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Grow Your Bottom Line Without Doing One More Case
Are you leaving money on the table? Here are 10 ways to collect what's rightfully yours — and get paid in full.
Stephanie Ellis
Publish Date: October 10, 2007

What if I said your facility could grow its net without doing one more case? You'd probably think that sounded too good to be true. Well, think again. We're going to explore a few surefire coding, billing and collections strategies that can immediately and directly swell your facility's bottom line with revenue that's rightfully yours but has fallen through the cracks of your facility. You just need to know where to look.

Insurance verification
Ever have a claim denied because you didn't verify the patient's insurance before the surgery date? This is completely avoidable. Benefits information usually comes from the scheduling physician's office, but don't assume it was verified before being forwarded to your staff. It's essential that your staff verify, without fail, the benefits for each patient seeking treatment at your facility. Failure to do so will result in an unnecessary number of claims being denied in full. Let's further examine insurance verification.

  • The basics. Ensure patients do in fact have the coverage reflected on their insurance cards, and double-check the effective dates of the coverage. I can't tell you how many claims I've seen denied because a policy expired or had yet to be activated. Also remember to get accurate co-payment and deductible information to guarantee you collect the proper owing amounts from patients.
  • Out-of-network concerns. Be sure to obtain out-of-network benefits information for non-participating plans when your facility doesn't have a contract with the payer. There may not be benefits available for out-of-network providers if a patient's plan is an HMO, resulting in your claim's being denied in full.
  • Injury cases. Patients' regular medical insurance carriers usually won't be involved with payments in workers' compensation cases. Your staff must call the correct workers' comp carrier for proper verification of benefits. These cases usually require strict up-front approvals by the payer's claims adjuster, and may involve a nurse case manager to oversee the case for the workers' comp carrier. Be diligent in obtaining full details of a payer's requirements for these cases to assure proper reimbursement.
  • Attention, hospital administrators. Insurance verification is important for freestanding facilities, but it's an absolute necessity for hospital-based surgery centers. Staff in these settings are more likely to receive outdated insurance data because the information is obtained from the hospital's main record system. Patients could have had past inpatient procedures or other services performed at the hospital under a different insurer, resulting in your staff's having access to an outdated insurance record.

Just as you must verify insurance benefits, your staff needs to inquire about pre-certifications or authorizations on a case-by-case basis. Trying to gain authorization - and therefore reimbursement - for procedures after surgery is next to impossible.

As soon as a case is scheduled, have a policy in place that requires your staff to obtain authorizations for all procedures being performed - and not just the first procedure listed on the scheduling form. This is an important clarification. Don't assume all procedures scheduled won't need authorization if the first procedure listed doesn't; your staff should make a habit of checking with the payer on each scheduled procedure. If they don't, all or part of your claim may be denied because of this avoidable omission.

Case authorization
An essential step of the pre-certification process is proper documentation of a case's authorization. Your staff needs to get a pre-certification number from the payer and include the number in the proper area of the claim form, as the claim will likely be denied if the pre-certification number is missing. To protect your facility on the back end of a claim, record the name of the person you obtained the authorization from (try to get a last name, or at least an initial for the last name), the exact telephone number and extension of that person, the date the authorization was performed and the member of your staff who obtained the authorization.

If the person issuing the authorization for the payer informs your staff that she'll be providing written confirmation, ask that the letter be issued immediately and faxed to your center. Also have a follow-up procedure in place to keep up with any delays in receiving the pre-certification number or documentation. An otherwise valid claim should never be denied because a member of your staff neglected to confirm a case's authorization.

Securing approval for a case doesn't signal the end of your staff's responsibilities. You may need to inform a payer's pre-certification department of changes involving procedures that were scheduled but not performed, or after cases in which unexpected procedures (not authorized on the front end) were performed. Most payers have a 24-hour window after surgery to be notified of these variances, so be meticulous in quickly reporting changes to authorized procedures.

An important point to remember: Obtaining a pre-certification doesn't substitute for performing the insurance verification procedures. A payer's pre-certification staff is usually completely separate from its benefits department; the company performing the authorization could also be a totally separate entity from the payer. For the most part, pre-certification staffs don't have access to the validity or even existence of patients' benefits.

