Monitoring revenue cycle key performance indicators (KPIs) is an essential process for improving ASC business office productivity. But monitoring alone will not achieve the positive changes necessary to effectively grow the bottom line. The first article in this two-part series identified ASC revenue cycle KPIs worth tracking while explaining the importance of monitoring these KPIs, sharing target benchmarks, and noting warning signs that may indicate a suffering KPI. This second part dives further down into these KPIs.
For some, we note common problems associated with a poorly performing KPI and describe solutions to help overcome such obstacles to success. For others, we provide guidance for effectively analyzing trends.
· Claim submission errors.
· Failure to submit documentation required by the payer (e.g., invoices, medical records).
· Billing for procedures not covered per local coverage determinations (LCD) (i.e., medical necessity) requirements.
· Front office issues, including failure to secure procedure authorization and incorrect verification of benefits and coverage specific to the scheduled procedure.
· Perform QA review on claims prior to submission to help ensure accuracy.
· Ensure the charge entry team understands the specific contracts and payer rules on required documentation for full payment of the claim. Submit documents up front.
· Coding and billing teams should understand when a code will not be payable. If the coding or billing team identifies a code that will not be payable, the business office should be notified immediately. If there is a non-payable code issued, conduct a code review with all medical records to determine whether there is an alternative, payable, and compliant code. If no such alternate code exists, the provider should review the case, along with the local coverage determination requirements, to determine whether an amended report is justified.
· Many front office issues can inflate the denial rate. Authorization is commonly associated with denials. Denials related to authorization can occur if the insurance representative fails to provide the correct information, the insurance verifier is not asking the correct questions, or the scheduled procedure code differs from what was performed. If the code changed and authorization was required, address it immediately. Some payers will only change an authorization up to 14 days past the date of service. If the change is not completed during the 14-day period, the payer will likely issue a permanent denial.
Track the types of denials specific to ICD-10 and provide ongoing provider education.
Include authorization numbers on the claim form to avoid erroneous denials. If billing a different CPT code from what was scheduled, confirm whether updating the authorization is permissible with the payer or if a denial is first required before submitting an appeal. Immediately address instances of insurance verification team members failing to obtain required authorizations.
Provider education is the most important solution to decrease denials for medical necessity.
The clean claim percentage declines each time a claim is submitted and rejected. There are many possible causes for rejections of claims, which a clearinghouse should identify and share. If the clean claim percentage decreases below 98%, evaluate the rejection reasons and implement a process to avoid them.
Provided that work on AR buckets is consistent, the percentage of collections for cases greater than 90 days should remain consistent. If collections on older cases decrease, this may indicate the AR team is failing to focus on older AR and represents a potential follow-up opportunity.
If business is consistent year over year, all metrics should line up. This should allow for identification of typical lower and higher production/performing months. If volume and charges are consistent but cash is lower, this indicates one or more issues: contract, payer/specialty mix, and/or revenue cycle management (e.g., denials, authorizations).
How to analyze the metric's trends: Best practice is to create specific journal codes to monitor back-end adjustments. Break out adjustments to track the type of denial or bad debt write-off. Monitor adjustments monthly. This will help ensure consistency in patient collection agency referrals.
Trend revenue per case by financial class and specialty to ensure consistency. If a month drops significantly, this can indicate an issue with missed implants, missed charges, or a contract.
· Trending refunds, credit balances, and collection agency referrals is important to ensure there are no breakdowns in processes. Such processes often fall through the cracks. Keep them as high-priority responsibilities.
· Resolve patient credit balances monthly. When resolved monthly, refunds will remain current.
· Monitor for potential government overpayments. Refund any in a timely manner.
· Review all other insurance credit balances monthly. Note completion of the review in the account.
· Many practice management systems provide visibility into materials management information and can perform cost analysis to help ensure no loss of revenue.
· Run necessary reports to identify areas of deficiency and address them immediately. This may involve losses due to medical necessity denials, providers using implants not covered per contracts, and other issues.
How to analyze this metric's trends: Track and run reports on the total number of cases open in AR. This metric should be fairly consistent, particularly when AR is clean. If the total number of cases begins to track higher and volume remains consistent, this indicates a failure to resolve cases in a timely manner.
· Billing on the back end is not always necessary if the front office effectively verifies insurance benefits and calculates patient responsibility. If a patient is left with a balance after adjudication of a claim, begin sending statements immediately. Most ASCs send 2-3 statements and make at least 1-2 phone calls before turning accounts over to collections.
· Track refunds issued and balances owed by patients, broken down by payer. This will help identify if specific payers are associated with challenges faced by front office staff in their efforts to calculate patient responsibility.
Knowing KPI-associated problems to watch for, what corrective actions to take when performance starts to suffer, and how to more effectively assess KPI trends will put an ASC in a position to achieve meaningful, lasting improvements that can greatly impact short- and long-term financial stability and profitability.
When it comes to ASC medical billing, Medical Billers and Coders (MBC) is one of the leading service provider. With our 15+ years of experience in the medical billing domain and with our proven ASC medical billing services, many surgical centers across the country have overcome denials and underpayments. Our billing professionals not only specialize in ASC coding and billing but also incorporate the knowledge throughout the process. To know more about our ASC medical Billing services you can contact us at firstname.lastname@example.org