide the prostheses for unicompartmental knee replacements and spinal implants are most amenable to the agreement because they make a lot of money from her center. "Anyone doing high-priced orthopedics should make sure they have a good relationship with the vendor before they start this conversation," she says.
4. Involve physicians in vendor negotiations. Physicians should always be involved in vendor negotiations to achieve the best price, Ms. Summerfelt says. If you can achieve lower vendor prices on implants, you will be better-situated if your payor delays reimbursement. "The surgeon has to have a relationship with the vendor as well," she says. "The surgeon must be strong, because vendors will try to walk over you." She says the surgery center should send a physician who uses the vendor a majority of the time and can use that leverage to negotiate.
5. Avoid Medicaid cases for orthopedics. You may be able to pay your more pressing vendor bills with your reimbursement from Medicare, which is generally more timely, Ms. Summerfelt says. "Medicare is much better," she says. "They have a few codes that are device-intensive codes for spinal stimulators or uni knees, and they'll pay us a large amount," she says. "They don't often delay payment — sometimes they'll ask for an op note or an H&P, but they're much better about it."
She says the same is not true for Medicaid, which provides very low reimbursement — a problem for cases with big-ticket implants. "We barely get the CPT code covered with Medicaid reimbursement," she says. "If we're using high cost implants, we just send those cases to the hospital."
Related Articles on ASC Coding, Billing and Collections:
New York Gov. Cuomo Authorizes Health Insurance Exchange
Consumer Directed U.S. Health Insurance Gains Traction
Regent Surgical Health Promotes Andrew Suba to Revenue Cycle Coordinator