How well is your ASC’s revenue cycle performing? If you can’t answer this quickly and confidently, you may be overdue for a revenue cycle assessment.
A revenue cycle assessment is a type of audit that examines an ASC’s revenue cycle metrics and processes to identify issues that negatively affect cash flow and can contribute to surgery center failing to collect money it is rightfully owed. It’s best practice for ASCs to undergo revenue cycle assessments at least annually, have them performed proactively (i.e., before cash flow problems become more difficult and time consuming to address) and have them completed by a third party.
However, not all revenue cycle assessments are the same. That’s important to understand because any assessment shortcomings are likely to miss problems and inefficiencies, thus indirectly contributing to unsatisfactory ASC revenue cycle performance. What should you expect from an effective revenue cycle assessment? Nothing less than the following 10 deliverables.
1. Deep dive into performance.
A revenue cycle assessment shouldn’t just look at an ASC’s surface-level performance and metrics. Staying on the surface can significantly reduce the benefits of the assessment as revenue cycle problems are often not evident. That’s why an effective assessment digs into an ASC’s revenue cycle performance. This includes examining critical key performance indicators, including days to bill, days to pay, cash collections, payments greater than 90 days, days in accounts receivable, AR greater than 90 days, denial rate and clean claim rate. The examination should help identify a slew of potential issues, including poor denial and follow-up processes, high self-pay balances, charge entry errors, incomplete operative notes and failure to negotiate or load payer contracts.
2. Comparison of KPIs to standards.
An examination of KPIs is only valuable if you know what those KPIs should be. An effective revenue cycle assessment will include a comparison of your KPIs to industry standards, taking into consideration your surgery center’s specific qualities (e.g., specialties, payer mix) when applicable.
3. Opportunities for improvement.
Identifying problems is one critical part of an effective assessment. Another: sharing steps you can take and recommended practices to address those problems, boost your metrics and better streamline cash flow. The guidance provided should come from experts in ASC revenue cycle performance (more on this later) who base their suggestions and tips on the experiences of performing numerous assessments and working with other like ASCs.
4. Appropriate number of cases reviewed.
A revenue cycle assessment is completed through the assessment of a group of patient accounts. To paint an accurate picture of an ASC’s revenue cycle performance, this figure should usually be around 20 cases, with those cases selected at random. The latter is important because taking a randomized approach helps ensure a variety of accounts are scrutinized, which increases the likelihood of identifying a range of major and minor issues impacting cash flow. The assessment provider should be open to adjusting the number of cases for various reasons, including looking at fewer accounts if major recurring problems are found or upon your request, such as if the assessment is focused on specific accounts associated with a biller.
5. Personalized impact.
How revenue cycle issues and KPI performance impact ASCs will vary by surgery center. For example, an ASC with a high volume of Medicare patients should have a lower days-to-pay KPI than an ASC with more patients covered by commercial insurance since Medicare typically reimburses faster. As another example, ASCs with a high volume of Medicare patients are likely to have lower revenue per case than centers with more patients covered by commercial insurance since third-party payers tend to reimburse at higher rates.
A revenue cycle assessment should be personalized to your ASC and its specific qualities. Such personalization is critical to understanding how those issues identified are affecting and likely to affect your center’s short- and longterm performance.
6. Detailed report.
Following completion of a revenue cycle assessment, your ASC should receive a detailed report. This report should include:
• a summary of the findings;
• an analysis of your ASC’s revenue cycle KPIs and how they measure up with industry standards and best practices; and
• a breakdown of each assessed account’s findings and other critical details.
7. Discussion of findings.
In addition to sending the report, the assessment provider should schedule a time to review it with you. This is to help ensure you understand the findings and recommendations, give you an opportunity to talk through and ask questions about what was discovered, and give the provider a chance to share additional thoughts and feedback.
8. Ability to add a coding audit.
Coding is critical for your ASC’s revenue cycle performance as it helps ensure correct, timely payments for your services. While a revenue cycle assessment can point to potential coding problems hurting cash flow, a coding audit will pinpoint those issues. When you schedule your revenue cycle assessment, you should have the ability to add a coding audit performed in conjunction. By combining the assessment with a coding audit, you will receive an even clearer picture of your performance and areas in need of improvement.
9. Examination of internal and external processes.
If your ASC contracts with an outside billing service or has its billing performed by a management company, undergoing a revenue cycle assessment is still worthwhile as such services are not void of problems. An assessment provider should be willing and able to review both internal and external revenue cycle processes. Even if the assessment reveals that the service you are using is performing well, it’s beneficial to confirm this rather than assume it to be true.
10. ASC expertise.
To truly “turn over every stone,” your revenue cycle assessment provider should have expertise in ASC revenue cycle management. An ASC’s revenue cycle is different from that of other facility types. Someone with knowledge in hospital or practice revenue cycle management, for example, but lacking ASC knowledge is likely to overlook or misinterpret important KPIs and metrics that may point to one or more problems.
Angela Mattioda is vice president of revenue cycle management services for Surgical Notes. Surgical Notes is a nationwide provider of revenue cycle solutions, including, transcription, coding, revenue cycle management (RCM), and document management applications for the ASC and surgical hospital markets. Mattioda oversees the SNBilling RCM service, the fastest-growing component of Surgical Notes’ complete, best-in-class revenue cycle solution offering. Contact Mattioda at angela.mattioda@ surgicalnotes.com.
Making the most of revenue cycle assessments: Q&A with Surgical Notes’ Angela Mattioda
Angela Mattioda is vice president of revenue cycle management services for Surgical Notes.
Question: How frequently should ASCs undergo a revenue cycle assessment?
Angela Mattioda: You typically want to undergo an annual assessment. If you feel that your cash flow is solid and your metrics meet the benchmarks you’ve established, you could move to an assessment every two years.
However, something to consider before making this decision: Your metrics might look strong, but there can still be numerous underlying and less visible issues impacting cash optimization. If you observe any potential problems, stick with annual assessments.
Q: What are some questions ASCs should want answered by an assessment?
AM: First and foremost, is every procedure performed being captured and billed? Are you being paid correctly per each contract? Is your accounts receivable follow-up timely and aggressive, and is escalation taken when needed?
Are issues concerning contracted payments being escalated internally to management and the contract representative so they can be addressed? This is particularly important if there are more than a few underpayments and a pattern seems to be developing.
If you’re an out-of-network center or have a hybrid model (mix of in-network and OON), are strong appeals consistently submitted? What is the success rate of those appeals? What is the collection rate on OON cases, and are you getting paid fairly for those cases? If OON payments are low, what is the cause(s)? Is it the types of policies in your geographic location, such as a high volume of Medicare rate policies? That type of information would be important to determining whether you should pursue going in-network with an OON payer(s).
Finally, how are you doing with meeting benchmarks? How do your ASC’s metrics compare with industry standard metrics and/or metrics of other like centers?
Q: How do ASCs maximize the benefits of a revenue cycle assessment?
AM: Surgical Notes always ends our assessment presentations by sharing tips on actions the ASC can take to make improvements to its revenue cycle management. You should review that advice closely and ask questions. Then, if you perform in-house RCM, make sure you have the proper management to act on those recommendations and improve your revenue cycle. If you’re outsourcing RCM, share the information with your vendor, provide benchmarks you want to meet, and discuss a reasonable timeframe to meet those goals.
Contact Mattioda at angela.mattioda@surgicalnotes.com.
This article was sponsored by Surgical Notes.