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 Q&A with Jessica Nelson and Ann Thom

Jessica Nelson, Vice President of Revenue Cycle Services (RCS), and Ann Marie Thom, RCS Client Services Manager, for Surgical Information Systems (SIS), recently hosted a webinar on "Managing Your ASC's Managed Care Contracting." They provided insight and guidance for ambulatory surgery centers on how to effectively negotiate contracts, find opportunities for managed care contract improvement, spot warning signs, leverage out-of-network billing, and develop better payer relationships. The audience was engaged and asked great questions during the Q&A portion of the program which provided further opportunities for Jessica and Ann to discuss what ASCs should know about managed care contracting. 

Below are the highlights of those questions and responses provided by Jessica and Ann, edited for readability. To view the on-demand webinar, please visit the SIS Resource Library

Q: When negotiating on out-of-network (OON) claims, what is a reasonable threshold to accept?

A: This may vary by payer. Many payers utilize the Medicare ASC fee schedule as a basis to determine the OON allowable on claims. To determine a reasonable threshold, first determine if your payer is one of those that follows the Medicare ASC fee schedule. Next, review the historical payments for that payer and set your threshold accordingly. You want to set your threshold higher than your average payments to give yourself an opportunity for negotiation with the payer.

Q: What can I do to ensure I do not set an unfavorable precedent when negotiating managed care contracts?

A: To best ensure that you do not set an unfavorable precedent when negotiating payer contracts, make sure you are not negotiating on OON claims for amounts lower than what you are requesting payment for through the contract. Payers will look at historical OON claim negotiations, and if you are accepting far lower amounts, this may be factored into their decision.

Q: When negotiating a payer contract, is there a limit to the number of carveouts I can request?

A: This typically varies by carrier. However, you should go into the contract negotiation process with a plan of action on the number and types of carveouts you need, including the associated reimbursement amount you are seeking.

Leverage your reporting tools from your practice management system to run analytical data that will support the type of carveout request as this is key. You want to come to the negotiating table prepared with hard data so that these carveout requests meet your needs from a revenue perspective.

Q: If I notice potential negative trends, when should I go back to the payer to renegotiate my contract?

A: Once you identify a possible negative trend impacting your center, compile the quantitative data and immediately communicate with your provider network representative. Don't assume that nothing can be done. Rather, be open to conversations with your provider network representative and discuss how soon any remedies for this trend can be incorporated into the terms of your contract.

Q: I am handling my revenue cycle management in-house. What type of reports out of my software system would be best to run for historical data?

A: While not all ASC software systems have the same naming conventions for their reports, search for any that provide details about CPT/HCPCS summary data for date range by payer that include total charges, payments, and write-offs. You want to gather as much historical data as you can with a minimum of six months, but it's even better when you can get up to 1-2 years' worth of data. 

Q: Who on my billing team should I rely on to communicate about payer trends, such as an increase in underpayments or denials? 

A: In most cases, anyone who works in accounts receivables (A/R) would be the best resource given their involvement in all parts of the revenue cycle process. This individual could also be your payment poster, depending on the size of your ASC.

For those ASCs that have someone posting payments separate from A/R follow-up, your payment poster will be the first line of defense to notice an increase in improper payments. However, it is encouraged to bring awareness to everyone on your team about how their role in the revenue cycle can help spot these types of trends.