GENASCIS, a provider of billing, revenue cycle management services and supporting technologies for ambulatory surgery centers, recently presented a free webinar titled, "Keys to Transforming Surgery Centers Into a Profitable Business."
The speakers were Jim Freund, senior vice president of business development, Ken Bulow, COO, and Matt Searles, managing partner of Merritt Healthcare.
Jim Freund began the webinar by introducing a series of essential topics for ASC profitability, including:
• Common challenges and roadblocks affecting ASCs
• Steps to understanding the overall state of your business
• Direct steps and key solutions to overcoming mistakes and challenges
• Practices and essential tools to drive financial performance
After several decades of unprecedented change and growth, Mr. Freund says the ASC industry is experiencing its first bout of real challenges, as the economy, healthcare reform and other factors combine to put financial pressure on facilities. ASCs across the country are facing myriad of obstacles, including compliance and regulatory requirements, case volume and case profitability challenges, supply and staff management, reimbursement pressures, revenue cycle issues, complex payor contracting processes and proper ASC governance.
According to Mr. Freund, operating a successful ASC means paying attention to a variety of factors and continually changing. ASC leaders should understand costs and their impact on profitability, especially how costs and profits differ from case to case and physician to physician. They should keep a close eye on the management of the business office to ensure revenue is not lost through sloppy accounting. They should know how to evaluate payor mix and negotiate managed care contracts, as well as use data to gain leverage with payors and supply vendors. In addition there are a variety of other areas that are addressed in this webinar that impact your business and ability to run a successful and profitable business.
Case volume and ASC growth
Matt Searles says one of the first tasks in evaluating a struggling facility is determining whether the facility is maximizing case volume for existing surgeons, as well as examining opportunities for future growth. He says ASCs can "yield some low-hanging fruit" by simply communicating with physician offices to make sure they understand which cases can be performed at the ASC. "It may not be clear to the office-based schedulers," he says. They should know which insurance plans the ASC accepts, how out-of-network plans are handled and which cases are approved for the ASC.
He says facilities should also stay mindful of growth and recruiting. "When we go to a facility that's struggling, we hear quite often there's no one left or all the surgeons are at other facilities," he says. "There's always someone left to recruit, and there's always more volume to be had." If existing physicians are not performing cases and are not compliant with Stark safe harbors, you should endeavor to get your equity back from those physicians and use it to recruit other providers.
ASCs should also think about succession planning. "You can't control [succession planning] completely, but you can encourage physicians to take steps and be mindful," he says. "If someone retires and takes a large number of cases with them, the center can be left with a large decrease."
Costs
According to Mr. Searles, profitability of cases depends on several main factors: reimbursement, staffing costs per case and supply and implant costs.
To manage supply costs, he says GENASCIS benchmarks facilities against a reliable database. They also use standardization to achieve considerable savings. "You'll have an orthopedist using multiple types of anchors," he says. "Some are very expensive, and others of equal quality are less expensive. It's about making sure doctors are comfortable but that they can standardize supplies as much as possible."
Your ASC should be part of a group purchasing organization, Mr. Searles says. But he warns ASCs to be careful about always purchasing through their GPOs as some supplies might be cheaper when purchased directly from vendors, such as certain phaco supplies.
Schedules
To save money on staffing, surgeons must be willing to compress schedules and block cases in as short a time as possible. Part-time staff should also be used as much as possible once the center has figured out how to optimize its schedule. "Optimize the schedule and use the part-time staff to supplement full-timers," Mr. Searles says.
Business office effectiveness
Ken Bulow says GENASCIS typically sees two broad categories of business office issues: coding and compliance problems and billing follow-up. He says every ASC should staff qualified and certified coders.
He says coders often review the operative report and code what they see on the report without returning to the physician and questioning them about potential issues. "Physicians and coders should feel comfortable discussing these issues," he says. He says coders should also make sure they identify whether implants are involved and make sure the correct modifiers are used for each payor. Regardless of whether the ASC perceives problems with their service, the ASC should invest in a third-party audit. "These are beneficial because they identify training opportunities for staff," Mr. Bulow says. "Just because you have certified coders who did regular training doesn't mean they don't have knowledge gaps."
He says account follow-up should be consistent and timely. The business office can put incentives in place to encourage physicians to submit dictations on time, such as holding distribution checks if dictations are routinely late.
