Denials and poor follow-up processes. Charge entry errors. Accounts receivable (A/R) days well above industry standards. High self-pay balances. Failure to negotiate or load payor contracts. Incomplete operative notes.
What do these issues have in common? They all contribute to ASCs leaving money — and potentially a lot of it — on the table. And they're all problems which can be identified and put on a path to improvement and correction through a revenue cycle assessment.
Here are 10 things ASCs should know about revenue cycle assessments and their importance to ensuring a healthy bottom line.
1. Find your billing and collections deficiencies. A revenue cycle assessment will take a deep dive into your ASC's revenue cycle metrics and processes to discover issues negatively affecting your cash flow.
2. Identify opportunities for improvement. Finding problems is only part of a good revenue cycle assessment. The other part is the sharing of steps and best practices to fix those problems, boost your metrics, and streamline cash flow in the process.
3. Best performed by outside firm. While ASCs should closely monitor their revenue cycle performance, a revenue cycle assessment should be conducted by an experienced third party, particularly one with ASC expertise. Such an organization will have the tools and knowledge to most effectively — and objectively — review your surgery center's performance.
4. Examine about 20 cases. A revenue cycle assessment is completed through the assessment of a group of patient accounts. This figure is usually around 20 cases, although it can vary for any number of reasons, including findings (e.g., fewer accounts if major problems are found to be recurring) or ASC request (e.g., specific accounts associated with a biller).
5. Randomly select accounts. Unless otherwise requested, a revenue cycle assessment is performed through the random selection of cases. Taking a randomized approach helps ensure a variety of accounts undergo scrutiny and increases the likelihood of identifying a range of major and minor issues impacting cash flow.
6. Receive a detailed report. Following completion of a revenue cycle assessment, your ASC should receive a detailed report that provides the following:
• a summary of the findings;
• an analysis of your ASC's revenue cycle metrics and how they measure up with industry standards and best practices; and
• a breakdown of each assessed account's findings and other critical details.
7. Not just for internal processes. If your ASC contracts with an outside billing service or has its billing performed by a management company, undergoing a revenue cycle assessment is still worthwhile. Such services are not devoid of problems. Even if the assessment demonstrates that the service you use is functioning well, it's beneficial to confirm this to be the case rather than just assume it is true.
8. Best done proactively. If you know or believe your ASC is experiencing cash flow problems, don't wait any longer to schedule a revenue cycle assessment. With every day that passes, these issues will likely magnify and become more difficult and time-consuming to address. The sooner you can pinpoint your problems, the faster you can get to work fixing them.
If you believe your ASC revenue cycle is performing well, it's still a good idea to schedule an assessment. At a minimum, the assessment may confirm your beliefs, giving you more peace of mind. It's likely that the assessment will find at least a few opportunities for improvement. There's no value in waiting as doing so runs the risk of overlooking problems harming the bottom line.
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9. Schedule regularly. ASCs will be best served by undergoing at least an annual revenue cycle assessment. This will help ensure the ongoing monitoring of financial metrics and key performance indicators, raising of any red flags, and validating of processes.
10. Perform in conjunction with a coding audit. Coding is critical for an ASC's revenue cycle, helping ensure correct payment for services rendered. While a revenue cycle assessment can point to potential coding problems hurting cash flow, an ASC coding audit will identify those issues. By performing a coding audit along with a revenue cycle assessment, you will receive an even clearer picture of your business office's performance and areas for improvement.
Angela Mattioda (amattioda@surgicalnotes.com) is vice president of revenue cycle management services for Surgical Notes RCM. Surgical Notes is a nationwide provider of revenue cycle solutions, including, transcription, coding, revenue cycle management (RCM), and document management applications for the ASC and surgical hospital markets. Mattioda oversees the SNBilling RCM service, the newest component of Surgical Notes' complete end-to-end revenue cycle solution offering.