Ken Bulow is COO of GENASCIS.
Q: Which ambulatory surgery center specialties do you find managed care contracting toughest?
Ken Bulow: Anything that requires an implant presents a contracting challenge. The reason why it's difficult is historically, organizations have found a way to recover their costs, plus a profit on implants. This is important because a facility may do 10 procedures and on nine of them they may get reimbursed on implants and one of them they don't get paid at all. You need to make sure on the nine you do get reimbursed for the implant that you more than make up for the one that you don't get paid anything.
Providers typically try to make sure there are some carve outs; there are even some providers that try to get significant markups and perhaps make a profit on implants.
The more expensive the implant, such as what you will often find with orthopedics and spine, the more difficult it becomes to contract for. It also depends on Medicare's approach. Medicare has deemed certain procedures as device-intensive procedures and that will then impact some payors' decisions on how they contract for those procedures. Medicare typically provides a much higher reimbursement as part of the case rate and so if they are just working on Medicare rates, you're going to get that but there are some facilities where even the device-intensive procedure reimbursement doesn't cover their balance.
Q: Any there any specialties where you find contracting to be easier?
KB: If you look at your basic pain — not pain pumps but your basic pain injections — and ophthalmology, those are pretty standard. You're usually going to get a fixed fee for the first CPT, and maybe a reduced fee for the second CPT, and that seems to be acceptable to most organizations.
Q: What are some challenges ASCs face with managed care contracting?
KB: Timely filing rules can be a challenge. The process by which payors pay implants can also present challenges. For example, Blue Cross in New Jersey (Horizon) has something called the trailer process which means you bill your case and after your case is approved, adjudicated and paid, then you submit separately the bill for the implant.
Also, Blue Cross in Michigan has you roll up all of your charges to the first line. What this means is whereas you typically bill every CPT as its own price, they have you roll up all of your prices into one line. If you have three procedures – let's say the first is $1,000, second is $500 and third is $200, with total charges of $1,700. They have you bill the three lines and put $1,700 on the first line, zero on the second line and zero on the third line. There's not a billing system out there that does that, so those need to be manually intervened.
You need to know if there are any unique submission methodologies when negotiating contracts. The global factor is how hard is it to administer whatever you agree to? If you can't administer it easily, that's likely not a very good contract.
Q: What are some common mistakes ASCs make when contracting?
KB: It's not understanding what they're agreeing to, not understanding all of the procedural issues they're agreeing to as part of that boilerplate. They often focus too much time on rates.
Another challenge is any payor that pays you based on CPT groupers can have their own groups. People just assume those groups are the same as Medicare and they're not. Payors will strategically move things around. If you don't know your top 25 procedures and what groups they're in, and you're just assuming they're the same as Medicare, or BlueCross or some other payor, you can get yourself in to trouble. If it's not following the Medicare grouper system, understand what those features are and how it impacts your organization.
Q: What are a few steps ASCs can take to overcome managed care contracting challenges?
KB: Use your local ASC organization/association to negotiate standard rules with the payors so they can't do funny things like you have to roll up all of your procedures to the top line. You can also do things for implants like partnering with an implant management company to essentially provide you with the implants so you're not going at-risk for implants, you're putting that on someone else.
Learn more about GENASCIS.
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