HOW TO IMPROVE

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HOW TO IMPROVE BILLING AND COLLECTIONS
CASE STUDIES
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PRESENTED BY
CARYL A. SERBIN, RN, BSN, LHRM PRESIDENT AND
FOUNDER SERBIN SURGERY CENTER BILLING, LLC
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CASE STUDY 1 ABC SURGERY CENTER
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Case Study reflects financial findings/recommendat
ions only additional clinical findings/
recommendations are not presented
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CASE STUDY - HISTORY

• 14 month old ambulatory surgery
• center evaluated because not
• meeting projected revenue
• Semi-rural area
• Joint-venture 7 physicians/
• local hospital
• Average case volume - 350 month

ABC Surgery Center
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CASE STUDY - HISTORY

• Specialties
• - ENT
• - GI
• - Ophthalmology
• - Orthopedics
• - Podiatry
• - Pain Management

• Payor Mix
• - Medicare
• - Medicaid
• - BCBS
• - W/C
• - PPOs
• - HMOs
• - Indemnity

ABC Surgery Center
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CASE STUDY - HISTORY

• Number of reasons for negative cash flow
• - Fee schedule far lower than normally
• seen in an ASC
• - Managed care contracts low with
• unfavorable terms
• - Improper billing/coding practices
• - Managers with no ASC experience
• - Inefficient use of staff
• - Appropriate structure and policies and
• procedures not in place

ABC Surgery Center
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FEE SCHEDULE

• Findings
• Evaluation of the fee schedule revealed
• that most fees were exceptionally low
• low compared to Medicare/BCBS ASC
• fees for this geographic locality
• Many fees were actually less than Medicare
  allowable
• Fee schedule had been based on
• physician DRGs
• No consistency in fees similar
• procedures had wide variances

ABC Surgery Center
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FEE SCHEDULE

• Recommendations
• Develop fee schedule based on
• percentage of Medicare group rates
• Carve-outs for higher ticket procedures
• Decide on additional procedure discount
• Sample fee schedule given to Board -recommended
  500 of current Medicare rates

ABC Surgery Center
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MANAGED CARE CONTRACTS

• Findings
• Low rates for an area with little managed care
  penetration
• Some reimbursement methodologies varied from
  market standard
• Unfavorable terms in contracts
• Most carriers require accreditation
• Some contracts were invalid as not voted on by
  Board

ABC Surgery Center
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MANAGED CARE CONTRACTS

• Recommendations
• Join local PHO and have them assist in
  recontracting for ASC
• Cancel five major contracts whose reimbursement
  is based on Medicare rate
• Great managed care market suggest renegotiate
  for reimbursement based on percentage of billed
  charges
• Move toward becoming accredited mark
  applications as Accreditation Pending

ABC Surgery Center
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CODING

• Findings
• Coder with no ASC or surgical coding experience
• Coding errors included
• - not coding for bilateral procedures
• - not coding for multiple procedures
• - lack of sufficient modifiers
• - improper or no billing of toe implants
• - wrong anatomical part
• - coding from title not from body of op
  note
• - no copy of coding history in patient chart
• - no cross check to ensure coded all cases

ABC Surgery Center
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CODING

• Recommendations
• Hire or outsource to certified coder, or
• Immediate coding certification training for
  current coder
• Code from body of operative note use additional
  information when necessary

ABC Surgery Center
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CODING

• Recommendations (continued)
• Rebilling of all claims with coding errors that
  result in differences in reimbursement
• Utilize coding form
• Utilize schedule to make sure all patients have
  been coded

ABC Surgery Center
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BILLING

• Findings
• Biller had no ASC/surgical billing experience
• No electronic filing all paper claims
• All business office uses same printer
• Billing for non-ASC services in same module
  cannot separate in reports
• No cross-check between coded cases and batch
  report

ABC Surgery Center
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BILLING

• Recommendations
• Hire experienced biller, or
• Immediate training for current biller including
  the following
• Electronic submission of all claims where
  possible

ABC Surgery Center
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BILLING

• Recommendations (continued)
• Additional printer near biller to run claim forms
• Purchase separate software module to bill for
  non-ASC services
• Balance billing batch report to coding
  forms/schedule to ensure no unbilled revenue

ABC Surgery Center
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PAYMENT POSTING

• Findings
• Payment poster not knowledgeable regarding
  managed care contract allowances no copy of
  contracts
• Accepts what payor allows write-offs are
  adjusted to match what is paid and not
  pre-approved
• Not checking to determine if refund due
• Not balancing to deposit

ABC Surgery Center
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PAYMENT POSTING

• Recommendations
• Hire experienced payment poster, or
• Provide payment poster with copy of contracts and
  ASC fee schedule
• If payment correct, transfer amount to be billed
  to secondary insurance or patient and send
• If not paid correctly or denied, start denial
  process
• If overpaid, begin refund process
• Balance payment batch to deposit log