8 Most Common Reasons for Medicare-Claim Rejections

  • The patient's ID/Subscriber number is incorrect, missing or placed in the wrong field on the claim form.
  • The provider's signature is missing or isn't in the appropriate field on the claim form (field 31 on the CMS-1500 form or field 85 on the UB-92 form).
  • The correct dates of service are missing or incorrect on the claim.
  • The diagnosis doesn't correspond with or support the services billed, or lacks specificity.
  • Procedure codes used on claims are missing or incorrect, or unlisted codes were used without justification given.
  • The field for the facility's fee on the claim form was left blank.
  • The referring/ordering physician's name and/or UPIN number are missing from the claim form.
  • Claims are not filed in a timely manner (within 12 months of the date of service for most Medicare carriers, but may be less for Medicare HMOs).

- Stephanie Ellis, RN, CPC

Patient financial responsibility
To collect the full amount you're owed, it's essential that you discuss benefits information with patients and clearly inform them of the amount they're expected to pay. State, in writing, that the amount owed is due before surgery; collect the co-pay and deductible amounts during patients' pre-op visits or on the date of their procedure. Try to avoid - and I can't emphasize this enough - billing fees to patients after surgery. The likelihood that you'll collect all of the money owed to you lessens with each day that passes after patient discharge.

If a patient is unable to pay the full owing amount before surgery, set up a reasonable payment plan that's outlined on a signed promissory note. To increase the chances of receiving full payment of a debt, request half of the amount owed up front and try not to extend allowable payments beyond three months from the time of service.

Patients need to also understand that the money you're collecting is for your facility only; they'll receive separate bills from other providers - such as bills from the surgeon, lab or anesthesiologist. Advise them of this.

For cases involving a claim with an out-of-network payer, there's a possibility the check will be sent to the insured instead of to your facility. Be very clear with patients in these cases that they must immediately endorse the check over to your facility upon its receipt, or write your facility a check for the full reimbursement amount. Also have patients sign an agreement guaranteeing a quick transfer; the longer the money sits in the hands of a patient, the bigger the chance it'll end up as a down payment for a home theater system instead of as compensation for your services.

How to Calculate Days in A/R

  • Here's a quick way to calculate, on average, how many days your billed charges sit in accounts receivable (A/R) before collection, courtesy of Judie English, the vice president of business operations for Surgery Center Billing.
  • add your last three months or six months of billed charges to obtain a rolling average;
  • divide that average by the number of calendar or business days in that time period to achieve your average daily charge;
  • divide your current A/R balance by that average daily charge; and
  • use the resulting days in A/R figure to set a goal for future collections.


Billed gross charges ' June 2004


Billed gross charges ' July 2004


Billed gross charges ' August 2004


Total billed charges


Calendar days ' three months

92 days

Average daily charge (total billed charges/calendar days)


Current A/R


Days in A/R (current A/R/average daily charge)

67.2 days

Days in A/R goal

< 50 days

Capturing charges
The proper coding of procedures affects correct reimbursement for your center more than anything else in the collection process. Before billing a case, be sure you have all pertinent charge information and the proper documentation of the case (op report in hand).

Many payers let you bill for only some implants - known as carveouts - and in these cases, the proper use of billing codes can mean the difference between denied claims and full reimbursement. For instance, some payers don't include IOLs in their payments for the 66984 cataract code. When dealing with those payers (for non-Medicare patients), bill the IOL as a separate line item using HCPCS code V2630 for anterior chamber IOLs and V2632 for posterior chamber IOLs. If you use a high-tech IOL instead of a regular IOL, use the appropriate Q-code (which is usually reimbursed by Medicare).

Also realize that 85 percent of claims disallowed for medical necessity are denied because the payer doesn't agree with the diagnosis code you used on the claim. Medicare, for instance, provides a list of diagnosis codes allowed for billing some procedures (LMRPs or LCDs). An important point: Under no circumstances should you fraudulently bill a payer by using a code for a procedure that wasn't performed during a case.

