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Case Study: Optimizing Accounts Receivable for a Leading Ambulatory Surgical Center
In this case study, we explore how a leading Ambulatory Surgical Center enhanced its accounts receivable management and reduced outstanding balances by implementing robust revenue cycle strategies.
Ambulatory Surgical Centers (ASCs) play a critical role in delivering cost-effective, same-day surgical care across multiple specialties. However, managing accounts receivable (AR) and reducing outstanding balances is a persistent challenge for ASCs due to their unique operational model and payer mix complexities. In this case study, we explore how a leading Ambulatory Surgical Center in California partnered with Bristol Healthcare to improve its accounts receivable management and reduce outstanding balances by implementing robust revenue cycle strategies.
Client Background
Our longstanding client is a highly esteemed ASC group with five delivery centers across the greater California area. They specialize in same-day surgical procedures across various specialties, including orthopedics, ophthalmology, gastroenterology, and pain management. With state-of-the-art surgical suites and highly trained clinical and administrative staff, the Ambulatory Surgical Center is committed to delivering quality care at an affordable price for its patients.
Despite their success in patient care, the ASC struggled with cash flow issues due to aging accounts receivable, delays in insurance reimbursements, and increasing patient responsibility balances.
Challenges Faced
The ASC faced three key challenges related to accounts receivable management, which impacted their overall financial health:
1. High Volume of Aging Accounts Receivable
The ASC had a significant portion of its AR tied up in outstanding balances beyond 90 days. These aging accounts were primarily from commercial payers, Medicare, and self-pay patients. Inefficient follow-up processes and inconsistent tracking led to delays in collections, increasing the risk of bad debt write-offs.
2. Complex Payer Mix and Inconsistent Reimbursement Rates
Due to the diverse payer mix, the ASC experienced variations in reimbursement rates and discrepancies in contracted amounts. Payer-specific requirements and frequent policy updates created billing inconsistencies, leading to denials and underpayments. Additionally, prior authorizations and retroactive claim denials contributed to the backlog of unresolved AR.
3. Increased Patient Financial Responsibility
With the rise in high-deductible health plans (HDHPs), a growing portion of the ASC's revenue depended on patient payments. However, the ASC lacked the tools to effectively communicate patient financial responsibility upfront. As a result, patient balances went unpaid, contributing to higher outstanding AR and lower collections.
The Solution
To address these challenges, we implemented a holistic accounts receivable management strategy that combined technology-driven solutions with proactive follow-up and process improvements. Here’s how each challenge was tackled:
1. Aging AR Reduction Strategy
We conducted an in-depth AR analysis to identify aging accounts and high-priority claims. The team implemented targeted follow-up protocols, ensuring that claims were reworked, corrected, and resubmitted promptly. Additionally, our proprietary automated claims management system flagged at-risk claims and prevented delays in collections.
Solutions Implemented:
- Segmentation of aging accounts for targeted follow-up
- Automated reminders and follow-ups for at-risk claims
- Weekly AR performance reports for better visibility
2. Payer-Specific Billing and Contract Review
Our certified AR experts conducted a comprehensive contract review and identified underpayments and inconsistent reimbursements. They negotiated with payers to secure appropriate reimbursement rates and developed payer-specific billing guidelines to minimize denials.
Solutions Implemented:
- Contract renegotiation with top payers
- Payer-specific coding and billing protocols
- Automation of prior authorization workflows
3. Patient Financial Engagement Tools
To address the patient responsibility issue, we introduced digital patient engagement tools that provided clear payment estimates upfront. The team also launched payment plan options and automated patient reminders, improving the collection of patient balances.
Solutions Implemented:
- Digital tools for upfront cost estimates
- Flexible payment plan options
- Automated patient communication and reminders
The Results
Within six months of implementing the new AR management strategy, the ASC experienced substantial improvements in its financial performance. Key results included:
1. Reduction in Aging Accounts Receivable:
Provider Credentialing/Enrollment and Incorrect Codes
Challenges with group enrollment procedures and filing correct codes and modifiers led to over $37,000 in outstanding balances in the 60+ days aging bucket.
Result: By simplifying the provider credentialing and group enrollment processes with all insurance payers, the aging bucket was reduced to $5200, reflecting a 90% improvement.
Denied Medicare Claims
Cash flow was severely impacted with $160,000 in the 60+ days aging bucket due to denied Medicare claims for nursing facilities.
Result: By identifying and correcting coding and modifier issues, as well as inaccuracies in denied claims, the outstanding balance was brought down to $72,000, significantly improving cash flow.
Rejected and Denied Claims
The ASC struggled with $10,000 in rejected and denied claims across the 30–120 days aging bucket.
Result: After reviewing and scrubbing all rejected claims, making necessary corrections, and resubmitting clean claims, the outstanding balance was reduced to $2,000 within just 30 days. A proactive claim-scrubbing process was also implemented to prevent errors in future submissions.
2. Improved Reimbursement Rates:
- Contractual discrepancies corrected with five major payers
- Average reimbursement rate increased by 12%
3. Increase in Patient Payments:
- Patient collection rates improved by 30%
- 50% reduction in patient accounts sent to collections
These improvements translated into a 20% increase in cash flow and a significant reduction in bad debt write-offs.
In Conclusion
This case study demonstrates the critical role that effective accounts receivable management plays in enhancing the financial health of Ambulatory Surgical Centers. By partnering with Bristol Healthcare Services, the ASC group was able to optimize their revenue cycle, reduce aging AR, and improve patient collections.
For ASCs facing similar challenges, outsourcing revenue cycle management functions to a specialized partner like Bristol Healthcare can deliver significant financial benefits while ensuring regulatory compliance. With proactive accounts receivable management strategies and patient engagement tools, ASCs can focus on delivering quality care while maximizing their financial performance.
Discover Revenue Cycle Solutions Designed for Fast-Paced Environments
At Bristol Healthcare, we specialize in providing exceptional ASC revenue cycle management solutions tailored to address your organization’s unique needs. Our extensive experience in the field, combined with a team of certified professionals and cutting-edge technology, ensures that we deliver superior services that enhance your bottom-line. Click the link to explore our range of comprehensive Ambulatory Surgical Center billing services.
Ready to transform your ASC’s billing processes? Schedule a no-obligation free consultation with an expert today!