As you begin to reflect on 2024 and prepare for a new year, assessing your revenue cycle for long-term growth likely sits at the top of your to-do list. However, recognizing that inefficiencies exist is only step one. Step two? Identifying the specific revenue cycle gaps unique to your ambulatory surgery center.
Working closely with an RCM partner provides a window into potential revenue cycle inefficiencies that might be causing revenue leakage. After taking stock of those inefficiencies by “working backward,” you’ll be positioned to develop a robust A.R. strategy that guides your ASC to optimal financial health.
Start With Net Collection Rate and a Monthly Collections Goal
To measure effectiveness at collecting reimbursable dollars, calculate your net collection rate by dividing net collections by net revenue. The goal is a net collection rate of 98% or above. If you’re not hitting the 98% threshold, it’s probably time to evaluate how your current aging and bad debt write-offs are impacting revenue.
Next, set a monthly collections goal by breaking up your financial performance goals by month and aligning your team to this benchmark. Monitor your collections weekly to understand the behind-the-scenes forces working against your bottom line.
Identify Revenue Cycle Inefficiencies
If you’re not hitting the KPIs identified above, look to an RCM partner to provide tech-driven assessments, then work backward and determine which behind-the-scenes forces are working against your bottom line.
- Billing Delays: ACSs face a myriad of challenges related to timely billing management. From never-ending changes in regulations to inconsistencies in payer requirements, a lot can inhibit a smooth and timely billing process. On a micro level, slow transcription, incomplete notes, coding delays, and clearinghouse rejections can all cause hold-ups.
- SOLUTION: As a goal, we recommend claims go out no more than five days from date of service. Troubleshoot billing delays by pulling reports from customized billing software, and find billing bottlenecks that may be slowing down your cash flow. Plan to avoid delays by generating claims quickly, reducing errors, and promoting timely reimbursements.
- Coding Errors: Mistakes happen, and inaccuracies in coding may be leading to underpayment – providers lose one to three percent of net revenue annually due to commercial payer underpayments1. For example, undercoding complex procedures – such as coding a complex arthroscopy procedure as a less complex procedure – frequently results in revenue loss. Modifiers that enhance the specificity of codes, particularly in procedures with multiple components, must also be accurate. Even using outdated forms that don’t reflect new or revised codes points to improvement opportunities.
- SOLUTION: Perform regular audits to understand and stay on top of coding mistakes. Next, invest in targeted modifier training for staff to establish clear coding guidelines and drive consistent and complete information transfer between departments. Keep pace with coding system best practices and regularly collaborate with coding experts to ensure current and comprehensive forms. Taking advantage of advanced contract management and underpayment detection software also aids in avoiding these common pitfalls.
- Claim Denials: Ambulatory surgical centers should aim for a clean claim rate of 98% or above. If your center isn’t hitting that number, it’s time to dissect your claim denials. Did you know that 86% of denials are potentially avoidable2? Possible culprits we see often include coding errors, charge entry, or not following up in a timely manner.
- SOLUTION: Harness automated billing systems to manage billing and coding rules across multiple specialties, overcoming complex challenges to consistently submit clean claims. Also, use technology to detect inaccurately paid claims, investigate reasons for underpayment, and prompt timely follow-ups.
Implement Targeted Strategies to Close the Gaps
Employing technology to spot inefficiencies will provide a solid foundation for tracking aging accounts and optimizing revenue cycle performance. After deciding on metrics for success, adopt the philosophy that while there may be many seemingly disparate challenges to tackle, they are part of one holistic, big picture. By working backward you can begin to move forward in partnership with your staff, using the latest RCM technology alongside authentic human engagement to produce results.
For a deeper dive into practical tech-driven strategies to streamline your billing and boost profitability, watch this expert-led, on-demand webinar, Technology-Driven Revenue Cycle Management: Transforming ASC Financial Health.
How in2itive Can Help
After patient care, in2itive Business Solutions recognizes that robust RCM serves as the backbone of successful ambulatory surgery centers. By collaborating with us to help boost your growth and financial performance through revenue cycle performance enhancement, you can ease the administrative burdens on your billing teams, automate routine tasks, and allow staff to focus on what matters most – patient care and engagement.
Want to learn more about how tech-driven A.R. assessments can enhance revenue cycle performance? Reach out to in2itive today to discover how a tech-driven team can help your center achieve peak financial health.
Sources
- Look beyond the common variance report to find and capture revenue. Becker’s Healthcare: Becker’s Hospital Review https://www.beckershospitalreview.com/strategy/look-beyond-the-common-variance-report-to-find-and-capture-revenue.html
- Change Healthcare 2020 Revenue Cycle Denials Index. Change Healthcare
https://www.ache.org/-/media/ache/about-ache/corporate-partners/the_change_healthcare_2020-revenue_cycle_denials_index.pdf
