The shift to outpatient settings is gaining momentum in healthcare, as ambulatory service centers increasingly are recognized as efficient, high-quality and convenient sites of care. ASCs provide significant cost savings compared to traditional hospitals, along with faster patient recovery. Despite these advantages, however, payer reimbursements continue to decrease.
Becker's Healthcare recently spoke with Reid Zeising, founder and CEO of Gain, to learn about ASCs' reimbursement challenges; the role of personal injury cases on lien; and challenges, opportunities and best practices in serving personal injury patients.
Gain is the leading Revenue Cycle Management company (RCM) company for complex litigated claims in al 50 states, to simplify the management of personal injury cases.
Exploring reimbursement sources in a challenging environment
Mr. Zeising said the insurance industry has not fully embraced ASCs. In fact, at the same time some commercial payers are generating healthy profits, they are decreasing their reimbursements. "ASCs face a constant battle from commercial and government payers in a declining reimbursement environment," he said.
According to Mr. Zeising, serving personal injury patients is a moral obligation for ASCs and can be an important reimbursement source. He noted 100 million Americans — 30 million of whom are uninsured — have less than four weeks of savings today. "If these people are hurt, through no fault of their own, they have almost no chance to receive the same quality care as an individual with commercial health insurance," he said.
Even for individuals with insurance, there are high deductibles and frequent denials. "This is about access to care," Mr. Zeising said. "Providing care to personal injury patients is doing the right thing — it's a moral obligation."
ASCs can serve uninsured and underinsured personal injury patients through a lien. When physicians provide services to treat patients on a lien, it means the patient immediately receives necessary treatment and payment of the medical bill is deferred. The treating physician then waits to be paid until the personal injury claim is settled or resolved. The same logic applies to ASCs.
In addition to providing access to care, serving personal injury patients on lien is a premium reimbursement source for ASCs. According to Mr. Zeising, liens for personal injury patients can be worth 10% to 20% of an ASC's top line, which translates to 20% to 40% of the bottom line.
"It is my belief that personal injury patients on lien should be a part of the payer mix for any ASC," Mr. Zeising said. "It will help fight declining reimbursements from government and commercial payers."
Best practices to navigate challenges and complexities in personal injury cases
Mr. Zeising outlined challenges ASCs face in managing personal injury cases:
- Cash flow challenges. Serving patients on lien means incurring costs to serve these patients without receiving payment via the usual reimbursement processes. This can be a significant challenge for smaller providers. Gain offers a service that enables ASCs to receive a small amount of capital upfront and the majority of reimbursement when the lien is resolved.
- Judicial challenges, including dealing with the complex legalities.
- Communication challenges. These challenges arise because of the many parties involved in litigated claims, including the patient, a paralegal, a case manager, an attorney and an insurance company.
- Insurance defense challenges. Mr. Zeising described how these can involve (often unfounded) accusations by defense attorneys that healthcare providers are conspiring with the plaintiff's attorney.
- Managerial challenges. Providers that attempt to manage personal injury cases themselves must invest in the systems to manage these claims and incur significant ongoing staffing expenses. Even with these investments, organizations often struggle in managing personal injury cases, as they lack the necessary expertise, Mr. Zeising said.
Partnership and support are key in overcoming these challenges. "Outsource these cases," Mr. Zeising said. "Get independent revenue cycle management for litigated claims."
He shared an example of a large provider that initially invested $3 million to build a system for litigated claims, along with $4 million in annual payroll expenses. Later, to save money, the company outsourced its RCM functions to a firm with no litigated claims experience. This proved to be a disaster for the provider.
Then, Gain was brought in to manage complex litigated cases. Gain serviced these cases at a lower cost, and the duration of cases decreased significantly. The percentage of billed charges collected increased by 400 basis points, with an increase of $4 million annually to the bottom line.
Serving personal injury patients is the right thing to do, and serving these patients on lien can be a premium reimbursement source. But for most ASCs, attempting to manage these cases internally or with an inexperienced outsourcing partner can pose even more challenges than they started with. To realize the full financial opportunities in taking on these cases, ASCs need a third-party RCM partner — like Gain — with deep expertise in managing personal injury cases on lien.