Financial errors common in outpatient surgery

Mistakes involving patient classification and preauthorization of procedures are among a lengthy list of common financial errors made in the same-day surgery arena, says Bob Whipple, RNC, CCM, CCS, MHA, a Boston-based senior management consultant with ACS Healthcare Solutions.

Those errors can cost facilities thousands of dollars in denied claims, as well as cause them to lose business to competitors, Whipple adds.

With regard to obtaining authorization for the surgery, "sometimes the [facility] gets it, and sometimes the physician's office gets it," Whipple says. If they pre-certed for an inpatient, and your facility performed it outpatient, the bill is denied, he says.

"People who schedule for physician offices don't know the first thing about coding," he says. "They will send a sheet that says 'possible kidney transplant,' and that's not a diagnosis."

The designation should be "inpatient" or "outpatient," but not "observation," Whipple says. His experience is that a lot of hospitals make the mistake of pre-certing a same-day surgery patient under the observation designation. "It's a big compliance issue," Whipple notes. "How do you know they will have to observe somebody after surgery? You don't have a crystal ball."

A patient cannot be put in observation status preoperatively, he emphasizes. "Postoperatively you could think about it, but I wouldn't recommend it," Whipple says. Mistakes happen with the observation designation because people don't understand what it really means, he says. "The physician thinks, 'I want to observe the patient,' [so that must be the right classification]," Whipple says.

With Medicare, there are many CPT (common procedural terminology) codes that are for inpatient-only procedures, Whipple adds. "If a procedure happens to be on the inpatient-only list and the patient receiving that procedure doesn't have inpatient status, Medicare will deny the claim and you can't appeal it, he says. "It's a technical denial," Whipple says.

There are facilities performing mastectomies, laminectomies, and thyroidectomies — all inpatient procedures under Medicare — on an outpatient basis, and when the bills for those surgeries are denied, there is no recourse, he points out.

There needs to be a clinically trained person who literally reviews every patient before he or she is placed in outpatient surgery, he emphasizes. "You can't expect office staff to do it," Whipple says. "They will put patients in a bed with wrong orders or no orders."

All areas that perform functions that are part of the revenue cycle ultimately should report to the CFO, Whipple says.

"Sometimes hospitals have the bed board report to nursing, or have some sort of pre-cert department or a transfer center that works on its own in another location," Whipple says.

Are you making any of these mistakes?

One of the costly errors that hospitals are prone to make in their same-day surgery operations has to do with cardiac interventions, such as cardiac catheterizations, Whipple says.

The Medicare reimbursement rate for cardiac caths is about $5,000, he says. However, if the physician puts in a stint as well, that procedure is angioplasty. It goes in the inpatient category, and reimbursement is about $19,000. Therefore, if the change in patient classification is not made and the surgery is billed as an outpatient procedure, the hospital loses $14,000, Whipple notes.

"When I'm doing revenue cycle assessments, these are areas where [hospitals] fall down all the time," he says. "I almost always find it with angioplasties."

Other mistakes that are frequently made in same-day surgery settings include the following, Whipple says:

  • developing a process that is organized around the staff and not the patient, specifically as it relates to same-day work-up and surgery;
  • not gaining cooperation from ancillary departments to facilitate and support same-day services;
  • not changing surgical scheduling processes to support same-day services;
  • not ensuring preregistration for all same-day patients, including preauthorization/precertification and estimation of copays for collection at time of service.

Don't forget satisfied patients

Patient satisfaction also plays a key role in the financial success of a same-day surgery program, Whipple says. He recommends a patient satisfaction survey be used in the same-day surgery area, and use the results to make improvements and to provide feedback to staff. General satisfaction surveys aren't specific enough to meet that need, Whipple says. He suggests asking questions geared toward the outpatient experience: Was it easy to get an appointment? Was the phone answered promptly? Do you feel you were given answers in a timely manner? (See benchmarks.)

Leverage as much technology as possible to keep customers satisfied, including providing on-line registration and implementing kiosks to allow service area check-in with electronic signature and payment of copays and deductibles, he advises.

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  • Bob Whipple, RNC, CCM, CCS, MHA, Senior Management Consultant, ACS Healthcare Solution, Boston. E-mail: