ASC Reimbursement: How It’s Changing

Reimbursement for ambulatory surgery centers (ASCs) is affected by several factors — some of which the ASC controls and some which are dominated by outside influences. This article initially identifies the ones over which the ASC has control, but primarily examines the outside influences in more depth and helps determine how to keep them from financially ruining your ASC. By understanding the effect these factors can have, we are better able to establish positive methods to handle them successfully.

Controlled Areas

FeeSchedule: For example, the ASC develops and controls its fee schedule. The fee schedule sets the financial framework for the ASC. If structured correctly, this is a benchmark on which the ASC can measure the appropriateness of their managed care contracts, predict their contractual adjustments and forecast their profit margin.

Managed Care Contracts (MCOs): Although the ASC is not in complete control of their managed care contracts, skillful negotiation can provide your ASC with the best reimbursement possible from a specific carrier in your locale. For better negotiation:

• Know what reimbursement you need to make a profit
• Be aware of what you offer the company’s contract holders that no one else in your area provides
• Understand contract language and what it means to your ASC
• Question them about repricing networks
• Determine how they base their rate structure, i.e., unpublished UCR or Medicare (2007 groupers or more current).

Be prepared to walk away from a contract if you cannot agree on terms; however, it’s also important to understand that MCOs are curtailing out-of-network reimbursement by making their payment requirements more stringent and the reimbursement rates lower so balance the pros and cons when deciding whether or not to contract.

Accounts Receivable: One of your biggest assets is your accounts receivable, so don’t skimp on the caretakers of this important resource. Appropriate scheduling, patient registration, insurance verification and patient financial counseling are important stepping stones to getting reimbursed. However, the coders, billers, payment posters and collectors in your office are the ones that can make the difference between “just getting by” and financial success. Hire intelligent and experienced staff members and pay them a fair salary and benefits or outsource your coding and billing to an experienced ASC billing company. Remember, these people are the ones that can make the difference between just “getting paid” and “getting paid right.” Set goals, measure the success rate and audit regularly.

Uncontrolled Areas

Now let’s discuss the powers that be that have a direct influence over your financial success or failure. Although you may not be able to change how they reimburse your ASC, learning how to excel while playing their game is your best defense. The biggest players in this division are CMS and the economy. There are other smaller players such as workers compensation (WC). In some states WC is making changes in its reimbursement structure, usually going from a percentage of billed charges to structures based on Medicare rates and/or engaging repricing networks. Research your state’s WC payment structure and see if there are changes pending.

I. CMS

Reimbursement Rates and Rules
Believe it or not, we are almost two full years into the three-year conversion to the new ASC reimbursement plan. In January the proposed rate will be comprised of 75 percent of the new rate structure plus 25 percent of 2007 ASC rates. However, these rates will differ from the methodology used in 2008 and 2009 in that it will include a 0.6 percent adjustment for inflation. Other factors impacting the proposed 2010 ASC rates are changes in OPPS and physician rates as well as modifications to the wage index. There are also 28 procedures that have been added to the ASC list.

In the two years that ASCs have been working with the new reimbursement plan, there have been many areas of change in the billing process. In addition, some CMS changes have been adopted and/or modified by others in the insurance industry. Therefore, some of the changes listed below are CMS-specific while others are now being used by other payors.

Coding has been affected by:

• Device intensive procedures
• Procedures with allowances for implants included
• Changes in modifier usage
• Coding for drugs, X-rays, supplies
• Keeping up with CMS quarterly additions and deletions

Claim submission changes include:

• Electronic submission requirements
• Industry changes in claim form population
• Proper implant billing for those procedures with allowances included in fees, e.g., device intensive procedures and others whose allowance is less than 500 percent of facility fee
• Use of 50 modifier rather than right/left (payor specific)
• Payment posters and collectors have become aware of:
• EFT/ERA – more payers using electronic submission of payments
• Money arriving before EOB
• Increased denials due to stricter adherence to administrative policies, e.g., medical necessity, clean claim requirements, etc.

The greatest advantage gained from these changes is that it seems that Medicare’s reimbursement for a clean claim has improved in promptness and consistency. During this first two-year period, reimbursement personnel have often been stressed to keep up with the changes; however, most of those in the reimbursement trenches are now veterans and facing 2010 changes certainly do not hold the terror that it did in 2008.

Although not directly related to your reimbursement, the following areas need to be addressed as part of the increasing complexity of billing and collecting for services in your ASC.

Compliance
During the past year it seems that a lot of health-related news is about Medicare fraud. While OIG auditing has been present for many years, new technology and the increased use of bounty hunters (RAC auditors) is making closer scrutiny a very real possibility. Although ASCs do not seem to have been a target thus far, it is best that your ASC review its reimbursement policies and make adjustments where necessary, and make sure your staff is following the policies. Being prepared is your best defense.

Red Flag Rule/HIPAA
Although most ASCs do not consider themselves as lending creditors, the FTC stipulates that a medical facility that does not collect all monies owed at the time of service, but extends credit to the patients by waiting for the insurance to pay and/or by sending statement for amounts owed is considered a creditor. This means that the center must make arrangements to protect their clients/patients from identity theft. There are many canned Red Flag Rule policies and procedures available so be sure that your center finds one, adapts it to your needs and has it approved by the governing body. Most importantly, educate your staff and ensure that they adhere to these procedures. Implementation for having these policies and procedures approved and in place has been extended to Nov. 1, 2009.

Conditions of Coverage
The conditions of coverage set by CMS are another area of compliance that may indirectly affect your reimbursement. These conditions must be met or the OIG could prevent your center from being a sanctioned Medicare provider. These conditions address:

• 24-hour stays
• Patient rights regarding physician ownership disclosure, confidentiality, advance directives, grievance process prior to date of service (this has been modified for some scheduling of same-day procedures)
• Quality assessment and performance improvement
• Infection control
• Appropriateness of ASC setting for patient care
• Disaster-preparedness plans

II. Economy

Patient Caseload
The biggest impact caused by the economic downturn has been a very noticeable decrease in elective surgery and an even larger decrease in cosmetic surgery due to unemployment and no insurance coverage.

Reimbursement Changes

• Employer-provided insurance plans now often have higher deductibles and lower benefits resulting in an increase in patient payment plans.
• ASCs are working with self-pay patients by allowing longer payment plans and fewer dollars per month
• MCOs using the economy as an excuse for requesting additional discounts, increased denials, slow down of reimbursement.
• States are running short of funds which may affect reimbursement for workers compensation, Medicaid, state regulated organizations

As we are all learning to deal with the economic changes, ASCs are becoming more creative with their scheduling and staffing with some centers closing down certain days or half-days. Increasing geographic coverage areas and clever inexpensive marketing are becoming the norm. Recruiting of physicians has become more aggressive with more block scheduling times available.

In conclusion, these changes in reimbursement are not all negative. Overall, Medicare reimbursement is improving. You can find good communication, support and learning tools provided by both CMS and the ASC Association. There have also been some positive learning experiences brought about by the economic changes – taking us back to basics in maintaining your ASC’s profitability until the economy begins its return to normal.

Caryl A. Serbin, RN, BSN, LHRM, is president and founder of Serbin Surgery Center Billing, LLC and Surgery Consultants of America, Inc.

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