Here are five ways ambulatory surgery centers can collect-in-full from in- and out-of-network commercial payors.
1. Set reasonable rates. Problems can develop between ASCs and out-of-network payors when a surgery center's chargemaster rate is too high. It becomes noticed and it is difficult to justify, said Ronald Duperrior, managing partner of Dallas-based Clarity Health. He recommends knowing what is reasonable for your market and setting your rates two standard deviations away from the median or taking a multiple of what Medicare reimburses.
Payors know what others within your geographical location are submitting as charges. If you are charging at an unreasonably high rate, you are asking for them to reject your claim because your rates are not customary and reasonable.
"It is not unreasonable to have your rates at the upper end of the scale," he said. "But don't be outrageously unreasonable. Two standard deviations can easily be justified. Perhaps your physician team is recognized with noteworthy accomplishments or has a unique education [or] your center has purchased equipment considered to be advanced technology … This is justifiable. Setting a charge master 10 standard deviations to the right is unreasonable, and you will be often challenged."
2. Resist "defaulting" to 100 percent in-network participation. John Bartos of Collect Rx commonly sees providers "defaulting" to a strategy of 100 percent in-network participation, and thus failing to take advantage of the opportunities to obtain higher out-of-network reimbursements. While out-of-network does not work in every market, "the reality is that in most geographies, providers can increase revenue by having a portion of their revenue come from out-of-network patients," he said.
This requires an analysis of each of the surgery center's payors. Compare in-network and out-of-network reimbursement levels for your most common procedures on a payor-by-payor basis, and determine which contracts should be cancelled to reap a higher return.
"In addition, providers need to understand both the local payor and employer mix, as well as their relative market share compared to other providers," he said. If providers are prudent in picking the payors with which they pursue out-of-network, they should be able to maximize total revenue and profits.
3. Include contract language capping take backs on overpayments. If a surgery center accidentally receives overpayments from a payor over a period of time, the payor could subsequently collect the overpayments, causing significant financial damage to the ASC, said Andrea Woodell of Regent Surgical Health. She recommends including contract language that specifies how far back the payor can go to collect overpayments.
"I might add language saying you can only go back six months and make that reciprocal — so the surgery center cannot collect on underpayments after six months either," she said. This can be helpful if the surgery center changes hands or the partnership structure shifts. This way, new physicians or owners will not be stuck paying for problems that plagued the ASC in the past.
4. Clearly define the terms used in the fee schedule. It's important to define terms used in the fee schedule so that you are paid the amount you expect, Ms. Wooddell said. For example, when it comes to carve-outs, the payor may reference a "case rate," "global rate," or "per CPT rate." A CPT rate would mean that you receive a certain amount of money — say, $2,000 — for a certain CPT code. A case rate could mean that the surgery center will not receive anything except that rate for the particular carve-out, meaning you are not reimbursed for implants or multiples.
"The purpose of a carve-out is to pay you higher than the enhanced groupers of the CMS methodology you're using," she said. "If you have a case rate, you may actually end up getting less." She says a "global rate" implies that the rate is inclusive of some type of professional fee.
5. Know your rights. Each state has a state operating manual in which the state dictates to payors its insurance regulations. It's important for ASCs to know their rights according to the SOMs and to use those rights to their benefit, Mr. Duperrior said.
"If you are constantly getting denials for the same thing over and over, it may be an indication you are being harassed or payments are being unreasonably withheld," he said. "There are penalties involved. In some states [payors] will have to pay the full charge if they are wrong and delay payments."
When billers do not know their legal rights, they are more likely to be taken advantage of by payors. Citing state rules in appeals letters can also help leverage an ASC's ability to fully collect.
Always be on the lookout for improper delays or denials. A surgery center knowing its rights and standing up for itself also means hiring qualified personnel to represent the center. "Know the rules; keep on top of [accounts receivable]," he said. "Have a strong billing system. Hire good people and pay them accordingly."
