Here are four tips for ambulatory surgery centers to maximize reimbursement on ophthalmology cases.
1. Renegotiate your contracts regularly. The more often you renegotiate payor contracts, the better your contracts will be. The constant back-and-forth allows you to more frequently update reimbursement based on the market and regular interaction leads to the formation of a closer bond with the insurance company.
"Go back as often as possible and look at the contracts so you can seek reimbursement increases whenever and wherever possible," says Dan Connolly, vice president of payor contracting for Pinnacle III. "In the contracting world, if you go back to the payor after letting the contract lapse and roll over under the evergreen clause for several years, it's extremely difficult to make up that lost yardage."
You can renegotiate increased rates and tie them to a 12-month fixed term. Begin the conversation again after eight or nine months to make sure you have time before the contract rolls over.
2. Leverage your relationships with payors. If you negotiate with the same people at the insurance company every year, you can leverage that relationship for better rates. If possible, meet the person you negotiate with in person instead of over the phone. You'll have the benefit of reading their body language and they'll be able to see yours.
"There's a night and day difference of how you pick up on things and responses in person versus over the phone," says Mr. Connolly. "If you watch the presidential debates on TV, you'll have a different experience than listening to them on the radio. If you're just listening, you lose the non-verbal communication and all you can do is take what people say at face value."
Once you have their attention, be prepared to describe your case mix, cost per case and other aspects of your business that depend on fair reimbursement rates.
"In a recent negotiation for a multispecialty center, we successfully secured a carve out on ophthalmology codes as a deal closer," Mr. Connolly states. "We were able to increase reimbursement by leveraging other aspects of the center — orthopedic cases — that would remain in the hospital at a much higher cost to the payor if we could not close the deal. If the payor wouldn't step up on reimbursing for cataract procedures, we wouldn't move forward. There was more savings on the overall package, so the payor agreed to better reimbursement for cataract procedures, resulting in a 40 percent gain on the carve-out."
3. Collect and leverage data on average payor rates. In some cases, commercial payors will try to negotiate a rate well below the average reimbursement for a particular procedure. You can use general reimbursement data from other commercial payors in the region and, in some situations, even Medicare to support your case for higher rates.
"Show them the comparison on top volume ophthalmology procedures," suggests Mr. Connolly. "Over the last five years Medicare reimbursement changes have occurred with many of those procedures. Some may reflect moderate to significant increases on Medicare's end. If a commercial payor's reimbursement to the facility was previously based on a multiple of Medicare's reimbursement and the payor's rates haven't increased over the past few years, use Medicare rates to demonstrate credibility for rate increases."
You can also use blind data to illustrate the average reimbursement of other payors and work with the insurance company to shore up that gap.
"You really have to lay out your evidence-based negotiation and show the payor where their reimbursement is deficient and what the facility is comparing them to," says Mr. Connolly. "For example, a glaucoma laser procedure didn't pay well at ASCs, but Medicare increased reimbursement by 35 percent. That's a potential case that could be brought to the center since there is adequate reimbursement from Medicare. If the commercial payor can't increase reimbursement to provide the facility with a reasonable margin, that procedure will have to stay in the hospital at a higher cost to the payor."
4. Be aware of new groupers. Insurance companies are enhancing their own methodology to move more unlisted codes into groupers. There have been significant changes to procedures and codes that were initially considered unlisted moving to groupers.
"They'll tell you they just want to assign more procedures to groupers and will give you a 5 percent increase in those groupers, but more often than not there have been other changes that impact the bottom line," Mr. Connolly notes. "In a recent situation, we performed a thorough grouper cross-walk by procedure. Had we simply accepted what we were being told by the payor, the facility would have ended up with a 32 percent deficit overall after adjusting for utilization."
In this case, know what you can save the payor and show them what cases historically went to the hospital that you are now doing in the ASC. Let them know that if the reimbursement isn't high enough, the cases won't be performed in the ASC and the insurance company will have to cover the full hospital rates.