Mr. Bulow says GENASCIS did a study and looked at 45,000 cases across 17 orthopedic codes where implants should be billed 100 percent of the time. A third of those cases did not have the implants billed, and of those that did, almost 8,000 had no payments for billed implants," he says. The solution was to create a list of procedures that should always have an implant billed. In ASC billing systems, they installed a trigger that says, "This claim cannot go out the door if it doesn't have an implant attached."
Reimbursement and payor contracts
In addition to optimizing cost, Mr. Bulow says properly negotiated reimbursement and contracts are critical to profits. "The first step is to benchmark against other facilities. What's the high watermark for reimbursement in your area?" he says. Approaching payors with supply and cost data can give your center leverage — a tool many ASCs have historically lacked.
It's important to read your payor contracts carefully, Mr. Bulow says. Make sure cases include carve-outs if necessary, and know your payment terms. He says you should also understand your reimbursement methodology. "Many payors use the old grouper system and have not switched to the new system Medicare uses," he says. "That's good for GI, which took some cuts under the new system, but bad for others like orthopedics."
A proper payor mix is essential to maximizing ASC revenue, he says. "Do not be afraid to terminate a contract or be very aggressive with the payor," he says. "If you have a bad contract, you have to go at it right away."
Compliance
"People ask a lot about the impact of healthcare reform," Mr. Searles says. "One impact we've seen is increase in funding to state and government agencies for enforcement of CMS Conditions for Coverage and coding compliance. There's more money going towards enforcement."
He says ASCs must prepare themselves for increasingly strict surveys. "It's ultimately all about educating physicians and staff," he says. Medicare Conditions of Coverage must be adhered to, and CMS they won't, and shouldn’t, be understanding if your facility does not follow the guidelines. He says ASCs can invest in external quality audits by compliance experts. He says the standards are out there and easily accessible, but ASCs must make more effort to educate their entire staff and stay consistent on upholding policies.
Conclusion
"Continually analyzing your ASC’s performance, benchmarking against other facilities, being proactive in addressing deficiencies, and continue to adapt and change are critical components to your surgery centers success moving forward," stated Mr. Freund.
Download the Webinar presentation by clicking here (pdf).
View the Webinar by clicking here (wmv). We suggest you download the video to your computer before viewing to ensure better quality. If you have problems viewing the video, which is in Windows Media Video format, you can use a program like VLC media player, free for download here.
Learn more about GENASCIS.
The speakers were Jim Freund, senior vice president of business development, Ken Bulow, COO, and Matt Searles, managing partner of Merritt Healthcare.
Jim Freund began the webinar by introducing a series of essential topics for ASC profitability, including:
• Common challenges and roadblocks affecting ASCs
• Steps to understanding the overall state of your business
• Direct steps and key solutions to overcoming mistakes and challenges
• Practices and essential tools to drive financial performance
After several decades of unprecedented change and growth, Mr. Freund says the ASC industry is experiencing its first bout of real challenges, as the economy, healthcare reform and other factors combine to put financial pressure on facilities. ASCs across the country are facing myriad of obstacles, including compliance and regulatory requirements, case volume and case profitability challenges, supply and staff management, reimbursement pressures, revenue cycle issues, complex payor contracting processes and proper ASC governance.
According to Mr. Freund, operating a successful ASC means paying attention to a variety of factors and continually changing. ASC leaders should understand costs and their impact on profitability, especially how costs and profits differ from case to case and physician to physician. They should keep a close eye on the management of the business office to ensure revenue is not lost through sloppy accounting. They should know how to evaluate payor mix and negotiate managed care contracts, as well as use data to gain leverage with payors and supply vendors. In addition there are a variety of other areas that are addressed in this webinar that impact your business and ability to run a successful and profitable business.
Case volume and ASC growth
Matt Searles says one of the first tasks in evaluating a struggling facility is determining whether the facility is maximizing case volume for existing surgeons, as well as examining opportunities for future growth. He says ASCs can "yield some low-hanging fruit" by simply communicating with physician offices to make sure they understand which cases can be performed at the ASC. "It may not be clear to the office-based schedulers," he says. They should know which insurance plans the ASC accepts, how out-of-network plans are handled and which cases are approved for the ASC.
He says facilities should also stay mindful of growth and recruiting. "When we go to a facility that's struggling, we hear quite often there's no one left or all the surgeons are at other facilities," he says. "There's always someone left to recruit, and there's always more volume to be had." If existing physicians are not performing cases and are not compliant with Stark safe harbors, you should endeavor to get your equity back from those physicians and use it to recruit other providers.
