A Planning Playbook for Opening a New Orthopedic ASC
The ASC market continues its rapid growth. In 2023, roughly 116 new ASCs opened in the U.S., many of which were orthopedic-specific in nature....
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By: Dan O'Connor
Published: 10/10/2007
Born to bill. That's how they describe Kim Orwig, CPC, CPC-H, at the Indian Wells Valley Surgery Center in Ridgecrest, Calif. It is a term of endearment for a certified professional coder who takes great pride in helping her center get paid more and get paid faster for the 2,000 cases it performs each year.
By all accounts, including the bank's, Ms. Orwig is quite good. Ask Ruth May, RN, CASC, the director of surgical services at Indian Wells, about her coder of three years, and the accolades and adjectives come pouring out: Thorough. Detailed. Capable. Talented. Aggressive.
And, according to industry estimates, increasingly rare. The shortage of medical coders has risen to critical levels in some areas - as great as 30 percent nationwide - and sparked a $5 billion outsourcing industry that has taken root in outpatient surgery.
What about you? Who's managing the coding, billing and collections in your facility? If you're fortunate enough to have a certified coder with the pedigree of Ms. Orwig, bow your head and thank your lucky A/R days. But in the absence of a highly qualified and aggressive person, does it make sense to outsource this function to a third-party billing service that will keep 3 percent to 8 percent of what it collects?
We put that question to a panel of owners and operators. If you're like most of those who responded to our online survey, you'd much rather pay your own person $15 to $20 per hour than a billing company $200,000 to $300,000 per year. As you'll see, however, those numbers might not tell the whole story. As Caryl Serbin, RN, BSN, LHRM, the president of Surgery Center Billing, says, "Nobody does it as well as a billing company that does it right."
1 in 10 outsources
You might think that as facility managers juggle so many tasks, they'd have little time to pursue unpaid claims and collections and would gladly turn to outsourcing as a solution. But our survey found that only about 10 percent outsource now and only another 2 percent plan to do so later, both numbers somewhat surprisingly low. (Survey results are based on 99 responses to our Web-based survey, 49 from ASC-based readers, 44 from those in hospitals and six from those in office-based practices.)
"Billing and collections are key functions that determine the viability of any [surgery center]. It's too critical a function to give to others to perform," says William L. MacKnight, the managing partner of Physicians Health Resources in Dallas.
Donna H. Smith, the administrator of The Surgery Center in Oxford, Ala., hasn't been satisfied with the two outside billing companies she's used. "In-house coding and billing allows for more control, and employees take ownership in that task, especially when they see the end results on a weekly or monthly basis," she says. "Plus, I am able to detect problems much earlier than I could when outsourcing."
Even the few facility managers who outsource their billing are less than thrilled about it. Seven out of 10 said they'd prefer to bring billing in-house provided they could find a certified coder. "The only reason that you would want to outsource billing," says Ms. Orwig, "is if you couldn't find a responsible biller."
One director of a joint-ventured ASC pays a third-party biller 4.5 percent of what it collects for her center, which averages to $25,000 to $35,000 per month. Given the choice, from both a cost and control standpoint, she'd prefer to bring billing in-house.
"When they have a bad collections month, they don't have to answer to my board, but I do," she says. "When I want to run a report on our accounts, I have to call the company and have them send me a report, which sometimes takes two days."
The top reasons for not outsourcing were not wanting to relinquish control of this function (58.3 percent), having a great coder (56.9 percent) and cost (23.6 percent). Also contributing to the lukewarm reaction were concerns that some companies might be unscrupulous (19.4 percent) as well as objections from physician-owners (16.7 percent) and management companies (12.5 percent).
Hidden benefits
There's little gray area when it comes to using a third-party billing service. You're either for it or against it. Those who like it, love it, lauding such benefits as:
"Although this fee seems high, you have to consider how much it costs you to bill and if it's right for your facility," says Ms. English. "Is your coding optimized? What are your days in A/R? Each day's delay in receiving your reimbursement makes that payment worth even less given the time-value of money."
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If you do outsource
Some tips if you outsource:
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Turning to the experts
In the end, the decision to use a billing company might come down to answering yes to most, if not all, of these questions. Does your coder submit claims within 24 hours of surgery? Is she aware of your state's prompt-payment laws? Are secondary insurance claims and patient billing current? Is she aware of the OIG billing requirements and HIPAA constraints on patient confidentiality? Are you billing electronically with the code sets required by HIPAA?
"We have a fabulous biller/ coder who takes her job very seriously," says Ms. May. "If that were not the case, and we were not collecting what we should, outsourcing is definitely something we'd consider."
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