Here are five ways orthopedic surgery centers can optimize profitability.
1. Run your office with professional staff. Knowing what kind of personnel you will need and how each person contributes to the success of the office is crucial for building a thriving practice. "There are some physicians who end up having their wives or nurses running the office without proper qualification," says Pedro Vergne-Marini, MD, managing member of Physicians Capital Investments. "In this environment you need qualified and trained personnel knowledgeable and fully trained in complex billing issues, regulations, HIPAA, etc. If they bill incorrectly, the commitment of 'fraud' could be assumed and you as the 'Captain of the Ship' can be held responsible." A compensation package offered to employees should include health insurance and workers' compensation. It's important to offer a competitive package to attract the best personnel to your facility.
2. Be smart about managed care payments. Though many states have their own laws pertaining to timely payment, your contract should define a payment as 15 days upon receipt of a clean claim that has no defect, impropriety or special circumstance and meets Medicare's guidelines for claim submission, says Ken Bulow, COO of GENASCIS. Additionally, avoid signing a contract that allows for unlimited overpayment recovery. Make sure there is a specific time frame in the contract — the shorter, the better. "It's only fair," says Mr. Bulow. "The payor puts a time limit on how long you have to file an appeal, so you should put a limit on the recoupment window."
3. Treat each case as though it were a workers' compensation case. Workers' compensation and motor vehicle accident cases typically require the largest amount of documentation and information, according to Bill Gilbert, vice president of marketing at AdvantEdge Healthcare Solutions. "These cases are more complicated, and, typically, a case manager is assigned by the employer or auto insurance company. Some claims are even filed on paper. They are different than commercial payors and usually subject to more scrutiny," he says. This scrutiny can be attributed to the complex nature of workers' compensation and MVA cases that occur outside of the ASC. Mr. Voithofer says, "Insurance companies for these cases are set up for the highest level of scrutiny because they don't want to pay for more than they have to. These claims require timely, accurate, well-monitored processes, and the claims won't be paid until every last item is checked and is correct."
For example, in knee surgery performed on a workers' compensation patient, payment won't be authorized if claims don't include the exact number of tendons or compartments operated on, according to Brice Voithofer, vice president of ASC and anesthesia services for AHS. Although many orthopedics or pain management cases are workers' compensation or MVA cases, a surgery center may not immediately know up-front if this is the case, and, as a result, they will have to backtrack and retrieve the required information and lose time. For this reason, Mr. Voithofer suggests that ASCs treat every patient that presents to the surgery center as a workers' compensation or MVA case. "It should be a consistent process," Mr. Voithofer says. "If an ASC can get it perfect with workers' compensation, easier cases will see significant reductions in A/R."
4. Manage the schedule aggressively. Make sure to receive regular and timely updates on when your surgeons will not be using their block times. When future block time becomes available, contact other surgeons' schedulers at least a month in advance to provide adequate time to arrange the appointment. "Unused OR time is like two-week old cheese rotting on the supermarket shelf," says Rajiv Chopra of The C/N Group. "You have to find alternative surgeons to absorb unused time."
Forging strong relationships with schedulers in your surgeons' practices is one of the most effective marketing tools because the surgeon's scheduler often determines where the surgery will take place. "We often discuss the concept of one more case per physician, per month," says Tom Faith of The C/N Group. "Strong relationships with a surgeon's office staff can help drive that." Invite practice schedulers to your ASC, meet with them regularly and make sure they meet your ASC's scheduler. "It makes a big difference if you can put a name with a face and build a personal relationship," Mr. Faith says.
5. Outline the physician owners' goals before looking for corporate partners. "Depending on how their center is doing, their goals will be different," says Jon Vick, president of ASCs Inc. "They need to decide, for instance, what they want to do with their center — whether they want to continue to make it grow, or sell as much as they can, or partner with a hospital or an ASC management company."
He says outlining these goals will involve deciding how much of the center they are willing to sell. "Centers that are doing very well probably don't feel they need a management partner, but they might need a strategic partner in order to maintain or improve their position in the marketplace," he says. "They may want to take some money off the table, especially for older doctors who want to retire." For a center that's doing "okay," he says the physician-owners might want a management partner that will help the center grow and improve performance. In that case, he says, the center may want to sell a minority interest.
A center that is performing poorly might also be interested in selling a minority interest now, with the option to sell more when the center is doing better. He says this applies to both centers that are doing "okay" and centers that are performing poorly. "The center could be worth more, but it needs somebody to help manage it and make it more valuable," he says. "For both groups, the minority interest makes more sense than the majority. It's more business-oriented than it is about taking money off the table."
