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Improving Profitability: Automating Claim Adjudication
32 Plays1 day ago
We’re kicking off a brand-new three-part series on Improving Profitability at Your ASC. First up: Melanie Howitt, Transition and Implementation Manager at in2itive, joins host Nick Latz to discuss how AI and automation can streamline collections and reduce outstanding balances. She also shares field-tested best practices for optimizing the back end of the revenue cycle.
Then, in our Data & Insights segment, we dive into findings from HST’s latest State of the Industry report. With data from 590 surgery centers, we break down the most common reasons for case cancellations—and which ones your ASC can work to prevent.
Resources Mentioned:
HST’s State of the Industry Report: https://www.hstpathways.com/resources/surgery-center-industry-report/
How to Create a CustomGPT: https://www.youtube.com/watch?v=_u0tHytmKqw
Brought to you by HST Pathways.
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Transcript
Introduction to 'This Week in Surgery Centers'
00:00:01
Speaker
Welcome to This Week in Surgery Centers. If you're in the ASC industry, then you're in the right place. Every week, we'll start the episode off by sharing an interesting conversation we had with our featured guest.
00:00:12
Speaker
And then we'll close the episode by recapping the latest news impacting surgery centers. We're excited to share with you what we have. So let's get started and see what the industry's been up to.
Series on Improving ASC Profitability
00:00:28
Speaker
hi everyone, here's what you can expect on today's episode. Today kicks off a brand new three-part series focused on improving profitability at your ASC. Our first guest is Melanie Howitt, Transition and Implementation Manager at Intuitive.
00:00:43
Speaker
She joins our host Nick Latz to explore how AI and automation can boost your ability to collect outstanding balances. and shares proven best practices she's seen work in the field. After our conversation with Melanie, we'll switch to our data and insights segment.
00:00:58
Speaker
HST released our annual State of the Industry report in September, which analyzed client data from 590 surgery centers. Today, we'll spend a few minutes breaking down the most common case cancellation reasons.
00:01:10
Speaker
Hope everyone enjoys the episode, and here's what's going on this week in surgery centers.
00:01:18
Speaker
Melanie, welcome to the show. Hello. Thanks for having me. Molly, can you give the audience a brief overview of your role at Intuitive?
00:01:29
Speaker
Sure. I am the transition and implementation manager here at Intuitive. It's a pretty broad term that encompasses a lot of different pieces, ah ranging from client onboarding and making sure that those processes are successful to implementation of new automation, IT projects.
00:01:49
Speaker
I spent a lot of time kind of playing both sides of the coin between our IT initiatives as well as within operations.
Understanding Revenue Cycle Processes
00:01:57
Speaker
Fantastic. And so in this episode, Melanie, we wanted to drill into one specific piece of the revenue cycle process and claim adjudication and automation around that.
00:02:08
Speaker
But to set the context here, what we're going to talk about, can you give our listeners a feel for how you think about the key pieces of an overall revenue cycle process and where claim adjudication fits into that?
00:02:20
Speaker
Well, and claim adjudication falls into two different contexts. You have payer adjudication, which is everything that the payer's doing once they've got the claim.
00:02:31
Speaker
But... In the context of RCM and managing an overall AR, claims acut adjudication really falls into all of the pieces that happen on our side with our staff, making sure that claims are processing the way they should, doing follow-up, checking on claim status, following up on denials, making sure appeals get out the door. It's that all-encompassing back-end piece that is more than just what the payer is doing once they have the claim.
00:03:00
Speaker
Right. So back end after the claim submission. out After the claim submission. Fantastic. Got it.
Role of Automation in Claims Processing
00:03:07
Speaker
And so as you started to mention there on the back end, there's touch points and different things going on.
00:03:14
Speaker
How have you thought about, or what are the best practices around automating those process steps? And is this an area where AI can come into play in the process? Actually, it's pretty expansive automation.
00:03:28
Speaker
especially now plays a massive role in streamlining follow-up processes. And that can happen a couple of ways. For instance, pulling claim statuses from the payers two using the 277x12 messages as an example.
00:03:41
Speaker
Soon after at their claim drop on a regular cadence, we are currently doing this to identify claims that are still in process, set to pay, or possibly denied or requiring additional information in a much faster and much more accurately than what we've been able to do in the past.
00:03:58
Speaker
the sooner that we're able to surface this information to our staff. and In an automated fashion, we reduce the cycle times of working problem claims, and we reduce the instances of people touching claims unnecessarily.
