Today's healthcare providers face heightened scrutiny amid declining levels of reimbursement. In this environment, cutting costs is one way that ASCs can improve profitability. This isn't a sustainable strategy, however, since it can prompt a race to the bottom mentality. A better approach is to increase revenues.
At Becker's ASC 26th Annual Meeting: The Business and Operations of ASCs in Chicago in October, Contego Solutions sponsored an executive roundtable to explore how ASCs can increase their profitability through an out-of-network reimbursement strategy. Peter Brennan, business development manager at Contego, discussed best practices for optimizing reimbursements and mitigating risk in the out-of-network space.
Maximizing out-of-network reimbursements: The legislative foundation
Five to 10 years ago, ASCs would submit 10 out-of-network claims, expecting to get paid well on four or five of them. This would compensate for the five or six claims that were denied or underpaid. Unfortunately, those days are over. Due to increasing pressure from insurers, out- of-network claims — while still viable — are significantly more difficult to process successfully. That's why many providers are seeking assistance from reimbursement experts.
Contego offers ASCs a comprehensive process for optimizing out-of-network claims and appeals by:
- Helping providers leverage the best possible outcomes for patients by driving top-line revenue.
- Helping patients effectively utilize their insurance
Peter Brennan explained, "Contego has a history of working with patients and walking them through the process of using out-of-network benefits, so patients better understand how their benefits work. Patient understanding of how to appropriately use their benefits is critical."
Contego's services are based on two pieces of federal legislation:
- The Employee Retirement Income Security Act (ERISA) of 1974. This law outlines procedures for submitting out-of-network claims and adjudicating subsequent appeals. ERISA provides significant protections to providers. Leveraging ERISA to the full extent of the law is crucial when maximizing financial opportunity in a claim.
- The Patient Protection and Affordable Care Act (PPACA) of 2010. This law enhanced and clarified statuses originally enshrined in ERISA. PPACA provides additional protections to patients. PPACA puts patients in the driver's seat when it comes to holding payers accountable for processing and paying claims properly. Leveraging PPACA is helpful for maximizing the financial opportunity in subsequent appeals.
Contego aligns our process with the provisions of ERISA and PPACA to effectively garner patient engagement and provider reimbursements. Contego has also partnered with a nonprofit advocacy organization that works as the patient's authorized representative.
Mr. Brennan noted, "Most Americans don't fully understand how their healthcare insurance works. Our patient advocacy partner does a great job of helping patients understand how best to use the benefits for which they've paid. Each patient receives one-to-one guidance with a dedicate patient advocate all the way through the claims and appeals process."
Making out-of-network a revenue generator
Contego generates out-of-network revenue for ASCs in two ways: clean claims submissions and appeals. When claims are processed correctly, they are submitted in a certain order with the appropriate documentation. This work requires extreme attention to detail.
Many payers have incorporated algorithms into their portals that drive reimbursements down. Contego navigates around this barrier by submitting claims manually.
According to Mr. Brennan, "Our claims analysts proactively avoid obstructions that payers throw up. Our analysts are engaged in this process all day every day, with no ancillary duties. We pride ourselves on getting it right the first time, every time."
Contego's appeals team has a different set of skills and responsibilities. They analyze information and construct a compelling and cogent argument to payers. To overcome and overturn adverse benefit determinations, they link appeals with applicable legal protocols. This "squeezes more juice" out of appeals when it comes to negotiated settlements.
Predicting revenue based on reimbursement methodologies
In recent years, employers and payers started putting exclusionary language in summary plan descriptions to reduce, prohibit, or diminish out-of-network reimbursements. Each plan is different, so analyzing the summary plan description (SPD) is critical for providers. SPD documents are not available to providers, they are only available to patients or their authorized representatives.
To address this issue, Contego's patient advocacy partners obtains patients' SPDs by acting as their authorized representatives so analysts can look for exclusionary criteria and identify reimbursement methodologies. That information is paired with a complete data repository of CPT codes and location-specific reimbursement rates.
Mr. Brennan said, "It's very important to determine how each patient's procedure will affect your business. Our algorithms give you an accurate calculation of what you can expect to be paid, before surgery is even scheduled. This kind of data allows you to include likely reimbursement rates as a factor in your decision-making about where to perform each surgery."
Contego enables ASCs to separate clinical work from financial tasks. Providers can better focus on the care they are providing. Meanwhile, Contego handles claims and appeals, as well as the front-end patient financial obligations.
Contego seeks to collect all of the patient's responsibility up front. "Our professionals are adept at difficult conversations. They can convince patients of the appropriateness of paying their portion of the costs, while not dissuading them from using your ASC," Mr. Brennan noted.
The value of ASC revenue optimization
By analyzing actual plans and optimizing the front end of the revenue cycle, Contego helps providers to steer the right cases to ASCs, and so, to dramatically increase revenue. The results are clear:
- Deductible collection rates. The average in-network deductible nationally is $634. Contego's professional finance and data team members average nearly $1,500 in deductible collection.
- Podiatric surgery. The average podiatric surgery nationwide results in a reimbursement of around $2,600. Contego realizes a $5,840 reimbursement on average.
- Bigger ticket procedures. For procedures like orthopedic surgery, the national average for reimbursement is around $3,500. Contego obtains an average reimbursement of $11,680.
- Appeal reimbursements. The average facility appeal is usually unsuccessful. Contego's average appeal reimbursement is $3,515.
Mr. Brennan shared two case studies that further illustrated the value that Contego delivers to ASCs.
- In an ACL repair case, Contego determined that the reimbursement methodology was usual and customary and predicted a $12,000 reimbursement for the ASC. The provider received a reimbursement of $7,912 in 22 days. Contego then appealed for underpayment. Seven days later, the ASC received an additional $4,188 in reimbursement.
- In a broken fibula case, the reimbursement was usual and customary. The provider estimated their minimum recovery at $4,500. Contego predicted a $17,000 reimbursement for the procedure, which translated into an attractive profit margin for the ASC. The provider received a reimbursement of $14,924 in 22 days. Contego submitted an appeal for the underpayment and seven days later, the provider received an additional $2,561.
Conclusion
The administration of healthcare shouldn't be boiled down to a simple volume play. Contego works to increase the revenue per patient coming through the door, so ASCs have more choices. As Mr. Brennan observed, "In-network is often the easier way to go, even though it's not the most profitable. Contego uses a dual-track approach to maximize out-of-network reimbursements. Our professionals work on behalf of providers' reimbursements, while our patient advocacy partner works with patients to utilize their healthcare benefits."