Unlocking Financial Success in Orthopedic ASCs: 5 Critical RCM Processes Every Provider Must Master
During a webinar hosted by Becker’s Healthcare and Scott Allen, nimble’s Senior Vice President of Managed Care Contracting, we discussed how ambulatory surgery centers (ASCs) can improve implant billing by reviewing managed care contract terms.
When outpatient surgery centers conduct a case costing analysis, it’s common to discover that implants are among the highest expense items, especially if they are billed incorrectly. Scott recommends ASCs review contracts annually to determine implant reimbursement eligibility.
“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,” said Scott.
We sat down with Scott to determine the top five questions to ask your revenue cycle team to improve the implant reimbursement process. Watch the full webinar here.
How profitable are orthopedic implant cases?
According to a report by Grand View Research, the global orthopedic implants market was valued at USD 50.6 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 5.8% from 2021 to 2028.
The increasing prevalence of orthopedic disorders, rising geriatric population, and growing demand for minimally invasive surgeries are some of the factors driving the growth of the market.
However, it’s important to note that the revenue generated from orthopedic implant cases can vary widely based on the specifics of each case and should be evaluated on a case-by-case basis.
The revenue generated from orthopedic implant cases can vary depending on various factors such as the type of implant used, the complexity of the surgery, the geographical location, and the pricing strategy of the hospital or healthcare facility.
Once you review the contract language, you will notice the payer methodology around implants varies by the payer. The contract language will dictate 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).
The contract will explain 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 improve your options when adapting your implant billing practices.
Do orthopedic implant contracts have implant billing restrictions?
Yes, orthopedic implant 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 separately. Some contracts may require that the cost of the implant be included in the overall cost of the procedure rather than billed separately.
You will want to see 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. These restrictions are put in place to ensure that the costs associated with orthopedic implant cases are managed effectively and that the overall cost of healthcare remains affordable for patients and healthcare providers alike.
Do you have 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. Using the wrong revenue code can result in non-payment or underpayment.
Generally, hospitals and healthcare 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.
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.
Are your orthopedic implant payments accurate?
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 orthopedic 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 find out is to audit your past payments once you’ve reviewed the terms in your managed care contracts. Understanding the process from coding to patient accounts will help ensure you are billing appropriately and accurately.
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 orthopedic implant advancements within the scope of payer and vendor contract terms?
Implant advancements can be 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.
These terms can be negotiated and updated over time to reflect changes in the healthcare landscape, including new advancements in implant technology.
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. It might be challenging for your facility to stay current on all implant guidelines.
Still, high-cost implant cases can impact your cash flow if you are not reviewing the status of each implant upfront.
Ready to optimize your orthopedic implant collections?
Inflation has been impacting the bottom line of the healthcare industry, and outpatient surgery centers are no exception. Reimbursement challenges stemming from increased costs associated with surgical implants have been a rising concern, particularly among orthopedic practices.
Knowing which cases are profitable and which are losing money puts surgical organizations in a stronger position to make strategic decisions. Obtaining and reviewing a complete copy of each payer contract is the first step in improving your facility’s implant billing and collections.
This process will help you discover which implant devices will drive the best reimbursement rates before a procedure and which devices are not covered, which may signal that it is time to renegotiate your contracts to update outdated terms.
With over 1,000 payer contracts negotiated annually, our deep expertise in payer language and implant profitability has successfully strengthened reimbursement levels for our clients.
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.