A Guide to Improving Surgery Center Billing Practices
March 1, 2021 6 minutes read
EXECUTIVE SUMMARY
Surgery centers could improve their financial bottom line by focusing on following best practices in revenue cycle management.
- Use a tool or checklist that touches on every step of the revenue cycle management function.
- Audit the main areas that affect the center’s revenue.
- Educate patients with the best available information before surgery.
Surgery centers are rising in popularity and have expanded their procedures in recent years. But a year of the COVID-19 pandemic forced many centers to close for weeks or months and reopen at reduced capacity, resulting in hard hits to finances.
As the COVID-19 vaccine rollout slowly brings an end to the pandemic, surgery centers can take time to improve their financial picture in 2021. One important tactic is to focus on best practices in revenue cycle management.
Improving a facility’s medical billing management takes time, but perhaps the pandemic has created a little extra time for leaders. “It could be something you start, and I would hope you do it every month,” says Caryl Serbin, RN, BSN, LHRM, president and founder of Serbin Medical Billing, Fort Myers, FL.
One best practice tip is to pay attention to the flow of billing and make sure bills go out on time. “We all know that managed care companies will take a little bit to process. The sooner you get your bill in, the sooner you get paid,” she adds.
Serbin offers additional suggestions for developing best practices, including a revenue cycle business checklist:
• Create a habit. Using a tool or checklist helps a business office leader develop best practices and good habits.
“I like the scorecard because you don’t forget stuff; it’s a checklist reminder,” Serbin says. “It touches on every step of the revenue cycle management [RCM] function, especially the ones that make a difference to the bottom line.”
The scorecard tool can be used to compare the surgery center’s performance from month to month. This will highlight areas for improvement.
• Find RCM tools. Ambulatory surgery centers (ASCs) can find checklists and tools online through various organizations.1-5 A good scorecard should include many performance metrics, including but not limited to: insurance verification/authorization, patient financial counseling, upfront collections, patient payment plans, timeliness of coding, reprocessing rejected claims, and denial/write-off rate. Score each metric as above average, average, or below average.
“The intention of this creation is to stimulate conversation around best practices, get people looking at their best practices, and how to make improvements without it feeling too overwhelming or too much work,” Serbin says.
• Audit areas that affect revenue. Although an audit can feel tedious, an RCM tool can help, according to Tara Gillon, ASP, CRCP-P, chief operations officer at Serbin Medical Billing.
During an audit, ask these questions: What is the upfront collection? (Usually expressed as a percentage of the patient copay and/or deductible that is collected before or on day of surgery.) How far ahead is the surgery center in its insurance verifications? Has insurance coverage been verified? What do patients owe at the date of surgery? What percentage of the cost is collected up front? How much of the patient’s accounts receivable is on payment plans? What is the follow-up time frame for collectors? How long does it take to send the bills to insurance payers?
“That directly affects revenue,” Gillon says of the last question. “If it takes you longer to bill and get that out the door, it takes you longer to get the money in.”
• Improve insurance verification and upfront collections. The typical surgery center’s insurance verification does not go far enough, according to Gillon. “Surgery centers may do insurance verification, or what I call eligibility checks, making sure patients’ insurance is active, but they don’t go further to see what’s truly covered,” she explains.
Many surgery centers do not find out what the patient’s responsibility will be for the cost, and they do not notify patients ahead of time. “Most patients are aware they have some responsibility,” Gillon says. “Notify patients before surgery of their estimated responsibility. It allows them to have control over their finances and make a decision with the surgery center, more as a partnership.”
Too often, patients find out what the surgery will cost them out of pocket after surgery. This could harm the surgery center’s ability to collect. On the flip side, a surgery center might not check in advance on limitations in the patient’s insurance plan. Thus, surgeons perform the procedure, but a claim is denied after the fact because the insurance provider does not cover it.
“You literally won’t get paid for parts of the surgery or all of it if you haven’t done that process correctly,” Serbin cautions.
An efficient way to improve revenue cycle management is to focus on upfront collections. Surgery centers have relied on upfront collections more in recent years because patients are shouldering more of the cost of the procedures thanks to higher deductibles and copays.
“I believe patients come in with expectations that they are going to have to pay something up front,” Serbin says. “We’ve had these insurance changes in place for years now, and we’re sort of used to it.”
Surgery centers need policies and procedures in place to describe how upfront collections are handled. “When we’re involved in centers that are in development and have not yet opened, one of our first conversations is how to handle it and discuss at a board level how to get policies in place prior to opening, for uniformity,” Serbin says.
• Educate patients with best available information. Surgery costs are not as simple as ordering a lab test or X-ray. There is some variability in costs, depending on the procedure and circumstances.
It is important for surgery centers to educate patients with the best available information before the procedure. “Tell patients, ‘This is what the surgeon expects to do,’ and base expected costs off what the surgeon’s expectations are,” Gillon says. “Notify patients that this is an estimate and is subject to change, based on the actual procedure.”
The key is to be as transparent as possible. “We tell surgery centers to do a written estimate and make sure they focus on the word ‘estimate,’” Gillon says. “When I see surgery centers do proper insurance verification, it’s pretty accurate the majority of time. But there always are one or two incidences, based on patients’ circumstances.”
Education and transparency about surgical costs also can improve patient satisfaction. Search online for “billing complaints” and “surgery center,” and there will be multiple results, including links to the Better Business Bureau. In some of these cases, the center has to spend time answering complaints online and following up to share their side of the story or to satisfy the customer’s concerns.
It is more efficient to be as clear as possible up front about the costs and potential costs. “No one likes a surprise charge,” Serbin says.
Bad reviews often are the result of unhappy patients who were not informed properly about costs. “When verification and upfront collection is done, surgery centers’ collection rates of the patient’s portion are up higher than if it wasn’t done,” Gillon says. “They get reimbursed for what they should, and we also see a reduction in the backend collections process.”
Fewer collections that have to be chased means there are lower utility costs and less staff time spent on phone calls related to billing. “It protects the surgery center’s reputation, and they’ll have happier patients,” Serbin adds.
REFERENCES
- Serbin Medical Billing. ASC revenue cycle scorecard.
- Clariti Health.
- Avanza Healthcare Strategies. Ambulatory surgery center benchmarks.
- In2itive Business Solutions. Free ASC billing checklist.
- MediGain. An 11-step financial, operational and marketing checklist for healthcare providers.
Surgery centers could improve their financial bottom line by focusing on following best practices in revenue cycle management.
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