Steps to Evaluate Your ASC's Revenue Cycle Health
Whether a surgery center performs billing in-house, outsources it to an ASC billing company, or has its billing performed by a management company, there are numerous revenue cycle management processes that must be completed, and each plays an essential role in the financial health of a center. When even small issues with one or more of an ASC's revenue cycle processes occur, there can be significant short- and long-term effects on the bottom line, ranging from payment delays and denials to lost payments and compliance challenges.
With reimbursement tightening and expenses on the rise, ASCs cannot afford to allow their revenue cycle health to suffer due to avoidable or fixable problems. That's why it is essential for surgery centers to perform ongoing evaluation of their revenue cycle. Doing so will help identify problems early and implement lasting improvements.
Here are eight steps to evaluate your revenue cycle.
1. Perform ongoing monitoring and benchmarking of key performance indicators (KPIs). Ongoing monitoring and benchmarking of critical revenue cycle KPIs, including days to bill, days to pay, accounts receivable greater than 90 days, days to dictate, and denial rate, gives ASCs better control over their revenue cycle performance. Such efforts are strengthened when supported by next-generation analytics. This technology allows an ASC to take an even deeper dive into its revenue cycle data, unearthing insights that can be difficult to impossible to find using legacy platforms.
2. Conduct revenue cycle assessments. Monitoring and benchmarking of KPIs should be supplemented by revenue cycle assessments. These assessments include a comparison of your KPIs to industry standards, taking into consideration your center's specific qualities (e.g., specialties, payor mix) to turn up issues negatively affecting cash flow.
A revenue cycle assessment is completed through the evaluation of a random selection of cases. Taking a randomized approach helps ensure a variety of accounts receive scrutiny, which improves the likelihood of identifying minor and major issues impacting financial health.
3. Evaluate an appropriate number of cases. Assessments usually examine information from around 20 cases, although this figure can vary for reasons including size of the ASC (e.g., centers with multiple specialties may want to increase this figure and ensure each specialty has a meaningful number cases included), findings (e.g., fewer accounts if major problems are found to be recurring), or upon request (e.g., specific accounts associated with one or more staff members).
If your center contracts withan outside ASC billing service or has its billing performed by a management company, undergoing a revenue cycle assessment is still worthwhile. Such services are not void of problems. Even if an assessment demonstrates the service is functioning well, it's beneficial to confirm this is the case rather than assume it to be true.
4. Work with a third party. Revenue cycle assessments should be conducted by an experienced third party with ASC expertise. Such an organization will have the tools and knowledge to objectively review a surgery center's performance.
5. Be proactive. Maximize the benefits of a revenue cycle assessment by taking a proactive approach. If your ASC is experiencing cash flow problems, do not wait to schedule an assessment. With every day that passes, issues will likely magnify and become more difficult to address.
6. Make assessments routine. ASCs are best served by undergoing at least an annual assessment of their revenue cycle health. Make scheduling your assessment a recurring task on your calendar.
7. Don't let your guard down. Even if you believe your ASC's revenue cycle is performing effectively, it's still best practice to undergo an assessment. At a minimum, the assessment could confirm your beliefs. However, it's likely that the assessment will help you identify at least a few, new opportunities for improvement.
8. Undergo coding audits. Strengthen the value of your revenue cycle assessment by scheduling it in conjunction with a coding audit. While an assessment can point to potential coding problems, a coding audit will identify those issues with greater clarity and specificity.
Turning Knowledge Into Action
Ongoing monitoring and benchmarking of KPIs, revenue cycle assessments, and coding audits should provide your ASC with a clearer picture of its revenue cycle health. Now it's imperative that you act upon what you have discovered through these evaluations. Depending upon what you find, actions may include staff training, physician education on their role in the revenue cycle, renegotiation of managed care contracts, or even outsourcing your ASC billing or changing billing partners.
When you implement changes, closely evaluate the effects of those changes in the days, weeks, and months that follow. This will help you ensure they are having the desired impact on your ASC's financial performance.