Ambulatory Surgery Centers (ASCs) play a critical role in delivering cost-effective, high-quality outpatient surgical care. However, despite their efficiency, ASCs often face significant challenges in revenue cycle management, particularly due to underpayments. Identifying and addressing common underpayment scenarios is crucial for recovering lost revenue and maintaining financial health.
In this blog, we’ll explore common underpayments in ASC billing, their causes, and actionable strategies to recover lost revenue effectively.
Common Causes of Underpayments in ASC Billing
1. Contractual Discrepancies
Payers sometimes fail to honor agreed-upon rates outlined in contracts. This often occurs due to system errors, outdated payer software, or misinterpretation of contract terms.
2. Coding Errors
Incorrect CPT or HCPCS codes, missing modifiers, or mismatched diagnosis and procedure codes can lead to claim denials or reduced reimbursements.
3. Unbundling of Services
Payers may inappropriately “unbundle” procedures that should be reimbursed as a single service, resulting in lower payments.
4. Missed Add-On Codes
Failing to include legitimate add-on codes for procedures can result in underpayments.
5. Failure to Capture Implants and Supplies
Many ASCs incur significant costs for implants and supplies but fail to bill or receive full reimbursement for them.
6. Insurance Verification Errors
Inaccurate or incomplete insurance verification can lead to denied or underpaid claims.
7. Timely Filing Issues
Claims not submitted within the payer’s filing deadline are often denied or partially reimbursed, resulting in lost revenue.
Strategies to Recover Lost Revenue
1. Perform Regular Contract Reviews
Action: Compare payment records against the agreed terms in payer contracts.
Benefit: Identifies underpayments due to rate discrepancies and ensures payers adhere to contract terms.
Pro Tip: Use contract management software to track and analyze contract compliance.
2. Invest in Coding Accuracy
Action: Ensure coders are well-trained and certified in ASC-specific billing and coding.
Benefit: Reduces claim denials and ensures accurate reimbursement for all services performed.
Pro Tip: Implement regular coding audits to identify recurring errors and provide corrective training.
3. Scrutinize EOBs and Remittance Advice
Action: Review Explanation of Benefits (EOBs) and remittance advice for underpayments or adjustments.
Benefit: Identifies reasons for payment discrepancies and provides a basis for appeals.
4. File Appeals Promptly
Action: Challenge underpayments by filing timely appeals with supporting documentation.
Benefit: Helps recover revenue that would otherwise be lost due to payer errors.
Pro Tip: Assign a dedicated team to handle appeals and track success rates.
5. Track and Report Implants and Supplies Correctly
Action: Use billing software to document all implants and supplies with appropriate codes.
Benefit: Ensures ASCs are reimbursed for high-cost items.
6. Outsource Revenue Cycle Management (RCM)
Action: Partner with a professional RCM company specializing in ASC billing.
Benefit: Leverages expert knowledge, reduces errors, and improves cash flow.
Pro Tip: Look for RCM partners with proven experience in resolving underpayments and improving collections.
7. Monitor Payer Trends
Action: Keep track of payer behavior to identify recurring issues.
Benefit: Enables proactive adjustments to prevent future underpayments.
Best Practices for Prevention
Preauthorization Checks: Ensure that all procedures are preauthorized to avoid disputes.
Timely Filing: Submit claims well within payer deadlines to avoid denials.
Insurance Verification: Confirm patient insurance details before services are rendered.
Training Programs: Provide ongoing education for staff on ASC billing guidelines and payer-specific requirements.
Leverage Technology: Use advanced billing software and analytics tools to flag potential underpayments.
Conclusion
Underpayments in ASC billing can have a significant financial impact if left unresolved. By identifying common causes and implementing targeted recovery strategies, ASCs can recover lost revenue and improve overall financial performance. Regular audits, effective contract management, and professional RCM support can make a substantial difference in addressing underpayment challenges.
At Vardhan Medical Coding, we specialize in ASC revenue cycle management and can help your ASC recover lost revenue while optimizing your billing processes. Contact us today to learn more about how we can support your financial success.
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