Surgery Center Coding and Your Bottom Line Use audits and training to stay on top of contracts BY JESSICA EDMISTON AND LORI SAMII

Jessica Edmiston Lori Samii

The quality of an ASC’s cod- ing can make the difference between a struggling cen- ter and a suc-

cessful center. Incorrect coding and bill- ing practices might mean a facility is not being paid for all of the procedures it performs. Inefficient processes and poorly trained staff can also run up a sur- gery center’s payroll costs—typically, a facility’s biggest operational expense. Worse yet, noncompliant coding practices can make a facility’s own- ers the subject of legal action, costing untold sums in legal fees and poten- tial penalties and fines. When it comes to evaluating your ASC’s billing pro- cesses and addressing any concerns you uncover, understanding exactly where to look and what to consider is an important first step.

Reimbursements Private payers are imposing more scrutiny prior to reimbursing claims than ever before. To keep costs down in this era of guaranteed issue and a lack of lifetime caps on payouts, vast teams of insurance company analysts are tasked with identifying mistakes made by providers. In fact, private payer denials in some

parts of the country can reach up to 40 percent, according to a study by the US Government Accountability Office (GAO), an independent, nonpartisan congressional watchdog. On average, that study showed, aggregate denial rates were generally between 11 and 24 percent and were due exclusively to eli- gibility, coding and billing issues. Understanding the various coding nuances for every payer that your ASC


works with will help ensure maximum reimbursement for each procedure performed. For example, procedure- specific coding modifiers might differ slightly from payer to payer, with some preferring one code for bilateral proce- dures rather than indicating separately that a procedure was performed on both the left and right sides of the body or its extremities. It is a seemingly minor coding distinction, but it can have a big effect on reimbursement and overall profitability for some centers.

Labor Costs Employee salaries and wages make up 22 percent of a typical ASC’s net operating revenue, according to 2016 VMG Health research. The compa- ny’s research also shows that an aver- age administrative employee at an ASC makes $26.24 per hour, with an average facility employing 9.5 full- time employees.

With such high labor costs, it is

important that coders get their claims right the first time. Appeals are costly, and while GAO research suggests appeal approval rates are between 40 and 60 percent, it is important that denials are prevented proactively to avoid unnecessary labor costs. Denials can also add endless hours to the reve- nue cycle process with no guarantee of ever getting paid on those claims. How can you increase your ASC’s chances of getting your coding and billing right the first time? A coding audit can give ASC owners a good snapshot of operational performance. This starts with a review of a 5–10 percent sample of your ASC’s coding case volume, which should reveal an accuracy rate of 97 percent or higher. These assessments should be con- ducted at least annually and, prefera- bly, quarterly. Audited files also should be selected and weighted to reflect an

The advice and opinions expressed in this column are those of the authors’ and do not represent official Ambulatory Surgery Center Association policy or opinion.

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