Ambulatory surgical centers (ASCs) continue to undergo decreasing reimbursements, increasing regulatory and industry changes, and other industry pressures. Many ASCs are uncertain of whether they should enter into contracts with insurers, including Medicare, or remain out of network. Here are some of the main things ASCs should consider when making that call.
For Medicare purposes, ASCs are distinct entities that exclusively provide surgical services to patients who do not require hospitalization and where the duration of services does not exceed 24 hours following admission, as per CMS. This definition applies to ASCs regardless of who the payer is. According to the HHS Office of Inspector General, Medicare sets minimum health and safety requirements for ASCs through the conditions for coverage, and CMS requires that ASCs become Medicare-certified to show they meet these conditions.
For CY2018, the ASC Notice of Proposed Rulemaking (NPRM) (CMS-1678-P) would revise the amounts and factors used to determine the payment rates for Medicare services paid under OPPS and the ASC payment system.
ASCs can choose to be contracted with Medicare or other insurers, or choose to take the out of network route. Over time, many ASCs have taken the out of network route; however, increasing price pressures and decreasing reimbursements mean that ASCs must think carefully and then decide the best route for their business.
OON Billing: Challenges for ASCs
Being out of network means that the ASC does not have a contract with an insurance carrier. Out-of-network providers face certain challenges, and are vulnerable to making critical mistakes that may jeopardize their compliance with state and federal laws. ASCs that choose OON billing must understand that claims will usually be paid over a longer timeline, which means that the ASC’s cash flow may be impacted, according to Becker’s ASC review. Delayed payments could be due to additional information and documentation being requested by insurers.
Another challenge lies with the rate insurers pay. According to Becker’s, non-contracted ASCs typically determine the amount they charge patients insured by non-contracted insurance carriers on usual, customary and reasonable (UCR) charges. However, recently, many health plans have changed their reimbursement rate basis from UCR to a percentage of Medicare, and so-called phantom OON coverage is now commonplace in the healthcare market.
Balance Billing Concerns
The issue of balance billing is another area of concern. Balance billing is when the payer pays the usual rate for a procedure performed out of network and the patient pays the remaining amount or balance. Different state laws apply to balance billing, which makes compliance particularly difficult. Recent lawsuits have exposed billing errors, and the failure to balance bill patients can lead to large recoupments, audits and litigation for fraud.
The effect of balance billing on the relationship between ASCs and patients is an area of concern. When treated by in-network providers, patients usually get a discount, but out-of-network balance bills can be more expensive, especially as deductibles, coinsurance and out-of-pocket maximum costs have roughly doubled in recent years. Getting surprise bills can be a negative experience for the patient; as a result, complaints can multiply, causing more compliance headaches for the ASC.
Best Practices for ASCs
It’s more important than ever for ASCs to understand the benefits and the costs associated with contracting with Medicare and third-party payers. When contracting, you must weigh the pros and cons to decide if OON billing is the best route for your business. There are some best practices you should keep in mind when deciding between contracting or OON billing:
- List the insurers your ASC is contracted with on your website
- Have a facility license prior to contracting with large insurers such as Blue Cross, United Healthcare, Medicare and Aetna
- Email provider relations while getting in touch with companies you want to contract/credential with
- When negotiating for a contract, you can and should be specific in regards to bundling
- When billing out of network, ensure your patient signs a financial agreement
- Provide written disclosures to your patients regarding coinsurance, deductibles and balance billing
- Involve ASC owners and administrators in reviewing monthly collections and evaluating costs
- ASC owners and administrators must be aware of current contracts, and be involved in any negotiations
Do You Understand the Risks and Costs?
ASCs must understand the importance of risk and cost to payers during the contracting process. You must understand what payers look for, and how to effectively communicate with them. Medical billing expert Stephanie Thomas, discusses the tips and tricks for billing out of network in “Challenges with ASC Insurance Contracting vs. Out of Network Billing,” a webinar with ProfEdOnDemand. Stephanie discusses how you can learn to read contracts and understand what your rights are for renewals. She discusses the top trends ASCs are facing with contracting with Medicare and third-party payers.