Business and clinical models for ambulatory surgery centers (ASC) should be designed to deliver success from the day the doors open.
Then there is the need for ongoing incorporation of best practices and detailed plans to foster and sustain success. In the case of more mature ASCs — those that are 10-plus years old — that have found and sustained success, it is easy to get into a routine. While streamlining operations can be effective, without careful monitoring, this can lead to issues that can grow in significance over time. It is imperative for ASCs to regularly perform an examination of their operations and performance to identify shortcomings and opportunities for improvement.
Here are three areas for ASCs to focus on and monitor to help ensure a sustained, high level of performance.
1. Planning and oversight
When it comes to long-term management, it is important to define the parameters for success before launching an ASC. You will want to determine exactly — or as close to it as possible — the number and mix of cases needed to hit financial targets. This helps eliminate guesswork in judging performance.
Once the business is launched, review performance daily. This includes confirming that cash flow is positive and balances remain within pre-determined tolerances and thresholds. For instance, the number of days claims remain in accounts receivable (A/R) can serve as an effective way to gauge the efficiency of A/R systems. Consider tracking accounts payable (A/P) to ensure you meet contractual agreements and remain in good standing with key suppliers. It is also worthwhile to monitor claims to verify they are being released on a timely basis. It is not unusual for clinically outstanding ASCs to fail because they cannot get claims distributed fast enough.
Beyond A/R, A/P and claims, consider reviewing reports every day for case volumes, quality measures, cash on hand and processed claims. Tracking these metrics is essential to complete revenue cycle management. There are a few important benefits to this approach: it eliminates sudden cash flow crises and other unpleasant surprises and it makes the process of month-end closing much less traumatic for ASC staff.
2. Vigilance
When it comes to billing, collections and reporting, the ASC business is labor intensive. Making sure claims are paid properly and promptly and that patients make the correct payments requires a high-touch, detail-oriented approach. Rigorous processes for pre-approval and verification eliminate many mistakes, and follow-up review is critical. This is especially the case for ASCs with varying financial models, such as those with some procedures handled in network and others out of network.
Make sure to cast a keen eye for common mistakes and discrepancies that occur across plans and contracts. ASCs that perform audits of billings and collections may uncover thousands of dollars that drop straight to the bottom line. Again, it's the combination of rock-solid contracts and diligent follow up that will generate outstanding ROI for surgeon-partners.
The ASC's industry's administrative barriers and often confusing bureaucracy can cause some ASC billing managers to write off more claims than they should out of frustration. To help avoid that scenario, which can devastate a strong-performing ASC, consider the use of pre-drafted letters, templates and forms to streamline communications and more efficiently resolve disputes with payors. An initial follow up with a payer can resolve many cases where claim denials result from a simple error by the payor, such as a CPT code discrepancy. Work to identify whom to call at a payer if disputes need to be escalated.
Even at the best managed ASCs, problems may arise occasionally when numbers drift off course. If that occurs, explore underlying causes and frame solutions. Vigilance can help keep minor problems from developing into more serious ones.
3. People
One of the most valuable components to achieving success and maintaining it is to find the right people to manage the many aspects of the business. These are people with the ability to provide support and expert knowledge. They may be full-time, part-time or PRN staff who can handle everything from following up on overdue claims and handling core bookkeeping tasks, working through a paperwork glut, making time-intensive follow-up calls to payors and performing maintenance work on A/R and/or A/P systems.
These services are especially important immediately after opening, when ASCs are typically short-staffed. When it is time to hire staff, do not be tempted to rush the process, even if it would save you a few dollars to transition away from qualified PRN staff faster. Take the time and invest the resources necessary to carefully recruit, interview and train the right candidates as you seek to fill A/R, A/P and/or business office roles.
Take the long view
Clinical excellence and a strong business model go hand-in-hand, which is why it is critical not to let business issues threaten quality of care. Carefully organize your business for operational and financial success, rigorously monitor key metrics and move quickly to get the business back on course if the numbers start to drift off target. That is the value of financial monitoring and management oversight, and what is required to succeed in the increasingly competitive and challenging healthcare environment.
Vicki Dekker (mvdekker@avanzastrategies.com) is senior consultant, business office specialist, for Avanza Healthcare Strategies, which provides healthcare organizations with strategic guidance, with a focus on outpatient services and community collaborations.
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