4 Points on How ASCs Can Make Going Out of Network Work

Heather Linder - Print  |

In a recent webinar Kelly Webb, MediGain vice president and general manager of the ASC Billing Division, discussed how ASCs can grow revenue through analyzing payor mix and using both out-of-network and preferred provider organization insurance contracts.

The webinar, titled "The ASC Revenue Trifecta: Payor Mix, OON and PPO," lays out four points about using hybrid contracting to improve profits.

1. Why a hybrid mix of in- and out-of-network carriers can work. Currently, nearly 204 million Americans, or 69 percent, have healthcare coverage through a PPO, Mr. Webb says, and the numbers will continue to grow as patients increasingly want to choose their specialists. HMOs are being phased out.

"The selection of choices in PPOs is increasing," he says, "and huge premiums are being paid by employers and employees."

Going OON with certain providers is becoming more of a viable option for surgery centers looking to improve payments without alienating patients. PPO benefits have been paid for by the patient and the employer and should be used for a surgery, he says.

2. How to analyze payor mix. To ascertain how successful your center's current payor mix is, you can do a simple analysis of paid cases broken down per payor. By looking at the charges amount and number of cases, you can find the payor mix percent, average payment and percent of revenue, Mr. Webb says.

"If you are 100 percent Medicare-based or have a majority of Medicare contracts, you might want to look at changing or adjusting [that mix]," he says. "You can't grow in the industry without the resource of more money."

Mr. Webb recommends only agreeing to payor contracts that are not tied to a Medicare fee schedule. Medicare reimbursements will continue to go down, and ASCs would in turn also lose money on cases with commercial payors that base reimbursements on Medicare rates.

After analyzing the payor mix ASC leaders can determine how to work smarter by increasing the number of cases from the top paying insurance plans to get better revenue for the work they are already doing, he says.

"Think of ways to drive more patients from your better payors to grow your business," he says."

3. How to explain OON to patients. Before discussing OON benefits with patients, first begin with the general benefits of having surgery at an ASC versus at a hospital. Hospitals derive revenue from many more sources than an ASC so their cost is always higher. ASCs also have lower infection rates, on-site registered nurses and on-site physicians until patient checkout.

"People want to go to the best," Mr. Webb says. "The benefits of OON or an ASC are worth it compared to a hospital."

He recommends having an insurance coordinator explain plan benefits and costs to patients prior to and following surgery, which will put them at ease. Print out the patient's benefits and walk them through it.

"Do it days before," he says. "Set their expectations so it's not a surprise later. Have the cost spelled out to the best of your ability."

4. Avoid insurance manipulation. Insurance pre-verification is essential to getting OON claims processed. Many insurance companies have their own policies on how and when to pay. Surgery center leaders should educate their revenue cycle personnel on what questions to ask to properly verify benefits and avoid any denials or unpaid claims. Mr. Webb highly encourages billers to ask insurance company representatives how they will determine the allowable for OON.

ASC leaders also need to be vigilant to avoid contract manipulation. For example, some contracts may only agree to pay one charge line when many procedures require multiple charges, which is unfair. Other potential issues include hidden enrollments and hidden networks.

Have a healthcare lawyer review all contracts for fair terms prior to signing, Mr. Webb says.

"Feel free to push back on the terms," he says. "See what you are getting paid on the 4th and 5th line of the CPT charges in your area. You might be surprised how things are treated."


Download a copy of the presentation by clicking here.

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