How to Improve Your ASC’s Implant Billing and Collections
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The billing process for implants isn’t always straightforward. Considering the cost and the expense associated with implant devices, it’s important to address any claim issues before they result in delays to collections or revenue loss.
In preparation for nimble’s upcoming webinar Address Your ASC Claim Denials: Preventative Measures That Work, we sat down with Scott Allen, nimble’s Senior Vice President of Managed Care Contracting, to discuss the role of managed care contracts in preventing implant claim denials.
In this blog post, Scott answers the top five questions to ask your revenue cycle team to improve the implant reimbursement process and your rate of collections.
How do you determine the profit margin on implants?
The revenue generated from implant cases can vary depending on various factors such as the type of implant used, the complexity of the surgery, the geographical location of the surgery center, and the pricing strategy of the hospital or healthcare facility.
The best place to start in determining your profit margin is to review your facility’s managed care contracts. Payment methodology varies depending on the payer and the implant and the payer. The contract language dictates how to markup implants and 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).
Each contract explains how much of a percentage an insurer will pay and how much of the cost is left up to the patient to cover.
This process will help you determine each patient’s payment responsibility based on the payer and what each payer will reimburse. Ultimately, by estimating the costs and the reimbursement ahead of time, you can determine which procedures are profitable for your facility.
Do existing contracts have implant billing restrictions?
Yes, contracts often have implant billing restrictions. These restrictions are put in place to ensure that the costs associated with orthopedic implant cases are controlled and managed effectively. Some of the common billing restrictions may include:
- Limitations on the type of implant that can be used. Some contracts may specify the type of implant that can be used for a particular procedure.
- 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.
- Restrictions on the billing of implants. Some contracts may require that the cost of the implant be included in the overall cost of the procedure rather than billed separately.
Be sure to verify if there are any restrictions on the type of implant you can bill and if there are any unique billing requirements (such as a different billing address for submitting implant claims).
Also, be aware of any restrictions or rules regarding what a payer considers an experimental procedure.
Is there a standard mark-up when billing implants?
The markup or profit margin on implants can vary depending on several factors such as the type of implant used, the supplier or manufacturer, the volume of purchases, and the pricing strategy of the hospital or healthcare facility.
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 because using the wrong revenue code can result in non-payment or underpayment.
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.
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. It’s important to note that the specific markup applied to an implant will vary depending on the individual case and should be evaluated on a case-by-case basis.
How accurate is your billing process for implants?
Accuracy in payment processing is an essential aspect of healthcare finance, and healthcare providers are responsible for ensuring that their payment processes are accurate and compliant with industry regulations.
This includes verifying the accuracy of invoices and bills for implants, checking for errors or discrepancies, and addressing any issues that may arise. Healthcare providers may also have internal audits and reviews in place to monitor their payment processes and ensure that they are accurate and compliant.
One way to determine the accuracy of your implant claims is to audit your past payments. Track your clean claim rate and your rate of denials. Are you able to meet timely filing deadlines? Are there any patterns to claim issues that you can address to improve your days in accounts receivable (A/R)?
Maintaining an up-to-date and easily searchable invoice file system will help you efficiently access records for comparison. Tracking your implant reimbursement by cost and collections received will also help you manage your outstanding balances.
Are implants within the scope of payer and vendor contract terms?
Payer and vendor contracts typically include terms and provisions that outline the payment rates and reimbursement policies for medical devices and implants, including any advancements or new technologies that may become available.
Look closely at your implant vendor and managed care contracts to see how they handle innovative technology. Unfortunately, there can be unforeseen technicalities with some of the latest technological advances in implants, such as 3D-printed orthopedic devices.
The older your contract terms are, the more likely payers or vendors will not cover the latest devices. If there are devices your facility currently uses or plans on incorporating and those devices are not described within your contract terms, your claim can be denied.
Get clarification from your payer representative if your contract’s language is unclear. These terms can be negotiated and updated over time to reflect changes in the healthcare landscape, including new advancements in implant technology.
Ready to optimize your implant 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.
Implant revenue is changing, but by reviewing your managed care contract terms, your facility will be able to determine if you’re overbilling or underbilling and what kind of revenue can be generated.
Knowing which cases are profitable and which are losing money puts surgical organizations in a stronger position to make strategic decisions.
Join Scott Allen on Thursday, November 9th at 1pm Central for nimble’s webinar Address Your ASC Claim Denials: Preventative Measures That Work.