Related Articles on Orthopedic ASCs:
6 Ways to Increase Profitability at Your Orthopedics-Driven ASC
9 Reimbursement and Business Concepts for Orthopedics in ASCs
Dr. Michael Redler: 3 Trends for Orthopedics in ASCs
1. Run your office with professional staff. Knowing what kind of personnel you will need and how each person contributes to the success of the office is crucial for building a thriving practice. "There are some physicians who end up having their wives or nurses running the office without proper qualification," says Pedro Vergne-Marini, MD, managing member of Physicians Capital Investments. "In this environment you need qualified and trained personnel knowledgeable and fully trained in complex billing issues, regulations, HIPAA, etc. If they bill incorrectly, the commitment of 'fraud' could be assumed and you as the 'Captain of the Ship' can be held responsible." A compensation package offered to employees should include health insurance and workers' compensation. It's important to offer a competitive package to attract the best personnel to your facility.
2. Be smart about managed care payments. Though many states have their own laws pertaining to timely payment, your contract should define a payment as 15 days upon receipt of a clean claim that has no defect, impropriety or special circumstance and meets Medicare's guidelines for claim submission, says Ken Bulow, COO of GENASCIS. Additionally, avoid signing a contract that allows for unlimited overpayment recovery. Make sure there is a specific time frame in the contract — the shorter, the better. "It's only fair," says Mr. Bulow. "The payor puts a time limit on how long you have to file an appeal, so you should put a limit on the recoupment window."
3. Treat each case as though it were a workers' compensation case. Workers' compensation and motor vehicle accident cases typically require the largest amount of documentation and information, according to Bill Gilbert, vice president of marketing at AdvantEdge Healthcare Solutions. "These cases are more complicated, and, typically, a case manager is assigned by the employer or auto insurance company. Some claims are even filed on paper. They are different than commercial payors and usually subject to more scrutiny," he says. This scrutiny can be attributed to the complex nature of workers' compensation and MVA cases that occur outside of the ASC. Mr. Voithofer says, "Insurance companies for these cases are set up for the highest level of scrutiny because they don't want to pay for more than they have to. These claims require timely, accurate, well-monitored processes, and the claims won't be paid until every last item is checked and is correct."
For example, in knee surgery performed on a workers' compensation patient, payment won't be authorized if claims don't include the exact number of tendons or compartments operated on, according to Brice Voithofer, vice president of ASC and anesthesia services for AHS. Although many orthopedics or pain management cases are workers' compensation or MVA cases, a surgery center may not immediately know up-front if this is the case, and, as a result, they will have to backtrack and retrieve the required information and lose time. For this reason, Mr. Voithofer suggests that ASCs treat every patient that presents to the surgery center as a workers' compensation or MVA case. "It should be a consistent process," Mr. Voithofer says. "If an ASC can get it perfect with workers' compensation, easier cases will see significant reductions in A/R."
4. Manage the schedule aggressively. Make sure to receive regular and timely updates on when your surgeons will not be using their block times. When future block time becomes available, contact other surgeons' schedulers at least a month in advance to provide adequate time to arrange the appointment. "Unused OR time is like two-week old cheese rotting on the supermarket shelf," says Rajiv Chopra of The C/N Group. "You have to find alternative surgeons to absorb unused time."
Forging strong relationships with schedulers in your surgeons' practices is one of the most effective marketing tools because the surgeon's scheduler often determines where the surgery will take place. "We often discuss the concept of one more case per physician, per month," says Tom Faith of The C/N Group. "Strong relationships with a surgeon's office staff can help drive that." Invite practice schedulers to your ASC, meet with them regularly and make sure they meet your ASC's scheduler. "It makes a big difference if you can put a name with a face and build a personal relationship," Mr. Faith says.
5. Outline the physician owners' goals before looking for corporate partners. "Depending on how their center is doing, their goals will be different," says Jon Vick, president of ASCs Inc. "They need to decide, for instance, what they want to do with their center — whether they want to continue to make it grow, or sell as much as they can, or partner with a hospital or an ASC management company."
He says outlining these goals will involve deciding how much of the center they are willing to sell. "Centers that are doing very well probably don't feel they need a management partner, but they might need a strategic partner in order to maintain or improve their position in the marketplace," he says. "They may want to take some money off the table, especially for older doctors who want to retire." For a center that's doing "okay," he says the physician-owners might want a management partner that will help the center grow and improve performance. In that case, he says, the center may want to sell a minority interest.
A center that is performing poorly might also be interested in selling a minority interest now, with the option to sell more when the center is doing better. He says this applies to both centers that are doing "okay" and centers that are performing poorly. "The center could be worth more, but it needs somebody to help manage it and make it more valuable," he says. "For both groups, the minority interest makes more sense than the majority. It's more business-oriented than it is about taking money off the table."
Related Articles on Orthopedic ASCs:
6 Ways to Increase Profitability at Your Orthopedics-Driven ASC
9 Reimbursement and Business Concepts for Orthopedics in ASCs
Dr. Michael Redler: 3 Trends for Orthopedics in ASCs