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Increase the Profit of a Surgery Center

Updated on February 26, 2014

Simple chores for the ambulatory surgery center that can improve your efficiency and overall profit margins.

1st. Out of Network Surgery Centers

Those of us whom have been in the managed care arena knows of the impact that pre-negotiated rates and charges for procedures can have on the cash flow of any in network provider. However, most of us that now work in the out of network setting with surgery centers, we think that because we are in the “in” we no longer have to partner with the insurance plans to get their buy in(s), if you will. Don’t be so sure of yourself if unless you’ve tried the same approach. Think about it like this; the surgery scheduler gets the call to book a case for patient that is out of network. She collects the insurance information already and provides verification to this insurance carrier to ensure it’s active and within the plans allowable for the case to proceed, right? But, did you ever stop to think how effective it could be for her or management to take this one step even further with the carrier? What if you could get the carrier to give you a preauthorization number for a case that was out of network, don’t you think you’d get paid more timely? You should. The carrier already sees you as the enemy; Why not make them your ally?

By negotiating the case with the carrier, you become the ear that typically doesn’t listen. You become a friend they never knew existed. You begin to convey to them that you are looking out for the better interests of the patient. The patient wants to have surgery in your center. So why not come to a compromise that proves cost effective for both sides, the ASC and the Insurance Carrier? Both wins, plus the patient are winning two-fold. No one stands to loose except for waste and abuse of labor dollars fighting, appealing, collecting, and managing those denied, delayed claims the ASC submits otherwise. Try it; don’t be so sure it won’t work. It can, it should, and it will!


Receiving denials from payers is one aspect of the billing and collections process surgery centers deal with on a routine basis. However, many ASCs fail to implement a system of tracking and trending for these denials, which is, in his opinion, the most common mistake ASCs make when it comes to their billing practices.

“Most surgery centers will fix the individual denial, resubmit the claim and in many cases eventually receive payment,” Mr. Lair says. “But, they don’t aggregate these denials in a report to see what the root causes of the denials are.” Mr. Lair suggests developing denial reports so that the center can look at denials by payor, surgeon, referring physician, procedure, etc. “Centers can use these reports to pinpoint where errors and omissions that most frequently result in denials occur and then attempt to reduce those mistakes through education,” he says. Gathering data on the number and dollar amounts of denials can also provide ASCs with additional information when discussing problems with payers or surgeons.

3rd. Identify Experts.

Surgery centers often only employ one or two coders and/or billers to handle all of the functions of the billing office. According to Mr. Lair, this can lead to errors due to the volume and variety of work the billers are required to do.

“Typically, centers find one or two employees to perform all functions, and they expect that single person to be an expert in all of them,” Mr. Lair says. “This rarely works. We typically see that they will excel at some, but fail at others; a Jack of all trades is a master of none.”

While some centers are able to work well with just a few billers and coders, Mr. Lair notesThat in other centers something — compliance, cash collections, etc. — will usually suffer as a result. Adding staff or outsourcing some operations may be justifiable if a decrease in errors and Increase in efficiency leads to improved financial results that cover these costs.

4th Inaccurate Dictation.

"This transcribed report looks like swiss cheese with all these holes left in the report". We all have thought this at some time or another, true. Swiss cheese is what it looks like. But, think of the holes as lost dollars to the surgery center's bottom lines.

Coders rely on accurate dictation of procedures from surgeons so they can bill appropriately for them. Surgeons performing their dictation immediately post operatively not only impacts the quality of care the patient receives post-op, but it can play a huge role on the credibility of the case in receiving justifiable timely payments to the service providers like the ASC. What we implemented in one of our surgery centers was a complete fix-all that might work for you in that we installed a Dictaphone type microphone and ceiling mounted it by the operating room overhead light. The microphone was engineered to be in tandem with the lights and not compete for the space that they both occupied to prevent any sort of compromise with the two. Then as the case ends, the closure of the incision is begun – the circulator then reaches and pulls the microphone over to where it is closer to the side of the surgeon, the opposite side of the assistant or techs. Then, the surgeon begins to dictate his operative reports as he is closing the wound. Yes, the transcribers may need to listen more closely and it may take the transcriber twice as long to transcribe, but remember they are paid per line of transcription so it’s really none of your worry how long their process takes them. This technique more than paid for itself in a matter of two to three days in the increase in revenues the reports provided the coders to code and then bill for with modifiers, co-morbidities, complications, you name it, it finds it’s way there when there is a credible report to read and pull.

Mr. Lair says that many times coders will bill correctly for the main procedures but miss add-ons if the report is not clear. “Dictation and transcription are often done quickly so they can get to billing,” Mr. Lair says. “However, ASCs can take these missed add-ons as opportunities to educate staff members and find more revenue.” Mr. Lair suggests having coders sit down and look over reports with the surgeons every six months.

“The coder can say to the surgeon, ‘When you do this procedure, you missed these steps in the report,’” he says. “Or the coder can help to point out trends in the surgeon’s procedures. By looking over the reports, the coder and the surgeon can try to create a thorough report so that centers are not over- or under-billing.” Mr. Lair does caution that the purpose of this analysis is to address deficiencies in documentation, not to look for an opportunity to “pile on the charges.” Clinically appropriate documentation and coding is the objective.

In summation:

While the world is at war, while the health care reform is at a full despair; we have the chance to continue to sit back and complain and even give cause to our reasoning that the problems of the world cannot be made better with just you and me or we can take to the calling of being in the right place at the right time for the right to make change. Each of us has the empowerment to make change begin in us and around us, what better place to start a revolution of good change, change that can make a difference for us, for health care, for patients, and for vitality. I pause to reflect on Albert Einstein most infamous quote, “Insanity: doing the same thing over and over again and expecting different results...”

© 2011 The Compliance Doctor


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    Denver Surgery Ct 6 years ago

    wow this article is just what i was looking for, and here it is all done and ready for my implementation. Thank you Compliance Doctor.