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How ASC’s Can Negotiate for Higher Out-of-Network Reimbursements

In recent times, ambulatory surgery centers (ASC’s) have been confronted with the challenge of effectively negotiating for the highest reimbursement rates on services rendered out-of-network (OON). This was not the case decades ago, specifically in the early 1990s, when providers didn’t have to negotiate on out-of-network services as they were fully reimbursed by payers.

Today, reimbursements for out-of-network services have become very complex. Payers have now developed many tactics to make it difficult for providers to receive their full compensation.

Amongst other tactics adopted, payers now hire vendors to negotiate the lowest reimbursement rates from providers. This has made it possible for providers to be paid very low rates, as low as 20 percent of the compensation due to them, if they fail to actively negotiate for the best rates.

Providers will therefore have to develop strategies to ensure they receive 100 percent of their reimbursements. Here are 2 tips to consider for a successful negotiation:

Be Deliberate and Persistent in Negotiations

When it comes to negotiating for out-of-network reimbursements with payers, providers must be both deliberate and persistent. Vendors hired by payers will do their best to discourage providers from receiving their reimbursements in full.

Vendors receive higher commissions when they successfully negotiate lower reimbursement rates for payers; as such, they would normally develop tactics to out-smart unsuspecting providers when negotiating on behalf of payers. 

Providers must therefore be proactive in the negotiation process. An experienced staff is well-versed in contract negotiation and should see to out-of-network negotiations with vendors. Your center can also recruit experienced out-of-network negotiators to join the company or be contracted to serve as agents for your ASC to negotiate with payers or vendors. 

No matter how long it takes, responding to each counteroffer and following up with appealed underpayments will make a big difference. Be persistent in the negotiation process by making multiple calls, sending emails, and even scheduling meetings to ensure that the highest possible reimbursement rates are received. This strong negotiation process should be employed even if your center has low volume of out-of-network patients.

Appropriate Use of Data

The effective use of data is another strategy that ASC’s need to consider adopting in order to effectively negotiate for higher reimbursement rates. One tactic that payers employ to give the lowest reimbursement rates to providers is offering a different rate for the same procedure previously handled by the provider.

For example, an insurance company that paid 70 percent on a similar case a year ago might want to now offer 40 percent. An ASC can negotiate for the same rate, or maybe even a higher one, if it has data on the previous transaction. 

Payers are often more proactive in collecting and keeping data than providers. Third-party vendors manage their data effectively and use it to negotiate the lowest reimbursements from providers.

Most providers however do not keep track of the data from their previous negotiations; hence the lower reimbursement rates. 

Therefore, if you want to increase your bottom line, learn to be a persistent negotiator and back your strategy with data. When this is done, out-of-network reimbursements can be higher than in-network reimbursements. Your center has the flexibility and opportunity to set higher reimbursement rates that can make up for low rates set by government payers.

 

Top 3 Reasons Why Some ASC’s Fail

In today’s value-based setting, ambulatory surgery centers (ASC’s) are fast emerging as the preferred choice for outpatient surgical procedures. However, research by the Advisory Board shows that since 2009, nearly half of new ASC’s that open also close. 

The reality is that many surgery centers can falter if they fail to pay attention to critical areas of inefficiencies and risk.

Here are 3 common reasons why some ASC’s fail and how they can be avoided: 

1. Failure to Attract Cases with High Reimbursements

The ability of ASC’s to drive high case volume to their facilities has been identified as crucial to their long-term growth. In order to remain competitive in an environment with low reimbursements, ASC’s will need to target more cases with higher profits. 

Relying solely on procedures with low reimbursement rates will not position a center to stay ahead of the competition. ASC’s will need to expand their areas of specialization by adding new procedures with high reimbursements. For instance, procedures such as major spine cases and total joint replacements (TJR) have the potential to generate higher profits.

2. Failure to Prioritize Patient Care

The quality of care delivered to patients must be a major concern for ASC’s. This is becoming more important today considering the shift towards consumerism in healthcare. More than ever before, patient care is taking center stage as being one of the most crucial factors contributing to the success of a surgery center.  

A strong culture of patient care is required in centers to prevent infections, complications and low patient satisfaction ratings. According to Aziz Berjis, DPM, Founder and Director of Glendale Outpatient Surgery Center; the “patient care has to come first.” As long as ASC’s stick with a high level of quality in patient care they will continue to attract more patients.

3. Poorly Managed Contracts

Effectively managing payor contracts is crucial to the growth of a surgery center. However, centers face numerous challenges in successfully managing the contracts they have with payors. 

A common challenge is that ASC administrators are overly burdened with so many tasks that they are unable to dedicate the time and focus needed to effectively manage payor contracts, especially those that are soon expiring.

With careful planning, ASC’s can allocate more time to negotiating payor contracts. This can be done by either forming a team in the organization saddled with the responsibility of payor contract negotiation or by recruiting more hands if the present staff strength is low.

By paying more attention to payor relationships, ASC’s can negotiate contracts that will lead to significant cost reduction. This will in turn enable them to save more money to fund the growth of their centers.

3 Strategies to Improve Financial Relationships with Patients

One of the realities that US healthcare providers must face is the increasing number of privately purchased health plans. High-deductible health plans (HDHPs) have low monthly premiums but require patients to pay a high amount out-of-pocket for care.