ABC Surgery Center
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COLLECTIONS

• Findings
• Collections not being done regularly due to lack
  of business office staff
• No system in place to determine oldest accounts
  and when to place with collection agency
• High dollar amount over 150 days old -
  investigate to determine how much collectible

ABC Surgery Center
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COLLECTIONS

• Recommendations Insurance Carriers
• Use Aging by Carrier report to develop collection
  schedule
• Check all outstanding balances with each carrier,
  oldest first
• Remind carrier of state prompt payment regulation
• Resubmit bill and/or additional documentation, if
  applicable

ABC Surgery Center
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COLLECTIONS

• Recommendations Insurance Carriers (cont)
• Develop tickler system to follow-up on promised
  payments
• Future collections follow-up in 15 days to make
  sure carrier received claim
• Follow-up at 30 days to determine if carrier is
  following prompt payment rule
• Document in patients account

ABC Surgery Center
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COLLECTIONS

• Recommendations Patient Accounts
• Collect deductibles and copays up-front
• Perform patient financial counseling prior to DOS
• Bill patients monthly
• Add notes that increase in language as account
  ages
• Contact patients by phone to determine status and
  offer payment alternatives, i.e., credit card,
  payment schedule, etc.

ABC Surgery Center
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UNBILLED REVENUE

• Findings
• Unbilled revenue due to
• - bilateral proceduressecond side not billed
• - billing from operative note title only
• Sample coding review - 61 charts revealed
• 27 errors - estimated loss of allowable net
• revenue 33,396
• Review of accounts over 1 year old which
• received no payment and were never
• rebilled - 79,124 gross

ABC Surgery Center
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UNBILLED REVENUE

• Findings (continued)
• 12 patient accounts not paid or rebilled
• (21,338) few days short of 12 months
• rebilled immediately to avoid timely filing
• Balances never transferred nor billed to
• secondary insurance and/or patient
• responsibility
• Coding and billing are non-compliant due to
• - inequity of charges
• - inequity of balance billing
• - errors

ABC Surgery Center
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UNBILLED REVENUE

• Recommendations
• Check all accounts over one year old to
• determine if can be rebilled
• Assess all accounts over 150 days to
• determine need for collection, adjustments,
• before exceed statute of limitations
• It may be more cost effective to outsource
• coding/billing/collections than to retrain and
• oversee current employees while trying
• remain current and recoup old revenue

ABC Surgery Center
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THE BUSINESS OFFICE
STAFFING

• POSITIONS DIRECTLY AFFECTING REIMBURSEMENT (Not
  Including Mgmt)
• Scheduler
• Admitting clerk (receptionist)
• Insurance verification specialist
• Patient financial counselor
• Coder/biller
• Payment poster/collector
• Number of employees per position
• dependent on caseload

ABC Surgery Center
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STAFFING

• Recommendations/Findings Business Office
• Currently whoever answers main phone line
  schedules patient
• Suggest dedicated phone line for scheduling
• Suggest one employee be assigned to schedule
  others can be back-up
• Have Business Office Manager learn all business
  office positions and act as back-up
• Develop business office policies and procedures

ABC Surgery Center
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STAFFING

• Recommendations/Findings Business Office
• If maintain billing in-house
• - Add one FTE to business office staff
• best choice receptionist (lower salary
• and less training required)
• - Move current receptionist/biller to full
• time biller
• - Change current coder/biller to coding
• and collections
• If outsource billing no additional staff needed

ABC Surgery Center
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STAFFING

• Recommendations - Business Office Manager
• Hire experienced ASC Business Office
• Manager, or
• Educate current BOM in following areas
• - write-offs
• - adjustments
• - checking for errors
• - collection agency
• - refunds
• - audits

ABC Surgery Center
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FINANCIAL PRACTICES

• Findings
• No counter-check of deposits
• No auditing of coding/billing
• Reports invalid as reflect another
• business as well as ASC

ABC Surgery Center
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FINANCIAL PRACTICES

• Recommendations
• Utilize bank lock-box if available
• If doing deposit in-house
• - utilize and balance to deposit log
• - separate payment posting and deposits
• - BOM should check deposit for accuracy
• - BOM or designee make daily deposit
• Weekly audits of coding and billing
• Move other business billing functions into
• separate module

ABC Surgery Center
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RESULTS

• Governing Body approved and adopted
  recommendations
• Hired outside management to institute changes
• Outsourced coding and billing functions
• Discontinued secondary business in ASC
• Made other clinical changes not discussed in this
  report

ABC Surgery Center
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RESULTS

• Within 3 months surgery center in the black for
  first time
• Gross charges tripled
• Average gross charges per case doubled
• Collections increased more than 250
• Profit increased more than 400
• Net income/case increased more than 300