ASCs should also think about succession planning. "You can't control [succession planning] completely, but you can encourage physicians to take steps and be mindful," he says. "If someone retires and takes a large number of cases with them, the center can be left with a large decrease."
Costs
According to Mr. Searles, profitability of cases depends on several main factors: reimbursement, staffing costs per case and supply and implant costs.
To manage supply costs, he says GENASCIS benchmarks facilities against a reliable database. They also use standardization to achieve considerable savings. "You'll have an orthopedist using multiple types of anchors," he says. "Some are very expensive, and others of equal quality are less expensive. It's about making sure doctors are comfortable but that they can standardize supplies as much as possible."
Your ASC should be part of a group purchasing organization, Mr. Searles says. But he warns ASCs to be careful about always purchasing through their GPOs as some supplies might be cheaper when purchased directly from vendors, such as certain phaco supplies.
Schedules
To save money on staffing, surgeons must be willing to compress schedules and block cases in as short a time as possible. Part-time staff should also be used as much as possible once the center has figured out how to optimize its schedule. "Optimize the schedule and use the part-time staff to supplement full-timers," Mr. Searles says.
Business office effectiveness
Ken Bulow says GENASCIS typically sees two broad categories of business office issues: coding and compliance problems and billing follow-up. He says every ASC should staff qualified and certified coders.
He says coders often review the operative report and code what they see on the report without returning to the physician and questioning them about potential issues. "Physicians and coders should feel comfortable discussing these issues," he says. He says coders should also make sure they identify whether implants are involved and make sure the correct modifiers are used for each payor. Regardless of whether the ASC perceives problems with their service, the ASC should invest in a third-party audit. "These are beneficial because they identify training opportunities for staff," Mr. Bulow says. "Just because you have certified coders who did regular training doesn't mean they don't have knowledge gaps."
He says account follow-up should be consistent and timely. The business office can put incentives in place to encourage physicians to submit dictations on time, such as holding distribution checks if dictations are routinely late.
Mr. Bulow says GENASCIS did a study and looked at 45,000 cases across 17 orthopedic codes where implants should be billed 100 percent of the time. A third of those cases did not have the implants billed, and of those that did, almost 8,000 had no payments for billed implants," he says. The solution was to create a list of procedures that should always have an implant billed. In ASC billing systems, they installed a trigger that says, "This claim cannot go out the door if it doesn't have an implant attached."
Reimbursement and payor contracts
In addition to optimizing cost, Mr. Bulow says properly negotiated reimbursement and contracts are critical to profits. "The first step is to benchmark against other facilities. What's the high watermark for reimbursement in your area?" he says. Approaching payors with supply and cost data can give your center leverage — a tool many ASCs have historically lacked.
It's important to read your payor contracts carefully, Mr. Bulow says. Make sure cases include carve-outs if necessary, and know your payment terms. He says you should also understand your reimbursement methodology. "Many payors use the old grouper system and have not switched to the new system Medicare uses," he says. "That's good for GI, which took some cuts under the new system, but bad for others like orthopedics."
A proper payor mix is essential to maximizing ASC revenue, he says. "Do not be afraid to terminate a contract or be very aggressive with the payor," he says. "If you have a bad contract, you have to go at it right away."
Compliance
"People ask a lot about the impact of healthcare reform," Mr. Searles says. "One impact we've seen is increase in funding to state and government agencies for enforcement of CMS Conditions for Coverage and coding compliance. There's more money going towards enforcement."
He says ASCs must prepare themselves for increasingly strict surveys. "It's ultimately all about educating physicians and staff," he says. Medicare Conditions of Coverage must be adhered to, and CMS they won't, and shouldn’t, be understanding if your facility does not follow the guidelines. He says ASCs can invest in external quality audits by compliance experts. He says the standards are out there and easily accessible, but ASCs must make more effort to educate their entire staff and stay consistent on upholding policies.
Conclusion
"Continually analyzing your ASC’s performance, benchmarking against other facilities, being proactive in addressing deficiencies, and continue to adapt and change are critical components to your surgery centers success moving forward," stated Mr. Freund.
Download the Webinar presentation by clicking here (pdf).
View the Webinar by clicking here (wmv). We suggest you download the video to your computer before viewing to ensure better quality. If you have problems viewing the video, which is in Windows Media Video format, you can use a program like VLC media player, free for download here.
Learn more about GENASCIS.