To further ensure your facility captures all the fees it's owed, always bill from your facility's operative report and not from the schedule. Your staff should always read the op report thoroughly; it's imperative to code the procedures documented in the body of the op report. The summary at the beginning of the op report may only list some of the procedures performed.

Coding from the schedule without cross-referencing the op report is a dangerous practice. You risk not only running into compliance issues by billing for procedures that weren't actually performed, but you also risk a great deal of lost reimbursement by not billing for all of the procedures that were performed but weren't on the schedule.

Watch the clock
Take time to review your center's insurance contracts to familiarize yourself with time limits for the filing of claims. Some payers require claims to be filed within one year of the date of service; others are more restrictive and have a window as short as 30 days.

Have policies in place that ensure all cases and procedures performed at your facility will be captured and filed. I recommend cross-referencing the op reports with the facility's schedule at the end of each day. This simple practice is an effective way to guarantee cases won't slip through cracks in your center's paper trail.

A slow-to-pay payer
Staying current with payers on the status of unpaid claims is a key factor in receiving expected revenue in a timely fashion. Balances owed from payers are usually presented on an aging report generated by your facility's billing system. Work off this list from highest balance to lowest balance - not alphabetically. If you have more than one person performing insurance follow-up procedures, divide the caseload by the payers. Giving employees the opportunity to learn the habits and requirements of payers will speed the collection process.

Your staff should ask the following questions during insurance follow-up:

  • Did the payer receive the claim? If the payer received the claim, record the date of its receipt. If it didn't, fax the claim to the payer immediately.
  • Is the claim paid or denied? If the claim has been paid, record the check amount and the date the check was issued, as well as the date when the check is due to be sent.
  • To whom was the check issued? Essential information if your facility is not a participating provider with the payer.
  • If a claim was denied, what was the denial reason? Once you find out the reason for the denial, ask about the payer's appeal procedures.

Check your insurance contracts and know the laws in your state to determine the length of time a payer has for processing a claim (typically 30 days to 45 days from the date the claim was received). If you feel you're getting the runaround from a payer, get the patient involved. It is the patient who has the contract with the insurer, and you'd be surprised how willing patients are to help when their carrier is failing to satisfy a debt that is attached to their names.

If a payer continually misses claim-processing deadlines, don't hesitate to contact the carrier's provider-relations department; you can also write a letter of formal complaint to your state's insurance commissioner, which works wonders in getting fast results.

A slow-to- pay patient
Send out statements on a regular basis to patients carrying outstanding balances or those with payment plans. For patients with poor payment habits, add progressively strong language to the bottom of statements or include an assertive letter in the bill's envelope.

One thing more: If a patient sends small payments that aren't keeping with payment plan guidelines, return the check with a letter reiterating payment stipulations and request that he immediately return a check for the correct amount. Trying to hunt down outstanding payments is never easy or enjoyable, but be persistent. Tenacity pays great dividends in this process - both literally and figuratively.

Collection agencies
If statements from your facility fail to elicit a payment in full, hand over outstanding patient accounts to a reputable collection agency. Turn to an agency when the outstanding bill is 90 days in arrears - and no more than 120 days old. The sooner the collection agency receives the account, the fresher the information will be and the greater your chances of receiving all the money you're owed. Don't back down from delinquent patients, and be prepared for some cases to end up in court. For this reason, you should have an established policy with regards to how far you'll let collection efforts progress. Once the policy is set, put it in writing and be consistent with its stipulations.

A word of caution: If you ever receive a check from a patient that's not for the full amount owed, and the patient wrote "final payment" or "payment in full" in the comment section of the check, don't cash it. According to the laws in many states, a vendor (in this case your facility) cashing a check containing such a statement is considered to be accepting the lesser amount as payment in full. This mistake will void any further collection actions against the patient and will leave your facility receiving only a fraction of the amount it's owed.

Denied claims
Yes, denied claims are an unwelcome aspect of the collection cycle. Here's what to do: Engage in a vigorous appeals process when claims are denied. And be tenacious. Insurance companies are banking on stringing you along in an effort to make you give up on a claim appeal because of the hassle involved.