With yearly out-of-pocket expenses (including deductibles, copayments, and coinsurance) for HDHPs capped at $6,650 for an individualor twice the amount for a family, most patients in the United States find it difficult to offset their medical expenses from a median household income of about $57,600. A survey by the Federal Reserve Board also showed that almost 50 percent of their respondents report finding it difficult to make an unexpected medical expense as little as $400.

This means that the greater financial risk (of default in payments by patients) has been shifted to providers. This situation calls for better financial relationships with patients who now have a significant responsibility.

Here are 3 tips to consider to build a better financial relationship with your patients:

1. Start Financial Conversation Early

Traditionally, providers delay the financial conversation until after care has been given to patients; although the clinical conversation is often initiated earlier on in the process. With the shift towards patient self-pay arrangements, providers need to start discussing patient financial obligations early in the process.

Providers need to open flexible and clear channels of financial communication with patients well before the care has been provided. Conversation on financial responsibilities should also be handled with finesse to prevent a negative response from patients. Payment options available to patients should be clearly stated without any hidden terms and conditions. In a value-based system, this will go a long way in building trust with patients.

2. Understand the Patient’s Ability to Pay

A major challenge with self-pay is that not all patients are alike with regards to their understanding and response to their financial obligations. While some patients understand the provider’s billing process well, others simply do not. In fact, for some, the process is seen as complex and confusing, which makes self-pay a rather tedious exercise.

Being able to understand patients well will help providers determine who needs more help regarding their ability to pay. In-house research can be conducted to segment patients according to their propensity to pay and to personalize the collection approach. Such research should be designed to elicit response from patients in the most transparent manner.

3. Introduce Patient Financing Option 

Identifying those who are most likely to default on payments is not enough. Providers need to introduce flexible payment and financing options to them in a friendly way. With the shift towards consumerism in healthcare, patients expect a “consumer experience” from providers.

Communication with patients about their financial obligations will therefore have to done with personalization in mind. Each patient should be able to access an automated online platform that offers customized information on their financial obligations and the flexible payments plans they can choose from. Providers that offer an outstanding consumer experience to patients will reap the rewards in their bottom line.  

At MnetHealth, we can help build a better financial relationship with your patients. We are experienced at optimizing self-pay collections by offering innovative financial solutions that simplify the payment process for both patients and providers. By leveraging our online platform, patients can access state of the art payment engagement solutions that will greatly benefit your practice.

 

3 Tips That Can Help ASC’s Capitalize on Today’s Outpatient Growth

3 Tips That Can Help ASC-Mnet Health

The transition towards value-based care in the U.S. health system has accompanied the rise of Ambulatory Surgery Centers (ASC’s) which are quickly becoming the norm for outpatient surgery today. There are currently 5,500 ASC’s in the U.S. and this number is estimated to increase to between 8,000 and 10,000 over the course of the next decade.

With surgery increasingly shifting towards the outpatient model, hospitals and health systems are also expanding into the ambulatory surgery space by either partnering with ASC’s or establishing their own to increase surgical reimbursements. According to Regent Surgical Health, the volume of surgeries conducted in inpatient facilities between 2006 and 2013 fell by 17 percent, while those performed in outpatient facilities, including ASC’s, increased by 33 percent.

ASC’s can capitalize on this transition and see a significant increase in their revenue. Here’s 3 tips for ASC’s in an ever-changing outpatient surgery landscape:

1. Open New Doors of Partnership with Independent Surgeons

With an increase in demand for outpatient surgery, patients are looking for quality services at the lowest possible cost. ASC’s should consider entering into partnerships with surgeons to increase case volumes by being able to continually provide quality services at low cost. According to Marilyn Denegre-Rumbin, Cardinal Health's Director of Payer and Reimbursement Strategy, this partnership can take different forms. An ASC facility can partner with independent surgeons or those that work with both hospitals and ASC’s. Another form of partnership would be to offer ownership claims to those interested in partnering or looking to start their centers.

2. Target Private Payers

Private payers are known to prefer ASC’s over hospitals because of the lower reimbursement rates that go to ASC’s for similar surgical procedures performed in hospital settings. An ASC owner can take advantage of this by leveraging payer data to search for employers. The success of this strategy would however be hinged on whether it generates increased case volume to the center or not. And improving the quality of services offered to payers and patients is crucial to attracting greater case volume and revenue to a center.

3. Take advantage of the shift towards healthcare consumerism

Consumerism is fast gaining traction in the healthcare space as patients are taking advantage of the transition to value-based care. This is because of being able to freely choose between surgery centers that offer the highest quality at lowest possible cost. ASC’s must therefore understand how to attract greater case volume to their centers in a landscape centered on consumer purchasing preferences.

ASC’s also need to be aware that to succeed in this new landscape, they need to supply patients with information and decision support tools, financial incentives, rewards and other benefits that encourage personal involvement.

With patients finding it increasingly difficult to offset their out-of-pocket medical expenses, offering low cost payment options can be adopted by ASC’s as an incentive to drive case volume to their centers. For instance, a facility can offer a payment plan for patients unable to meet their emergency surgery expenses that allows them to make smaller installment payments spread out over a few months.

What Mnet Health Offers

At Mnet Health, we work to provide flexible payment options for patients and providers, especially for Ambulatory Surgery Centers (ASC’s) that rely on repeat business and referrals. Mnet Health’s flagship product, MedDraft offers a payment option that enables providers and patients to easily resolve patient medical bills through a short-term, zero-interest payment schedule. By leveraging the MedDraft online platform, patients gain access to an interest-free payment plan which can ultimately help drive greater case volume to an ASC facility.

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