00:04:11
Speaker
AI tools will layer on top of this, and they're able to backfill missing information by reaching out to like payer IVR systems or interacting with the payers directly for additional data gathering.
00:04:26
Speaker
Uh, this provides our staff with a clear picture. So they're able to take effective action in getting those claims adjudicated in the shortest amount of time possible. When we utilize all of this information in our analytics in both a systemic and iterative ways, then we can also identify trends and patterns of behavior.
00:04:47
Speaker
Got it. And so it sounds like just play that back, the first step is really enhancing the visibility and information for your team on claim status. And the second layer on top of that is AI and automation around what do you do to follow up? is that Is that a fair summary?
00:05:06
Speaker
That's fair. Really what it comes down to is using both automation and AI as those data gathering points so that our staff are more effective in what they're doing. Doing that lift of the simple repetitive pieces so that the staff are actually able to take action on claims instead of just churning through them.
00:05:26
Speaker
Yeah. Fantastic. And that's what I wanted to ask you about next is if you're able to automate the more repeatable side, what does that at free up the staff to focus on? And is it that you need less staff for the same number of claims or is it you're spending more time on the complex ones?
First Touchpoint Date in Claim Process
00:05:47
Speaker
It's a little bit of both. Ultimately, adding automation and AI to handle those simple repetitive tasks does make it possible to increase our staff capacity.
00:06:00
Speaker
We can work with a set number of staff to handle a much larger set of claims, but at the same time, because we're taking that repetitive stuff off the table, they're actually able to focus on the complex, the things that automation just can't handle, that AI cannot effectively handle at this point.
00:06:22
Speaker
That's the big piece for us is making sure that our staff are focused on the things they need to stay focused on that we can't do in a simple, repetitive manner.
00:06:33
Speaker
Yeah, makes sense. Yeah. Human touch still important. There's cognitive interpretation that a human can do that a machine just is not capable of. And so it's getting the right, right task to the right channel and follow up mechanism. And you guys have enough volume where I'm sure you've done a lot of testing.
00:06:53
Speaker
Have you found that there's certain frequency and certain number of sweet spot of touch points in the followup to be most effective or less effective? The biggest piece that we've done some pretty extensive and like analytics on, and we've done it over the course of time and we've come back to it a few times and results have actually stayed pretty consistent, is that first touch point date.
00:07:18
Speaker
We've found that upwards of 75% of claims will pay within 41 days and from data service. And 95% of claims are going to have some kind of response within that timeframe.
00:07:31
Speaker
whether they're coming back and asking for additional information, maybe in a denial is coming, patient needs to reach out for coordination of benefits. We get some kind of response from the payer 95% of the time within that 41 day period.
00:07:45
Speaker
And for us, that's a pretty massive shift. Historically, we've always worked within this concept of you touch every claim that's sitting out there every 30 days, no matter what. By extending that first touch timeframe by 11 days, we've see a much better use of our staff's time and being able to focus on accounts that actually require intervention versus, like I said, just churning through accounts for the sake of touching them.
00:08:10
Speaker
And our staff capacity also gets enhanced, which when you pair it with automation and AI driven statusing, we actually have a functional guardrail in place now to prevent claims from falling through cracks.
00:08:21
Speaker
Yeah. That's super interesting. Sounds, sounds like the analytics is allowing you to better match the timing of your outreach and process with the payors. Absolutely. driving a process
00:08:34
Speaker
And you mentioned a couple of metrics in there and I wanted to double click and pull those out. did you guys, are you guys pretty maniacal about first touch date is a metric and KPI ah that you track? That is absolutely one that we keep track of, but overall touch rates is something to be paying attention to.
00:08:52
Speaker
And we look at it really within the scope of our clients and our total performance. volume of claims that we look at. But those account touch rates is a good indicator of staff effectiveness once a claim has gone to a payer.
00:09:07
Speaker
How often are staff needing to touch an account before a payment's received? know, a high average rate, either globally, individually, or maybe related but specifically to a payer, may indicate that claims are being touched too soon. Maybe you've got some staff upskill opportunities or even potential payer side issues that may need to be escalated.
00:09:29
Speaker
Another piece that we throw in there when we're working at the data is our days to pay, which is different than days in AR. They're often conflated, but they are two calculations.
00:09:41
Speaker
Your days to pay is How long does it take you to get the claim out the door combined with how long may it sit in rejection status the clearinghouse, along with those, the days that a payer is going to adjudicate.
00:09:55
Speaker
When you're looking at this number from a payer level, you've got a good baseline determining not just potential issues with maybe getting claims out the door, but tracking over time, potential issues or delays that happen with the payers.
