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How to Improve Your ASC’s Implant Billing and Collections

During nimble’s Unlocking Implant Reimbursements webinar, Scott Allen, nimble’s Senior Vice President of Managed Care Contracting, explained why reviewing the terms in managed care contracts is the first step in improving the ASC implant billing and collections process.

After the webinar, we sat down with Scott to hear more of his insights on how ASCs can improve their understanding of the implant billing process by thoroughly understanding managed care contract terminology.

ASC Implant Billing and Profit Margins 

(Question) How should ASCs determine profit margins on implants? 

(Scott Allen, answer) The revenue generated from implant cases can vary depending on factors such as the type of implant used, the complexity of the surgery, the geographical location of the surgery center, and the reimbursement terms in managed care contracts.  

Your ASC’s managed care contracts directly dictate what a payer will or will not reimburse depending on the implant and procedure. For example, contract language will dictate if you can bill using an invoice cost plus structure (meaning you can bill for the implant cost, plus a little extra to cover overhead costs).  

Since contracts differ by payer, your implant reimbursement and profit margin will differ by payer. The best place to start in determining your ASC’s profit margin on implants is to review your facility’s managed care contracts. Find out how much of a percentage an insurer will pay and how much of the cost is left up to the patient to cover.  Knowing your costs and reimbursement ahead of time will also help you determine which procedures can be profitable for your facility.  

Markups for Billing Implants 

(Question) Is there a standard mark-up ASCs should consider when billing implants?

(Scott Allen, answer) The markup or profit margin on implants can differ greatly due to the type of implant and the implant supplier or manufacturer.  

Generally, surgical facilities negotiate with implant manufacturers and suppliers to secure the best pricing possible. They may also have contractual agreements with payers that dictate the reimbursement rates for implants, which can affect the amount of markup that is applied.    

It is important to know if an insurance carrier pays for the implant separately or if the value is included in the payout for the surgery.  Additionally, some hospitals and healthcare facilities may use value-based pricing strategies that focus on the outcomes and quality of care, rather than the price of the implant itself.

Applying a standard implant markup for each payer can be challenging due to narrow networks, smaller employer plans, and high deductible plans. The specific markup applied to an implant will most likely vary depending on the individual case. We recommend evaluating this on a case-by-case basis after verifying a patient’s insurance eligibility.   

ASC Implant Billing Restrictions? 

(Question) What kind of implant billing restrictions do ASCs encounter?

(Scott Allen, answer) ASC contracts often have implant billing restrictions. Some common restrictions include: 

1. Limitations on the type of implant. Some contracts may specify the type of implant that can be used for a particular procedure.  

2. Limits on the number of implants used. In some cases, contracts may place a cap on the number of implants that can be used per patient or per procedure. 

3. Specific billing policies for implant billing. Some contracts have unique billing requirements that are specific to implants. For example, some payers may require a different billing address for submitting implant claims. Others may require the cost of the implant be included in the overall cost of the procedure rather than billed separately.

Implants are a substantial upfront cost for ASCs. It’s important to avoid situations that can lead to claim denials, such as if a payer considers a procedure or medical device to be experimental.  ASC surgeons and revenue cycle staff should work together to verify if a particular advancement is within the scope of payer and vendor contract terms. 

For example, innovations such as 3D-printed orthopedic devices might not be covered depending on when your contracts were negotiated. The older your contract terms are, the more likely you are to have issues with receiving payment on the latest implant devices.  

Overall, your managed care contracts serve as your source of truth. If you do not have complete contracts on file, or if the contract language is unclear, reach out to your payer representative for clarification. You should also discuss any outdated terms and when they can be re-negotiated. If you know how existing billing restrictions are impacting your revenue, you can factor that information into the process of renegotiating new contract terms.

ASC Revenue Cycle Management for Implants 

(Question) When billing implants, what are some ways ASCs can improve revenue cycle efficiency and rate of collections?  

(Scott Allen, answer) Improving revenue cycle efficiency and cash flow comes down to accuracy. Having a system in place to check for errors before submitting claims is the first step in improving the revenue cycle and decreasing delays to implant reimbursement and collections.

Another best practice in ASC revenue cycle management, especially for implants, is auditing your past payments. Tracking your clean claim rate, your rate of denials, and the reasons for the denials will provide you with insights on where you can improve.  

Chart management and business intelligence software allows you to easily search and access records for comparison. For example, commercial payers often have timely filing deadlines. How often do you meet those deadlines for implants? To get claims out the door faster, look for any patterns in your billing process that can cause claims to linger in accounts receivable (A/R).  

In terms of tracking revenue, tracking your implant reimbursement by cost and by collections received will help you manage outstanding balances. 

Ready to optimize your ASC’s implant billing and collections? 

Inflation has been impacting the bottom line of the healthcare industry, and outpatient surgery centers are no exception. Increased costs associated with surgical implants have been a rising concern, particularly among orthopedic practices.   

Reviewing your managed care contract terms and applying them to the revenue cycle is the first step in optimizing your ASC’s implant billing and collections.   

Implant revenue is changing. Knowing which cases are profitable and which are losing money puts surgical organizations in a stronger position to make strategic decisions.  

Looking for more ASC implant billing and managed care contracting insights from Scott Allen?  Watch the on-demand webinar Unlocking Reimbursements: Optimize ASC Revenue and Contract Negotiations.