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1. Set reasonable rates. Problems can develop between ASCs and out-of-network payors when a surgery center's chargemaster rate is too high. It becomes noticed and it is difficult to justify, said Ronald Duperrior, managing partner of Dallas-based Clarity Health. He recommends knowing what is reasonable for your market and setting your rates two standard deviations away from the median or taking a multiple of what Medicare reimburses.
Payors know what others within your geographical location are submitting as charges. If you are charging at an unreasonably high rate, you are asking for them to reject your claim because your rates are not customary and reasonable.
"It is not unreasonable to have your rates at the upper end of the scale," he said. "But don't be outrageously unreasonable. Two standard deviations can easily be justified. Perhaps your physician team is recognized with noteworthy accomplishments or has a unique education [or] your center has purchased equipment considered to be advanced technology … This is justifiable. Setting a charge master 10 standard deviations to the right is unreasonable, and you will be often challenged."
2. Resist "defaulting" to 100 percent in-network participation. John Bartos of Collect Rx commonly sees providers "defaulting" to a strategy of 100 percent in-network participation, and thus failing to take advantage of the opportunities to obtain higher out-of-network reimbursements. While out-of-network does not work in every market, "the reality is that in most geographies, providers can increase revenue by having a portion of their revenue come from out-of-network patients," he said.
This requires an analysis of each of the surgery center's payors. Compare in-network and out-of-network reimbursement levels for your most common procedures on a payor-by-payor basis, and determine which contracts should be cancelled to reap a higher return.
"In addition, providers need to understand both the local payor and employer mix, as well as their relative market share compared to other providers," he said. If providers are prudent in picking the payors with which they pursue out-of-network, they should be able to maximize total revenue and profits.
3. Include contract language capping take backs on overpayments. If a surgery center accidentally receives overpayments from a payor over a period of time, the payor could subsequently collect the overpayments, causing significant financial damage to the ASC, said Andrea Woodell of Regent Surgical Health. She recommends including contract language that specifies how far back the payor can go to collect overpayments.
"I might add language saying you can only go back six months and make that reciprocal — so the surgery center cannot collect on underpayments after six months either," she said. This can be helpful if the surgery center changes hands or the partnership structure shifts. This way, new physicians or owners will not be stuck paying for problems that plagued the ASC in the past.
4. Clearly define the terms used in the fee schedule. It's important to define terms used in the fee schedule so that you are paid the amount you expect, Ms. Wooddell said. For example, when it comes to carve-outs, the payor may reference a "case rate," "global rate," or "per CPT rate." A CPT rate would mean that you receive a certain amount of money — say, $2,000 — for a certain CPT code. A case rate could mean that the surgery center will not receive anything except that rate for the particular carve-out, meaning you are not reimbursed for implants or multiples.
"The purpose of a carve-out is to pay you higher than the enhanced groupers of the CMS methodology you're using," she said. "If you have a case rate, you may actually end up getting less." She says a "global rate" implies that the rate is inclusive of some type of professional fee.
5. Know your rights. Each state has a state operating manual in which the state dictates to payors its insurance regulations. It's important for ASCs to know their rights according to the SOMs and to use those rights to their benefit, Mr. Duperrior said.
"If you are constantly getting denials for the same thing over and over, it may be an indication you are being harassed or payments are being unreasonably withheld," he said. "There are penalties involved. In some states [payors] will have to pay the full charge if they are wrong and delay payments."
When billers do not know their legal rights, they are more likely to be taken advantage of by payors. Citing state rules in appeals letters can also help leverage an ASC's ability to fully collect.
Always be on the lookout for improper delays or denials. A surgery center knowing its rights and standing up for itself also means hiring qualified personnel to represent the center. "Know the rules; keep on top of [accounts receivable]," he said. "Have a strong billing system. Hire good people and pay them accordingly."
More Articles on Coding, Billing and Collections:
Fewer MRI, CT Scans Could Account for Slower Healthcare Inflation
Physician Survey: 27% Would Drop Low-Paying Insurers Despite Patient Population
Senate Dems' Budget Would Repeal SGR, Restore Lost Medicare Payments