00:10:07
Speaker
Got it. And want to make sure I understand that. What's the primary difference? In days to pay versus days in AR yeah days to pay days to pay is like I said, specifically the sum of how long does it take you to get claim out the door? how long sit in rejection, uh, what the clearing house and how long is it going to sit with a payer?
00:10:26
Speaker
Your days in AR is more of an amalgamated ah looking at three months worth of data between your Cash coming in as long as well as your net revenue.
00:10:38
Speaker
So it's a slightly different calculation and it's looking at two different sets of numbers. They can overall end up being pretty close. They should trend directionally the same, right? But yeah, there's an AOR cash in and out.
00:10:52
Speaker
Yeah. And whereas this is actually looking at time as a matter of how long does it take from that data service to that data payment and how long does that take?
00:11:04
Speaker
Like I guess said, different calculations, they tend to track pretty close most of the time, but when you start seeing the divergence is when that really comes into this place of you've got something to take a look at.
Enhancing Billing Times in ASCs
00:11:16
Speaker
That's helpful. Okay. And for ASCs that want to improve their follow-up process, what low-hanging fruit do you recommend tackling first? Honestly, just as we started with, your lowest hanging fruit is improving you in improving processes is having clear expectations around that first touch follow-up timeframe.
00:11:35
Speaker
Too soon, and you're going staff spending time on accounts they don't really need to touch. Too late, and you're going to see a potential drag on cash flow as claims fall through the crack. Automation of this activity where it's possible speeds up your overall so overall cycle time and reduces your days to pay and ensuring your staff are bogged down with non-value-added steps.
00:11:55
Speaker
Sure, okay. And last question for you today, Melanie, and we do this every week with our guests. What is one thing our listeners can do this week to improve their surgery centers? Ultimately, a concentrated effort on maintaining a low claim submission timeframe, your days to bill, and analyzing those chick claim adjudication bottlenecks within claim rejections and payer adjudication lags.
00:12:17
Speaker
It'll give you a solid starting point to identify potential areas for improvement, or if everything is going great, Celebrate the success success of your staff. Fantastic. i like the celebration piece. And if we double click on days, the bill, you have one or two tips for centers on how to get out of bill faster.
00:12:37
Speaker
On how to bill faster, your documentation being in line as quickly as possible. Ultimately you want to be looking at your mid days to be at two to three from the data surface documentation is done.
00:12:50
Speaker
Coding's done. Charge entry is done by day three. Fantastic. like Melanie, thanks so much for joining us. All right. Thank you.
00:13:02
Speaker
HST Pathways released an updated version of our State of the Industry report this past September, highlighting best practices, key process steps, and KPIs for every step of the patient journey and for nearly every recurring administrative duty.
00:13:15
Speaker
Most importantly, using our own unique data set from our clients, we were able to extract data points so that anyone in the industry could compare themselves to their peers. Two quick disclaimers, we only pulled data from clients who gave us permission and we omitted any extreme outliers.
00:13:29
Speaker
So today, we're taking a closer look at a number that's costing surgery centers much more than you might think, case cancellations.
Industry Report on Case Cancellations
00:13:36
Speaker
According to the 2024 State of the Industry Report, 21% of cases at an ASC are canceled on average, which you think about it, is a little more than one out of every five patients.
00:13:48
Speaker
When we looked at the data, here's what stood out. Patient canceling is the number one reason with roughly 45,000 cases. The provider canceling is the number two reason with roughly 41,000 cases.
00:14:03
Speaker
So combined, the top two reasons account for over 40% of case cancellations. Other notable contributors of reschedule was around 12,800 cases. Patient health issues around 6,800. Surgery center canceling was also around 6,800. Insurance issues was around 5,600.
00:14:19
Speaker
surgery center canceling was also around sixty eight hundred insurance issues was around fifty six hundred And then scheduling errors was around 4,500.
00:14:31
Speaker
Now there's about 20 reasons or so on the actual graph. So if you want to see the full breakout and the other reasons as well, I'll link to the full state of the industry report in the episode notes so you can check that out and follow along as if you'd like.
00:14:45
Speaker
Now, some of these reasons are completely unavoidable, right? Sudden patient illness, family emergencies, environmental events, but many are within your control. So let's break down a few key categories.
00:14:57
Speaker
Let's start with the patient canceling. Again, this is the number one reason for a case being canceled. So not all of these are preventable, of course, but many do stem from fear, confusion, or cost concerns, which are things you can get ahead of.
