Accelerating the "revenue cycle" reduces the time it takes to get paid and thereby reduces the accounts receivable balance on the balance sheet (increasing cash). This article identifies 10 sticking points in the ASC revenue cycle, each of which may represent a possible delay in the time it takes to get paid. How is your revenue cycle holding up?
1. Insurance verification — Online electronic access
Insurance verification is initiated when the surgeon's office faxes over the patient's insurance information. The surgeon's office should pre-authorize the patient for service, but the surgery center is responsible for itself. All major insurance carriers have an online system for benefit verification. This is the fastest and most efficient way to verify benefits. Calling on the phone to verify benefits consumes an inordinate amount of time. Fundamental items that need to be checked include:
- verifying that the surgery center accepts the patient's type of insurance;
- confirming patient's name, date of birth and policy number are accurate;
- ensuring coverage is active and the surgery will be performed within the enrollment period;
- checking to see if the patient has a benefit for outpatient surgery; and
- determining the patient's YTD deductible usage and any co-insurance or co-payment due for the service.
2. Preoperative call
The preoperative phone call primarily serves to verify the patient's eligibility to have an elective surgery. However, as the first contact with the patient, this is a prime opportunity to make him or her aware of their personal financial responsibility for the deductible and/or co-insurance several weeks or possible months before the operation. The goal is to provide several reminders of this responsibility prior to the date of service.
3. Financial obligation and policy letter
This practice serves to provide the patient with a written document prior to the service that describes the patient responsibility and the surgery center's financial policies in advance. This is good because it is a formal, physical document that will serve as yet another reminder of this obligation. The administrative burden of making letters for every patient is substantial, so this practice may be best served by focusing on patients with high deductible health plans. In 2009, patient deductibles of $3,000 or more have become more common and special attention is warranted for this category of patients.
4. Day of service — Registration and collection
From a revenue cycle standpoint, registration serves the purpose of allowing the patient to verify the insurance information prior to claim submission and double checking this info against the patient's insurance card. Incorrect policy numbers or patient dates of birth virtually guarantee that the claim will be rejected.
In regard to patient financial responsibility, the day of service is probably the only time that the patient is guaranteed to be face-to-face with a facility representative. The probability of eventually collecting a deductible or co-pay probably drops 25 percent or more after the patient leaves on the day of service. If the patient has been made aware of his or her obligation during the preoperative phone call and via the aforementioned letter, the day of service request for payment will be the third time they have been asked to pay or establish a financing arrangement.
5. Dictation
Dictation should be done the day the service is performed, prior to the surgeon leaving the facility. Dictation is crucial to the process because most dictation companies will guarantee a 24-hour turnaround period for the dictated operative reports. Optimally, they can be generated within a few hours. A surgeon that leaves the facility without dictating may not be back for a week or more. This often adds significant time to the time it takes to submit a claim and subsequently receive payment.
6. Coding
The operative report generated by the dictation provider is read by a certified coder and the appropriate ICD-9 diagnosis and procedural CPT codes are identified. Depending on whether this person is an in-house employee or a contractually provided service, codes can be turned-around same day or within 24 hours. Coders certified by the American Academy of Professional Coders are preferential because they have taken the Certified Ambulatory Surgery Center Credential coursework and certification exam. Coding performed by a non-certified coder is at higher risk of either not capturing all legitimate, billable procedures, or perhaps capturing more than is appropriate. A good coder may often ask for clarification or more information in regards to omissions or unclearly dictated operative reports.
7. Charge entry
Charge entry is the physical input of the billing codes and the generation of the insurance claim. Most ASC software systems (SurgiSource, Advantx, Vision, HST, etc.) will automatically generate the electronic claim with associated charges from the facility fee schedule once the codes are input.
8. Electronic claim submission — Online electronic clearinghouse
Electronic submission of claims is the preferred method of providers and insurance companies alike. Claims generated by the surgery center's software are submitted to a provider-insurance carrier intermediary called a "clearinghouse." The clearinghouse will "scrub" the claims to ensure "clean" submission by identifying errors that may cause rejections or denials. After the claim is scrubbed, the clearinghouse forwards the claim to the carrier. The clearinghouse is a key business partner is the processing of payment. Only under special circumstances are claims still faxed to the insurance carrier. The business manager and billers should have a personal relationship with the account representative at the clearinghouse and request periodic education sessions.
