Chuck Brown is administrator of Bidwell Surgery Center, a Health Inventures ASC in Middletown, Ohio.
Q: Your ambulatory surgery center reduced days in accounts receivable from 62 to 27 days from Dec. 2010 to May 2011. How did you accomplish that?
Chuck Brown: One crucial step was to hire a full-time biller. This is an extra expense, but when you get to a certain point it is a necessity. As a burgeoning young center, we initially split the billing and collections duties among a small business office staff. I was handling billing as part of my job as administrator, and our business office manager was handling collections. You should be constantly keeping track of each claim after it has been sent out, but this gets to be overwhelming when you have other duties to attend to. You need someone to do the work full time.
Hiring a full-time biller makes a huge difference. It is becoming essential for ASCs to make sure they are getting their full share of revenues. We are certainly no exception. Our market has a relatively high proportion of lower-income residents. Many of them have high-deductible coverage or rely on a government payor. Fully 85 percent of our insurance payments are at or around break-even compared with expenses. We have to do all we can to bill and collect correctly, especially for the 15 percent of cases that are profitable.
Q: What else did you change?
CB: We found a better claims clearinghouse. To follow claims properly, you constantly need to know their status. A good claims clearinghouse can tell you the exact status of a claim at any point in the processing cycle. If a claim is missing a digit, it could be sitting out in cyberspace without your knowledge.
Our previous clearinghouse was not letting us know where the claim was at each step and put the burden on us to identify unpaid claims. We could not allow this because a delay at the clearinghouse level might mean missing the insurer's timely filing limits. If you miss that deadline, the insurer doesn't have to pay. So we researched other clearinghouses and switched immediately. The difference between our old and new clearinghouse is like night and day. We are now able to track our claims process at virtually ever step.
Q: What changes did you make in patient collections?
CB: Basically, we wanted to collect more from patients before surgery, which is crucial. The chances of getting paid decrease every day you wait after surgery is performed. Patient collections are getting more important because deductibles are rising. The patient is now paying a larger proportion of the bill. Also, more patients do not have coverage, meaning ASCs increasingly have to ask patients for payment of the full bill.
Q: What is your first step in patient collections?
CB: The day after the case is scheduled, our staff contacts the patient and reviews the expected payments. We give patients as much information as possible on what they would owe. This means first contacting the payor to verify coverage, specifying the amount of the patient's deductible and coinsurance, and determining how much of the deductible has been used.
In that way, you can get a pretty accurate figure, although you still have to tell the patient this is still just an estimate. The surgery may turn out to be different than expected, making the bill higher or lower. Despite the lack of total clarity, it's still important to share a projected amount with patients before surgery, so that they can have an understanding. If you don't have this conversation, they are simply not going to think about it. In their way of thinking —sad but true — the medical bill gets paid after cable TV bill and the sofa purchase. When the ASC bill arrives, they might just ignore it. It's important for patients to pay a portion of the bill upfront and get a commitment from them to pay the rest.
Q: How much are your patients expected to pay upfront?
CB: This is a demographically driven decision, so it will vary at each center. When patients come if for surgery, we expect 50 percent of the bill up front. We've increased the percentage after experimentation. Some centers insist on 100 percent payment upfront, but our patient demographics wouldn't allow for this. We would have to turn a lot of patients away and that would reduce volume, which is often very dissatisfying for physicians.
Q: What else do you tell the patient?
CB: We try not to make too many exceptions to our collection policy because it's confusing to administer a lot of exceptions. The more you can standardize, the better your results will be. For example, we resist allowing long-term payment plans. If the patient says, I can only pay $5 a month, we have to say, "Sorry, but our policy is full payment within 90 days." It can be a hard conversation.
We hand patients a copy of the payment information they just heard from us and ask them sign it. A copy of the signed document is kept on file so we can refer to it if need be. Some patients will say, "I had no idea that's what I owed," so you have to be able to pull out the signed statement. Asking for money is hard enough, so it is helpful to have a document to point to.
Holding back on surgery, done within policy limits, really helps with collections. We were pleasantly surprised that when patients are faced with postponing surgery because they don't have the money, they tend to come up with the money.
Q: Do the physicians support the payment policy?
CB: This is a sticky point. It is in the best interest of the patient to have the procedure, and the physician, of course, would like to continue with surgery as planned. We try to get support from all our physicians so that we can display a united front. The physicians review our patient billing policy and approve it.
If we have to tell a patient that the surgery may have to be cancelled because of the patient's refusal to pay, we expect the physician to back us up. Otherwise, the policy has no meaning. After I tell the patient the surgery will probably have to be cancelled, I immediately call the surgeon. I want the news to come from me and not the patient. I tell the surgeon we are probably going to cancel the case and I need his support. If he says it's an emergency case and cannot be dropped, then I remind him he can always arrange to do it at the hospital.
Learn more about Bidwell Surgery Center.
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