00:15:12
Speaker
I'd also recommend having subcategories here to get even deeper into the reasons, just so you can see, okay, out of all the reasons a patient canceled, maybe there are a few that are in our control, or maybe we're seeing an uptick somewhere that you can get ahead of and address.
00:15:26
Speaker
And at the end of the day, just proactive communication matters. So use those text reminders, send the pre-op instructions through text, through email, and also make sure you're sending out your financial estimates well in advance of the procedure. All of that will help contribute to improving that number.
00:15:44
Speaker
The second reason is that the provider canceled. Now, this is a tough one, but again, I'd recommend having subcategories to give you even more context here. Why did the provider cancel? That'll help you shed even more light on this issue.
00:15:59
Speaker
I would also recommend here sharing those provider cancellation statistics in your ASC somewhere so that all your staff can see, like the break room. You'll also want to share these numbers at your board meetings for sure, as providers are extremely competitive and no one wants to look like they're the reason that there's disruption to the daily workflow or things are falling behind.
00:16:20
Speaker
So I would first give your docs a heads up. Maybe you say, hey, starting in Q4, I'll be sharing individual provider cancellation rates. It just could be an effective way to try to lower this number.
00:16:31
Speaker
The third reason, so let's start talk about insurance or financial issues. Over 10,000 cancellations were linked to insurance, authorization, or financial concerns. To improve these numbers, at the bare minimum, you should be re-verifying insurance at least twice.
00:16:47
Speaker
So once at scheduling and then once the week of the procedure. Automated verification tools can catch these issues before they become cancellations. You'll also want to send each patient a detailed itemized invoice that is void of any medical jargon so they know exactly what they're paying for and when.
00:17:05
Speaker
This will help, again, reduce those last-minute cancellations due to financial confusion or just financial stress.
AI Strategies for Reducing Cancellations
00:17:12
Speaker
Fourth reason here, let's talk about scheduling errors in labs. So scheduling and lab-related cancellations accounted for over 8,000 cases being canceled. In this instance, using ah centralized case management where your entire care team, so surgeons, anesthesia, front desk, can access updates in real time.
00:17:30
Speaker
The earlier you spot an issue, the more time you have to course correct. And lastly, if you're not already tracking your own cancellation reasons, obviously you should start now.
00:17:41
Speaker
But if you want to take it a step further, this is where a custom GPT can really be a game changer for you. So a custom GPT is basically a tailored AI assistant that analyzes your specific data and workflows and can help deliver super fast, actionable insights.
00:17:57
Speaker
So you don't need any technical experience to create one. It only takes a few minutes to set up and you can do so without using any PHI or integrating it with your existing tech. So all of your data is completely safe.
00:18:10
Speaker
You do need the paid version of chat GPT, but it's only about $21 per month and it's so worth it. So Again, check out ChatGPT, get the paid version and start creating your own custom GPTs.
00:18:23
Speaker
And if you've never used one before for anything, actually have a video on how you can create one. So I'll link that in the episode notes as well. But back to case cancellations. So you can upload in your custom GPT your own historical case data going back as long as you'd like.
00:18:40
Speaker
So, you know, obviously the longer the better, but let's say you have it for a year, two, three years, all of it can be super helpful. And then moving forward, maybe you get into a routine of uploading data into your custom GPT every 30 or 60 days, let's say.
00:18:55
Speaker
So then in seconds, you can ask things like, What were the top three reasons for case cancellations last quarter? Or which physicians had the highest cancellation rate rates in March? or let's say you're in that board meeting and on the spot a physician asks, how many cases have been canceled due to anesthesia? Is that number going up or down?
00:19:14
Speaker
You can immediately ask your custom GPT and get an answer on the spot. Or even better, let's say you upload a few years worth of data, you can ask it looking ahead to Q3 2025, please use our historical data to look at case cancellation reasons and share what we should start prepping for now.
00:19:33
Speaker
So the point is you don't have to just use this data for retroactive insights, but instead you can also use it to improve future KPIs and prevent what you can from happening again. Case cancellations are inevitable, but 21% is just not sustainable.
00:19:48
Speaker
So use your tools, shoo mind your workflows, talk to your patients, and lean into your data. And if you're interested in more data points and use cases, head to our website to check out the full State of the Industry Report to get your hands on even more data.
00:20:02
Speaker
And that officially wraps up this week's podcast. Thank you, as always, for spending a few minutes of your week with us. Make sure to subscribe or leave a review on whichever platform you're listening from. I hope you have a great day, and we will see you again next week.