9. Payment: Electronic funds transfer vs. physical checks
Physical "check cutting" by insurance carriers can significantly delay the processing of payment. Normal time between the physical check cutting by the carrier and the time the check hits the ASC's bank account may be 7-10 days or more. This is because:
- some carriers do not perform daily check runs;
- checks may not physically make it from a carrier's accounts payable department to the mail room on the same day;
- checks are subject to regular mail "float";
- checks are sent via the USPS are subject to weekend and holidays delays; and
- checks sent to a lockbox service may be subject to processing backlog and possibly an extra day before they are available for deposit and online viewing.
Virtually all major carriers will set-up direct deposit remittance at the provider's request. This is an excellent way to minimize check and mail float. Imagine if you could liquidate a portion of accounts receivable valued at 7-10 days worth of cash collections. This is great way to get a one-time jump in collections if you have not done this historically.
10. Explanation of Benefits — Electronic access direct from carrier
Quick access to the Explanation of Benefits is necessary to address rejections, denials and requests for additional information in a timely manner. The sooner the problem is known, the sooner it can be fixed. Waiting for the EOB to be mailed with the remittance adds an additional 7-10 days of mail float to the time it takes to address payments that will already be delayed. All major carriers have an online portal for accessing EOBs. In many cases, the new EOBs will become available on a daily basis, even if the check or electronic funds transfer will not be cut for several more days.
Best practices to file effective denial appeals and avoid review delays
Here are some additional best practices to help you craft strong denial appeals and avoid lengthy reviews of your claims
Appealing denials
Denials most commonly occur because a fundamental coverage requirement is not met because of issues such as the following:
- patient did not have benefits at time of service;
- service was not a benefit under the patient's plan; and
- treatment was not medically necessary.
If benefit verification was completed by the surgery center, then the first two points should not be an issue. Denial for medical necessity would imply the surgeon was also not paid for his or her professional fee. When you speak to the call center representative at the insurance carrier, ask which of the Milliman's Medical Underwriting Guidelines this determination is based upon and whether they can direct you to these guidelines on their online portal. The facility and the surgeon will need to reference the guidelines when you submit your appeal.
Maximum charge edits
Individual carriers may have "edits" built into their system that "flag" or "kick-out" claims with charges that exceed preset limits. If it appears that claims with charges over a specific amount are routinely being held up or delayed for no compelling reason, you can ask a call center manager at the insurance carrier if there are such edits and whether they can remove them or at least raise the limits.
Request for additional information for processing
Large claims can have a significant impact on accounts receivable when they are delayed for reviews. To minimize these delays, or eliminate them altogether, the ASC can send additional information "in anticipation" of the request. All carriers have a fax or mailing address specifically for sending additional information. This way, the ASC does not have to wait 30 days just to receive a notice requesting the information. There is no penalty or cost associated with sending too much supporting information to the insurance carrier.
Granted, the administrative burden of faxing or mailing additional information prohibits doing so for all claims. The business manager must develop a criteria for identifying claims that have the highest likelihood of being delayed based on experience (for example, American Insurance Carrier may often request more info for claims with charges exceeding $9,000). Information that is commonly requested may include:
- diagnosis codes and associated procedural CPTs with associated charges;
- stickers or invoices for all implants used with associated charges;
- history & physical/clinical record;
- operative report; and
- anesthesia notes.
The more information you send, they less likelihood something will be missing when it is reviewed again. It is prudent to send the packet via certified mail so record of the submission is documented. Also, make sure the appropriate identification information is attached to the packet so the carrier can attach it to the correct enrollee and claim. This may include:
- patient name, date of birth, date of service, policy/subscriber number;
- enrollee name, date of birth, date of service, policy/subscriber number; and
- ASC facility and provider number.
Conclusion
Take the time to examine each of the 10 sticking points described in this article. If your center is not using electronic claim submission or direct payment deposit, this can significantly improve the timely processing of payments. Online access to EOBs and anticipatory actions to address rejections can abbreviate the delay times. Establishing educational sessions for your billers on the various online clearinghouse and insurance carrier systems is fundamental to maximizing the use of these tools and well worth the effort.
Mr. Newsad is a senior business analyst for Health Inventures, a developer and management and services firm that has been developing and expanding ambulatory surgery care and other outpatient services since 1976.