ABC Surgery Center
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CASE STUDY 2 XYZ SURGERY CENTER
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Case Study reflects financial findings/recommendat
ions only additional clinical findings/
recommendations are not presented
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CASE STUDY - HISTORY

• 10 month old ambulatory surgery
• center evaluated to determine
• compliance and efficiency and
• evaluate billing process
• Semi-rural area
• Solely owned by physician and
• non-physician partners
• Average case volume 80-100 month

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XYZ Surgery Center
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CASE STUDY - HISTORY

• Specialties
• - Orthopedics 50
• - Ophthalmology 25
• - Pain Management 13
• - Urology 6
• - Podiatry 6

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XYZ Surgery Center
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CASE STUDY - HISTORY

• Payor Mix
• - Medicare
• - Medicaid
• - BCBS
• - W/C
• - PPOs
• - Indemnity
• Contract reimbursement is based on a
• mixture of
• - percentage of Medicare groups
• - discount off billed charges

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XYZ Surgery Center
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SOFTWARE

• Findings
• Sharing practice management software with clinic
• Software does not allow loading of contracts
• Shared schedule with clinic
• Software does not have place for Medicare groups
  nor APCs
• Clearinghouse (part of software) reports not
  accurate

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XYZ Surgery Center
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SOFTWARE

• Recommendations
• Consider purchasing ASC-specific software need
  to be able to schedule separately and load
  contracts
• Suggest changing to independent clearinghouse

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XYZ Surgery Center
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FEE SCHEDULE

• Findings
• Evaluation of fee schedule revealed that many
  fees were less than some contracts would
  reimburse
• No minimum fee some fees as low as 200 - 300

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XYZ Surgery Center
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FEE SCHEDULE

• Recommendations
• May want to review entire fee schedule based on
  evaluation and comparison to reimbursement, as
  well as case cost
• Suggest minimum fee of 1200 to 1500

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XYZ Surgery Center
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MANAGED CARE CONTRACTS

• Findings
• ASC does not have copy of most
• contracts
• Contracts not loaded in computer
• No insurance matrix available to
• determine accuracy of payments

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XYZ Surgery Center
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MANAGED CARE CONTRACTS

• Recommendations
• Request copies of all contracts
• If change software, load
• contracts and adjust contractual
• allowances at time of billing
• Develop insurance matrix and
• provide to appropriate billing
• personnel

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XYZ Surgery Center
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CODING

• Findings
• Physicians doing procedure coding -
• diagnosis coding done by clinic coder
• Back-up coder has no formal coding or ASC
• experience also does billing, payment
• posting, collections for both ASC and clinic
• No substantiation with operative note
• Not being done daily
• Most implant invoices and pathology
• reports not provided to biller

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XYZ Surgery Center
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CODING

• Findings (continued)
• Current coding books present no CCI
• or other unbundling references
• No coding audits being performed
• 50 charts provided for coding review
• - 24 charts had errors
• - additional charts had insufficient
• back-up support for implants
• - 4,328 unbilled revenue
• - 5,558 over-billed revenue

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XYZ Surgery Center
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CODING

• Recommendations
• Utilize certified coder
• Code from operative note
• Track pathology reports and provide
• to coder
• Code daily and balance to schedule
• Subscribe to CCI edits to prevent
• unbundling

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XYZ Surgery Center
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CODING

• Recommendations (continued)
• Separate coding/billing from payment
• posting/collections
• Audit to check for unbilled revenue or
• over-billed amounts needing refund
• Continued monthly audits to remain
• compliant
• Provide information to physicians
• regarding detailed dictation

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XYZ Surgery Center
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BILLING

• Findings
• Claims are not being sent until at
• least 7-10 days post surgery
• Batches are not closed daily
• therefore not able to balance to
• schedule to prevent unbilled revenue
• Payments and charges are
• combined in same batches

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XYZ Surgery Center
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BILLING

• Findings (continued)
• Contract profiles added based
• on what is being paid
• ASC staff members unaware of
• upcoming 2008 Medicare changes
• No out-of-network policy in place and
• no advance notification to payors
• Contractual adjustments not done
• at time of billing

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XYZ Surgery Center
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BILLING

• Recommendations
• Separate payment and charge batches
• Keep necessary back-up of all charges
• Bill electronically wherever possible
• Develop tracking system to ensure
• billing for all implants

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XYZ Surgery Center
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BILLING

• Recommendations (continued)
• Run clearinghouse reports verify
• claim on file with payor
• Process all claims within 48-72 hours
• from DOS
• Notify all carriers of OON status on
• claim
• Correct all errors/unsubmitted claims
• found on coding review and rebill

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XYZ Surgery Center
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PAYMENT POSTING

