ASC revenue cycle management is complex, with challenges at every stage that can delay payments and impact cash flow. By improving workflows, training staff, staying current on rules, leveraging the right tools, and evaluating whether to outsource some or all revenue cycle functions to ASC billing experts, surgery centers can streamline operations and strengthen financial performance.
If you are like most ambulatory surgery centers (ASC) professionals, ensuring that proper payments come in can feel like jumping through hoops. From submitting clean claims and using the appropriate code sets to communicating and engaging with patients to collect their portion of payments, the process of getting paid can be complex and difficult to consistently execute.
That said, there are ways for ASCs to avoid payment delays and optimize cash flow, including workflow improvements, smart planning, the use of practical tools and technology, and looking for opportunities to partner with ASC billing companies. Let's take a closer look at the complexity of ASC revenue cycle management, common pitfalls to watch out for, and some strategies ASCs can leverage to enhance their revenue cycle performance.
Exploring the Complexity of the ASC Revenue Cycle
As noted by “Revenue Cycle Management: The Art and the Science,” the revenue cycle tracks the entire payment process in clinical settings. This includes patient scheduling, treatment, coding, billing, and reimbursement. On the surface, this may seem fairly straightforward, but it is complicated by the likes of payers, managed care contracts, coding requirements, compliance, staff inexperience, timeliness, and documentation accuracy.
Navigating these nuances is key to improving and growing cash flow, but first, it's vital to understand what comprises complete ASC revenue cycle management.
The Stages of ASC Revenue Cycle Management
The ASC revenue cycle can be broken down into a few high-level stages. The first stage is directly involved with the patient: scheduling and registering the patient at the facility, verifying their insurance, collecting any co-pay, and documenting the visit. This stage sets up the rest of the revenue cycle for success — it's the foundation that establishes who the patient is, what insurance coverage they have, and what they may owe.
The next stage is focused on medical coding as well as charge entry, followed by submitting claims for procedures performed. Accuracy is particularly critical at this stage. When all patient and treatment details are documented accurately, codes are applied appropriately, and rules are followed according to established procedures and requirements, the claim submission process can be streamlined, and an ASC's clean claim rate should increase. This work is critical to ensuring the revenue cycle operates efficiently and seamlessly. However, even a single error can disrupt this process, reducing operational efficiency and leading to delayed payments.
The following stage is payment posting, but sometimes, payment doesn't come in due to denials. Thus, denial management is also included in this stage. This process involves understanding what went wrong that caused the denial, gathering the information needed to produce a strong appeal, submitting the appeal, and then following up to ensure proper payment is rendered. Insights gained from responding to denials should be used to reinforce and/or refine earlier steps in the ASC revenue cycle, thus reducing the risk of repeat errors and future denials.
Finally, the last stage returns to where it all started: with the patient. This stage involves sending a statement to the patient that outlines the treatment provided, the cost breakdown, the outstanding patient balance (if any), and other pertinent details. It is essential that the patient understands their surgical experience and how it translates to their financial responsibility. Confusion at this stage can reduce patient satisfaction, delay any remaining payment, and lead to negative reviews.
Breaking the Bottlenecks: Where ASC Payments Get Stuck
Payment delays can happen at any stage in ASC revenue cycle management. Each step in the process is essential, and one problem can have a cascading effect that impacts every following stage, potentially leading to larger bottlenecks. For example, if a payer changes a rule and that change isn't noted, it could result in a pile of denials that then have to be appealed individually. That could eat away at your staff's precious time and impact the bottom line.
This is just one example of how things can go wrong and overcomplicate ASC revenue cycle management. A myriad of issues can occur anywhere down the line, whether they're caused by rule updates, inaccurate coding, incomplete documentation, or staff disruptions. This is why it's so important to understand the interconnected nature of the revenue cycle — it's the first step to avoiding payment delays and setting up the process for success.
Common ASC Revenue Cycle Management Pitfalls
Avoiding payment delays is easier said than done and neglecting just one aspect of ASC revenue cycle management can impact the entire process. Here are some common pitfalls:
- Unclear processes. Each step in the revenue cycle workflow must be planned out and defined with a clear process to follow. This includes scenarios that may only occur rarely as well as new scenarios that have never been encountered. Staff should know exactly what to do, what needs to happen once they have completed their work, and who to contact when there are questions or concerns. It should come as no surprise that ASC billing companies prioritize developing strong processes to ensure strong results for clients.
- Staffing and training challenges. Even with the best processes in place, staff can still make mistakes. It's essential to pair good processes with great training to teach staff their role as well as what rules to follow and how. Additional training may be required to help staff feel confident in using revenue cycle management software. Staff changes and disruptions, such as turnover, can also impact the quality of claims and service.
