Maximizing Revenue in Orthopedic ASCs: Proven Strategies for Improving Implant Collections in Outpatient Settings
A significant part of achieving financial stability and success in the outpatient industry involves securing timely reimbursements for the services you provide, including implants. However, getting reimbursed for implants can be a complex process, with many obstacles that delay or prevent collections.
The first step in improving implant collections is knowing which procedures are profitable.
Conducting a case costing analysis prior to booking a surgical procedure is the best way to determine if that case is profitable.
Add up all expenses associated with the procedure – from pre-op to implant costs and overhead costs – and compare the total to the maximum amount a payer will reimburse. This will give you the ability to compare your profit margin per payer on a case-by-case basis.
As an industry-leading revenue cycle management company focused on the surgical market, we find that even when a complete case costing analysis proves a procedure is profitable, there are some factors with implant billing that can delay or prevent the anticipated reimbursement amount.
Recognize barriers preventing and delaying implant reimbursement.
Payer policies and guidelines can differ greatly from one managed care contract to another. Unless you have access to your complete contracts and review the terms thoroughly with your staff, your team might unknowingly miss necessary information during the claim submission process.
They might realize there is an issue once the claim is rejected, but by that point it could be challenging to resolve depending on what additional information is required to appeal it.
Here are the most common trends impacting implant collections and how to overcome them:
- Wrong documentation from supplier
Imagine you’ve just completed a shoulder replacement surgery. The implant is a costly component of the procedure, and your staff received prior authorization from the payer ahead of time. However, when your billing team submits the claim, you receive a denial due to incomplete or incorrect documentation from the supplier.
The implant supplier failed to provide essential information such as the product code, lot number, or other critical details about the implant. Without this information, the payer doesn’t know if the correct implant was used in the surgery, so the claim is denied.
To catch errors or omissions in implant documentation before they become expensive claim denials, establish clear communication channels with your implant suppliers to ensure they provide all of the necessary information ahead of time.
Your administrative team can also conduct regular audits on implant-related documentation to verify all payer requirements are met.
- Actual cost of implant circled in red pen
When a payer requests that the actual cost of an implant be circled in red pen on a claim, it likely means they want to ensure they are being charged the correct amount for the implant.
This manual process adds an extra step to the billing process, which can slow down reimbursement and create delays in payment. Circling the cost in red pen is meant to decrease the likelihood of fraudulent charges, but the practice can cause additional issues for reimbursement.
For example, the cost of an implant varies depending on the vendor or the specific circumstances of the procedure. If that cost exceeds the amount the payer considers to be reasonable and customary, the payer will only provide a partial reimbursement due to previously set managed care contracting terms.
In this case, the ASC may need to provide additional documentation or negotiate with the payer to receive the full reimbursement amount. Relying on benchmarks, such as the Fair Health database, to justify the cost of the implant may help negotiate a higher reimbursement amount with the payer.
However, negotiating with payers can be a time-consuming process. Having a strong understanding of your facility’s managed care contract terms and how they apply to each type of implant is crucial to avoid underpayments.
- Trailer billing
Trailer billing occurs when the payer adjudicates the claim for the primary surgical procedure but then requires the ASC to submit a separate invoice for the cost of the implant that was used during the procedure.
To cut down on trailer billing, where the implant “trails” the initial claim, careful coordination is necessary to ensure the secondary implant claim is associated with the right procedure. This ensures the claim can be processed and approved.
It’s essential to carefully review the terms of your managed care contracts to identify which payers require trailer billing as this policy can significantly impact your overall cash flow, particularly if the implant is the most expensive component of the surgical procedure.
- Medical necessity meets local plan but not home plan
An insured patient with severe knee arthritis requires a knee replacement implant to alleviate pain and improve their mobility. While this is considered a medical necessity, the patient’s insurance plan has a specific exclusion for knee replacement surgery and related implants. In this case, the ASC may need to negotiate with the payer to obtain approval for the procedure and the implant.
This negotiation could involve providing documentation of the patient’s medical necessity, appealing the decision through the payer’s internal review process, or working with the patient to explore other insurance options that may provide coverage for the necessary implant.
For high dollar implant cases, your staff should be well-versed in the insurance verification and pre-authorization process. Educating the patient on cost estimates upfront is also crucial, especially if the patient has to pay for a percentage of the procedure out of pocket.
Providing payment options prior to the procedure also improves the timeliness of patient collections and avoids any confusion when the patient receives your bill for service.
Staying up-to-date on each payer’s policies will increase implant reimbursements.
While receiving full reimbursement for every implant is the goal, the process can be complicated and time-consuming for your staff. Staying up to date with the latest payer policies and guidelines increases the odds of obtaining full reimbursement for implants.
Recognizing the most common reimbursement barriers and building a step-by-step playbook to address them starts with a thorough examination of your managed care contracts.
Are you looking for ways to improve your revenue cycle management? Take the first step towards optimizing your revenue cycle process by requesting a revenue assessment from our team of RCM experts. Request a demo.