• Findings
• Payment poster wears all billing hats
• for clinic and ASC insufficient time
• A/R is increasing one week ago hired
• additional collector
• Payment poster does not have
• knowledge of managed care contract
• allowances does not have copies
• Accepts what payor allows write-offs
• are adjusted to match what is paid

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XYZ Surgery Center
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PAYMENT POSTING

• Findings (continued)
• Some secondaries have not been billed
• assigned to patient responsibility in error
• Undetermined whether OON payments
• going to patient no attempt to collect yet
• No way to balance to deposit as payments
• and charges are in same batch
• Not starting proceedings with denials or
• incorrect payments in timely manner

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XYZ Surgery Center
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PAYMENT POSTING

• Recommendations
• Provide payment poster with copy of
• all managed care contracts and/or
• contract matrix
• Payments should be posted daily
• Bank deposits should be made daily
• Keep necessary back-up of all
• payments received

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XYZ Surgery Center
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PAYMENT POSTING

• Recommendations (continued)
• Review EOBs and promptly start denial
• process for erroneous payment or no
• payment
• When posting, compare payment to
• original claim to determine accuracy
• Credit balances to be reviewed and
• promptly refunded, where applicable

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XYZ Surgery Center
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COLLECTIONS

• Findings
• Collections not being done regularly
• due to lack of business office staff
• No upfront collections
• No brochure for patients to outline
• financial policy
• No policies/procedures on billing or
• related issues
• No accounts have been placed with
• collection as no follow-ups done yet

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XYZ Surgery Center
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COLLECTIONS

• Findings (continued)
• No training in Fair Debt Collection
• standards
• Medicare claims not crossing over
• to secondaries
• 30 day prompt payment law
• Days in A/R 79
• Over 120 22 (mostly insurance)

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XYZ Surgery Center
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COLLECTIONS

• Recommendations
• Review accounts that were denied or
• paid in error and rebill where applicable
• timely filing may become an issue
• Follow up on OON claims determine
• which paid to patient and send
• statements
• Need to audit Medicare and insurance
• payments to detect overpayments
• correct and issue refunds where
• necessary

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XYZ Surgery Center
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COLLECTIONS

• Recommendations
• Use aging reports to aid in collections
• Use tickler files
• Evaluate/correct problem with Medicare
• secondaries
• Enforce prompt payment rule
• Institute upfront collection of deductible
• and copays
• Establish financial policies/procedures

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XYZ Surgery Center
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STAFFING

• Findings
• Administrator has no previous ASC
• experience
• No business office manager
• Only two FT business office employees
• Billing staff leased part time from clinic
• Few business office policies/procedures
• Vague job descriptions no real
• accountability

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XYZ Surgery Center
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STAFFING

• Recommendations
• Separate clinic and ASC staff if possible
• If billing remains in-house, recommend
• hiring full time experienced coder/biller
• for ASC
• Suggested some changes in positions to
• cover all tasks
• When caseload increases, recommend
• hiring working business office
• coordinator who can fill any position as
• needed

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XYZ Surgery Center
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MISCELLANEOUS

• Findings and Recommendations - STAFFING
• Information flow is fragmented
• between clinic and ASC recommend
• evaluation and change
• Need specific business office policies
• and procedures and job descriptions

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XYZ Surgery Center
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MISCELLANEOUS

• Findings/Recommendations COMPLIANCE
• Not enough separation between Clinic ASC
• Billing and payment posting should be
• separate and done by different employees
• Three members of business office staff
• should review deposits
• No Business Associate or confidentiality
• agreements
• No financial policy information available to
• patients

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XYZ Surgery Center
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MISCELLANEOUS

• Findings and Recommendations 2008
  MEDICARE CHANGES
• Administrator attended educational
• seminar on 2008 Medicare changes
• Suggest share information with key
• personnel and billing staff
• Evaluation team provided copy of
• proposed reimbursement to ASC

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XYZ Surgery Center
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RESULTS

• Governing body approved and
• adopted recommendations
• Outsourced coding and billing
• functions
• Made other clinical changes not
• discussed in this report

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XYZ Surgery Center
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RESULTS

• Outsource date - January 1, 2008
• Average caseload 100/month
• Accounts receivable decreased 25
• Over 120 decreased from 22 to 8
• Average Collections increased from
• 160,000 to 250,000 per month
• Average Gross Charges increased from
• 353,860 to 584,055
• Days in A/R decreased from 79 to 44

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XYZ Surgery Center
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TWO CENTERS - COMMON THEMES

• Inadequate fee schedule
• Poor managed care contracts
• No copies of managed care contracts
• Insufficient staff
• Wrong staff
• No good policies/procedures in place
• Compliance issues
• No consistency in billing practices
• Not billing for implants regularly

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QUESTIONS?
Caryl Serbin 239-482-1777 cas_at_surgecon.com
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