- Inefficient registration and verification. This step can make or break cash flow, so it's vital to double-check that all data captured is correct. Patient information, such as insurer, coverage, and even demographics, can change between the time the patient was referred to an ASC and when they arrived at the surgery center. Re-verification is necessary for every encounter, and all insurance information must be verified. Staff should be trained to never skip a field and watch out for human error. Even the smallest mistake can make a denial more likely.
- Documentation issues. The time between documenting a procedure(s) and sharing the information with coders should be minimized (ideally, under 24 hours). If a surgeon's dictation is late, it can lead to delays in billing and charging, and if it's lacking key details or is inaccurate, it can lead to errors in the claims submission process that can further delay payment.
- Coding errors. Coding can go wrong in numerous ways, from having the wrong people in the wrong role to using outdated manuals and guidelines, overlooking regulatory changes, coding out of order, and other challenges. One mistake here can also result in inaccurate or incomplete claims that can get denied, which further emphasizes the importance of careful coding and comprehensive documentation.
- Outdated rules. Both payer changes and policy changes at the state or federal level must be reflected in revenue cycle processes as soon as possible to ensure rules are always current. Anything but can lead to inaccuracies that slow down revenue cycle flow. As new procedures or specialties are added, rules should be adjusted accordingly.
- Poor appeals and denials process. It may feel tempting to let a denial go when you consider the amount of effort it takes to appeal it. However, losses can add up over time, and falling into a habit of accepting and moving on from denials can quickly become the norm. Establish a clear and efficient workflow for appealing denials and set expectations for staff (such as following up within 48 hours to all denials) to help streamline the process.
- Outstanding patient debt. While some patients may have ASC services fully covered by insurance, others may owe some money. Such expenditures are increasing: According to the Centers for Medicare & Medicaid Services, out-of-pocket spending grew 7.2% in 2023, accounting for 10% of all national health expenditures. It's important for ASCs to understand this context and provide support to patients to both alleviate this financial burden and ensure payment still comes in.
By keeping these obstacles in mind, ASCs can put plans in place to avoid them altogether. Then, it's time to focus on optimization.
Strategies and Best Practices to Optimize Cash Flow
To keep cash flow moving, ensure clean claims, and shorten the days to payment, ASCs can implement the following strategies:
- Standardize front-end processes. A support structure must be in place to streamline ASC revenue cycle management. Take the time to develop a framework that establishes clearly defined roles, responsibilities, and workflows for staff, and set expectations and objectives for each role. Pay particular attention to front-end processes to ensure all pertinent information, including insurance verification, is collected from the patient.
- Conduct more robust staff training. Once processes are defined, review and discuss them with staff in dedicated training sessions. All staff should understand how their actions impact the revenue cycle. This includes surgeons who are in charge of documentation. Provide resources, guidelines, and checklists for additional support, and hold new trainings to account for rule changes.
- Stay current on coding policies and rules. Stay up to date on all payment rules and coding policies by maintaining strong, communicative relationships with payers and regularly reviewing CPT guidelines. When new rules roll out, inform staff as soon as possible. Provide staff with coding resources, such as manuals and reference sheets, and emphasize the importance of careful, accurate coding. If coding is a challenge for your ASC, or you anticipate that it could become a challenge due to changes like staff turnover or the addition of one or more new specialties, consider outsourcing coding to ASC billing experts.
- Create a framework for appeals and denials. To streamline the appeals process, develop guidelines for each payer and document their appeals process, including documentation requirements, deadlines, format, and submission rules. Train staff on how to make articulate arguments to increase approval rate. This can include relevant background details to note, payer-specific language to use, and supporting documentation.
- Provide support and education for patients. Understand that patients may be worried about paying for their services and provide ways to help them make payments in a reasonable timeframe. This can include offering payment plans to help patients pay what they can, when they can, without disrupting the flow of the revenue cycle.
- Establish and measure performance against KPIs. To evaluate the efficiency and performance of ASC revenue cycle management, set metrics for monitoring and auditing. Example key performance indicators (KPI) include measuring prior-to-service collections, patient satisfaction with the billing process, cash collections as a percentage of net patient service revenue, clean claims ratio, and days in accounts receivable (AR). Regularly review metrics to identify concerning trends and potential areas of improvement.
- Implement advanced technology. The right technology can automate much of the revenue cycle. Surgery centers would be wise to partner with ASC technology companies that demonstrate expertise in the space and offer advanced tools, such as AI to assist with coding, predictive analytics to identify billing trends, and transcription services to support documentation. Technology developed with input from ASC billing experts is far more likely to deliver a solution that improves efficiency, reduces errors, and drives stronger bottom-line results.
While ASC revenue cycle management can be complex, these best practices can help ASCs turn good revenue cycle processes into great ones to better ensure payments flow without disruption.
Looking for a partner that can provide the technology and expertise needed to elevate revenue cycle success? Contact the ASC billing experts at SIS today!