More Articles on Surgery Centers:
5 Core Concepts to Drive Revenue at Ophthalmology ASCs
8 Points of Survival for Surgery Centers After ACOs
5 Factors for Spine Surgeons to Negotiate Better Payor Contracts
1. Renegotiate your contracts regularly. The more often you renegotiate payor contracts, the better your contracts will be. The constant back-and-forth allows you to more frequently update reimbursement based on the market and regular interaction leads to the formation of a closer bond with the insurance company.
"Go back as often as possible and look at the contracts so you can seek reimbursement increases whenever and wherever possible," says Dan Connolly, vice president of payor contracting for Pinnacle III. "In the contracting world, if you go back to the payor after letting the contract lapse and roll over under the evergreen clause for several years, it's extremely difficult to make up that lost yardage."You can renegotiate increased rates and tie them to a 12-month fixed term. Begin the conversation again after eight or nine months to make sure you have time before the contract rolls over.
2. Leverage your relationships with payors. If you negotiate with the same people at the insurance company every year, you can leverage that relationship for better rates. If possible, meet the person you negotiate with in person instead of over the phone. You'll have the benefit of reading their body language and they'll be able to see yours.
"There's a night and day difference of how you pick up on things and responses in person versus over the phone," says Mr. Connolly. "If you watch the presidential debates on TV, you'll have a different experience than listening to them on the radio. If you're just listening, you lose the non-verbal communication and all you can do is take what people say at face value."
Once you have their attention, be prepared to describe your case mix, cost per case and other aspects of your business that depend on fair reimbursement rates.
"In a recent negotiation for a multispecialty center, we successfully secured a carve out on ophthalmology codes as a deal closer," Mr. Connolly states. "We were able to increase reimbursement by leveraging other aspects of the center — orthopedic cases — that would remain in the hospital at a much higher cost to the payor if we could not close the deal. If the payor wouldn't step up on reimbursing for cataract procedures, we wouldn't move forward. There was more savings on the overall package, so the payor agreed to better reimbursement for cataract procedures, resulting in a 40 percent gain on the carve-out."
3. Collect and leverage data on average payor rates. In some cases, commercial payors will try to negotiate a rate well below the average reimbursement for a particular procedure. You can use general reimbursement data from other commercial payors in the region and, in some situations, even Medicare to support your case for higher rates.
"Show them the comparison on top volume ophthalmology procedures," suggests Mr. Connolly. "Over the last five years Medicare reimbursement changes have occurred with many of those procedures. Some may reflect moderate to significant increases on Medicare's end. If a commercial payor's reimbursement to the facility was previously based on a multiple of Medicare's reimbursement and the payor's rates haven't increased over the past few years, use Medicare rates to demonstrate credibility for rate increases."
You can also use blind data to illustrate the average reimbursement of other payors and work with the insurance company to shore up that gap.
"You really have to lay out your evidence-based negotiation and show the payor where their reimbursement is deficient and what the facility is comparing them to," says Mr. Connolly. "For example, a glaucoma laser procedure didn't pay well at ASCs, but Medicare increased reimbursement by 35 percent. That's a potential case that could be brought to the center since there is adequate reimbursement from Medicare. If the commercial payor can't increase reimbursement to provide the facility with a reasonable margin, that procedure will have to stay in the hospital at a higher cost to the payor."
4. Be aware of new groupers. Insurance companies are enhancing their own methodology to move more unlisted codes into groupers. There have been significant changes to procedures and codes that were initially considered unlisted moving to groupers.
"They'll tell you they just want to assign more procedures to groupers and will give you a 5 percent increase in those groupers, but more often than not there have been other changes that impact the bottom line," Mr. Connolly notes. "In a recent situation, we performed a thorough grouper cross-walk by procedure. Had we simply accepted what we were being told by the payor, the facility would have ended up with a 32 percent deficit overall after adjusting for utilization."
In this case, know what you can save the payor and show them what cases historically went to the hospital that you are now doing in the ASC. Let them know that if the reimbursement isn't high enough, the cases won't be performed in the ASC and the insurance company will have to cover the full hospital rates.
More Articles on Surgery Centers:
5 Core Concepts to Drive Revenue at Ophthalmology ASCs
8 Points of Survival for Surgery Centers After ACOs
5 Factors for Spine Surgeons to Negotiate Better Payor Contracts