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Going back to fundamentals will help you be prepared
In general, surgery centers will need to get back to basics in terms of cost accounting, budgeting, and contract management, in order to prepare for the new Medicare payment system, says Craig Jeffries, Esq., executive director of the American Association of Ambulatory Surgery Centers (AAASC).
"Those basic business issues are an important upgrade that many ASCs will need to focus on," Jeffries says. "Many surgery centers, especially single specialty, have not focused as much on fundamental business principles as they'll need to due to changes coming down."
Consider these suggestions:
• Determine new opportunities.
Get aggressive about your marketing plan, suggests Caryl A. Serbin, RN, BSN, LHRM, president of Surgery Consultants of America. Look at what specialties are doing well under the proposed plan, such as retinas and orthopedics, she says. "We're encouraging administrators to look at what procedure codes are paying and what the new opportunities are in markets," Serbin says. "They may have never wanted to approach retina surgeons, but now is that opportunity."
Single specialty centers that offer procedures that won't fare as well under the new payment plan, such as pain management, should consider joining forces with a specialty that will be better reimbursed, such as ortho, she advises.
• Start negotiating your managed care contracts early.
Look at your existing contracts and/or those tied to Medicare and begin the process of renegotiating, Jeffries advises.
A lot of ASC managers thought the managed care organizations would know what they will be reimbursing at this point, Serbin says. "There's a lot of disappointment in that." The bottom line is, they don't, Serbin says. Judith L. English, vice president of business operations at Surgery Consultants of America and Surgery Center Billing in Fort Myers, FL, says, "It's as if they have their heads in the sand like ostriches."
Look at each contract individually, Serbin advises. "Fifteen contracts can be written 15 different ways," she warns. This might be a good time to have your attorney review the wording, Serbin advises.
• Perform case costing.
The centers that Serbin works with are taking one specialty a month, examining the costs for a number of procedure codes within each, and then discussing with Serbin and English what to do with that information, she says.
In terms of your fee schedule, make sure your fees still are going to give you the same percentage of profits that you're accustomed to or that you will require, Serbin advises. "Some will be going down, and some will be going up," she says.
Another area that managers are examining is the 100 plus procedures that had their reimbursement decreased in 2007, English says. "They need to make sure those cases are not costing more than what they're being reimbursed for," English says.
Ensure your coders understand that there will be 500 more ASC codes in 2008, Serbin warns. "They'll be seeing some different things being done, different types of cases," she says.
• Assess service contracts.
Look at your contracts for housekeeping, information systems, and maintenance, Serbin suggests. "There's a lot of hidden dollars in maintenance contracts," she says. While you must have those contracts, determine if there can be some shared risk that might lower your dollar amount, Serbin says. If you've been open several years, you can estimate the benefit of the contracts. In other words, determine what you have spent, she says. "There may be some way to renegotiate that would be more beneficial for the surgery center," Serbin says.
• Put money in the bank.
Realize that your payments will not be accurate when the change takes effect, so you must audit 100% of them for accuracy, English warns. Also, they will be late, she advises.
"Be prepared that for the first three months after this takes place, you probably won't have reimbursement," she says. "You'd better have money put up ahead." Serbin suggests your center put away a cushion of several months.