All payers have unique appeal procedures; refer to your facility's payer contract for an outline of the guidelines. Once you understand the guidelines, follow them to the letter. Many appeals fail because you didn't abide by directives or adhere to deadlines.

Include supplementary information each time you appeal a denied claim. Relying on the same documentation that got your claim rejected in the first place isn't a good strategy. Include H&Ps, physician notes, or op and pathology reports to bolster your chances of winning additional appeals on a case. It also sometimes helps if the operating physician writes a strong appeal letter on the case.

It's also well worth your time to perform regular reviews of payers' explanations of benefits (EOBs) to determine reasons for claim denials. Look for trends - they'll give you a wealth of ideas about how to improve operational issues within your facility to bring money in more efficiently.

Work smarter, not harder
So, there you have it - 10 ways to grow your net without adding one more case to your schedule. These are things you can begin doing as soon as you put this magazine down, although you might want to share this article with your business office staff.

Inside an Amazing Back-Office Turnaround

Stacks and stacks of charts. Piled two-feet high and five rows deep. That's the first thing I saw in the business office at Golden Ridge Surgery Center in Golden, Colo., in July 2001.

"What are those?" I asked.

"Those are the charts we still need to code and bill," came the reply.

I called my wife and told her I'd be pulling a couple all-nighters until we got caught up. I didn't want the year-old center slipping from critical condition to life support.

I was a consultant hired to perform an operations audit of the center's coding and billing, A/R management and payment posting. As you might expect, it wasn't pretty. Cash flow was more like a trickle, and it was taking four weeks to six weeks to get bills out the door. Days in A/R were close to 100. And there wasn't a certified coder on the staff.

Volume wasn't the problem at the ortho (four ORs) and pain facility (two procedure rooms) it was hosting about 450 cases per month. The problem was twofold: The center wasn't submitting claims in a timely manner and it was leaving money on the table. Lots of it. There was one other rather large problem. Several vendors had put the center on hold.

In three months, we turned things around. By the end of 2001, our cash collections were between $900,000 and $1 million per month, most of which was old accounts receivable. We re-engineered the business office operations, hiring and training the right people. Vendors took us off hold. Here are the functions we overhauled that keyed the turnaround:

  • Coding. Coding was our No. 1 problem. Not only was it taking at least a month to get bills out, but the coder wasn't reading the op notes, something I discovered when I found discrepancies between the implant log and what we were billing. We also weren't capturing all the billable procedures that were in op notes (the multiple procedures of a podiatry case, for example). We outsourced our coding to right our ship. We've since hired a certified coder and now code in-house.
  • Collections. A/R days were close to 100, cash wasn't coming in the door and vendor bills were piling up. We now follow up on claims that are 45 days past due and work to resolve unpaid claims.
  • Transcription. We cancelled our transcription service in favor of documentation software that lets our surgeons sit down at a workstation immediately after a case and create highly detailed notes in minutes instead of days. We chose ProVation Medical software. My transcription costs averaged $8,000 per month. I now pay $4,200 per month on a loan for software and hardware. We're generating op notes immediately and we're getting bills out less than 48 hours from the date of service instead of four weeks to six weeks.

The software lets our physicians create comprehensive notes simply by clicking through its medically rich and logical interface that emulates each surgeon's thought process and workflow. The software also takes the guesswork out of coding compliance by adding the proper coding. It prepares enough electronic or hard copies for everyone concerned, as well as the appropriate documentation from cover letters to patient instructions. The software captures images from C-arms and video towers and drops them into the op note.

The most amazing part of connecting point of care with reimbursement: For payers that pay claims electronically, we've at times seen payment in the same month in which we performed the case.

  • Staffing. Running a surgical facility is unlike anything else in business or medicine. Our business office manager is the only one of the six business office staff who remains from the day I came on board.

Whether it's coding, billing or collecting, we now do everything quickly. And correctly. It can be no other way, because the money you leave on the table is often times left there forever. - Phillip Perez, CASC

Mr. Perez ([email protected]) is the administrator of the Golden Ridge Surgery Center in Golden Ridge, Colo.