For most ASCs, the upheaval caused by COVID-19 has left little time for reviewing managed care contracts and renegotiating with payers. But your ASC has likely undergone changes since March 2020, and payer contracts negotiated prior to the pandemic may not address case mix shifts and new trends.
Now that case volumes may be normalizing, it’s time to see where there may be room to optimize payer reimbursement. Below are eight ways to ensure ASC payer contracts stay current and maximize revenue through this difficult time and going forward.
1. Confirm Managed Care Contract Renewal Dates
Typically, contracts will remain in effect past the initial term or after the last annual increase. Not requesting annual increases can be costly. If you don’t ask for an increase when a contract’s term is up, the health plan will usually continue to pay the same rates.
2. Check Case Mix Shifts
In an effort to minimize COVID-19 exposure, patients increasingly are opting to have their outpatient elective surgeries conducted at ASCs instead of hospitals. Over the past year, we have seen a surge in spine and total joint cases migrating from hospital settings to ASCs. Additionally, higher-acuity case volume has grown across all specialties, so be sure contracts are appropriately reimbursing for these cases and payers are allowing and preapproving them in the ASC setting, especially for those Medicare deems inpatient only.
3. Review Claims Data
By comparing your current claims data to numbers from before the pandemic, you can project cost savings for both the ASC and payers.
- If there are new cases, where are they migrating from? Did the cases move from a higher-cost site of service for the payer? If so, quantify the cost savings for the payer over the course of a year for all cases so you can demonstrate this number during negotiations if necessary.
- Do you have new surgeons or specialists performing cases at the ASC? Are there any services your surgeons would like to bring to the ASC from the hospital setting? You can provide the anticipated cost savings to the payer by projecting the case volume for potential services that can migrate from the hospital to the ASC setting.
4. Involve Surgeons
Before you contact the payers, confirm case volume and cost data by talking to the ASC surgeons. Review this data with your surgeons and find out about any additional changes they are planning to their case mix and case volume at the ASC. Discuss the current trends and what is on the horizon for 2021 and beyond.
5. Identify Case Costs for New Services
Payers may want to know the costs involved in the new cases; be prepared to answer the following questions:
- Do any of the new cases include high-cost implant, such as total joints?
- Can you provide a sample of implant invoices for high-cost cases?
- If the payer includes the implant in the rate, provide the highest-cost invoices to ensure reimbursement covers the highest-cost scenario..
- If these cases are not yet being performed at the ASC, are there quotes from the implant vendor?
6. Analyze Implant Reimbursement
Determine whether your current contracts have reimbursement provisions and payment for high-cost implants. Are implants included in the surgery case rate, or will the payer reimburse the cost in addition to the procedure? If implant costs are included in the carve-out rate or case payment, determine the total cost for doing the case, inclusive of supplies, implants, and other operating expenses.
7. Evaluate Payer Fee Schedule
In some contracts, the payer fee schedule rates for certain specialties may need to be increased. Review the reimbursement for high-volume cases to see if increases are needed to improve your bottom line, accounting for annual growth to the cost of doing business, including any additional costs associated with COVID-19 protocols and PPE. Also, incorporate overall operating expenses, including salaries and benefits, for the ASC as part of the total cost for each case.
8. Include Business Office Staff
Your office staff are probably well acquainted with your payers’ reimbursement processes. Prior to renegotiating, ask them to document and summarize any payer issues that you can address. Are there issues or delays with large claims or implant reimbursements? Office staff can confirm whether the payers are reimbursing claims according to the payment time frames as required in your agreements. If they are not, your contract (or state prompt payment laws) may stipulate that you are due interest payments. Be sure to check the addendum language in your agreement for state regulations on interest payments.
Reviewing your data can lead to identifying improvements to your managed care contracts, enabling you to maximize revenue now. It is valuable to update payer contracts before expanding services at your ASC.
Published March 22, 2021