In the healthcare industry, hospitals provide outpatient services to patients. These outpatient services represent a significant part of the hospital’s revenue. For hospitals to maintain their revenue, they need to keep the number of patients or the amount of revenue per patient constant. To help with billing for these services, some hospitals have outsourced the work to ASCs. An Ambulatory surgical center provides operating rooms and surgical equipment where physicians can perform Surgical on patients who are typically not admitted to the hospital. The Hospital Outpatient Billing Industry represents the total number of Ambulatory surgery centers nationwide.
What is ASC Billing?
ASC is a payer of last resort, responsible for the billing and adjustment of medical billing and coding services provided to patients in the care of other medical facilities. ASCs are not directly involved in patient care, but they will send individual bills to patients to obtain payment from the patient’s primary health plan. ASCs take on the biller role and then relay that information to their healthcare provider. The patient is then responsible for paying for their immediate health plan. The healthcare provider, who typically owns the Ambulatory surgical center and provides the service, will then bill the ASC for their services based on a negotiated rate.
What is Hospital Outpatient Billing?
Hospital Outpatient Billing is a specific billing plan that represents the payment of medical billing service provider to patients who were not admitted to the hospital. The hospital then submits a claim to the patient’s primary insurance carrier for reimbursement. These services are typically provided at an Ambulatory surgical center. An ASC will bill the patient’s immediate health plan for the services offered. If no medical claim has been submitted, the ASC will bill for a medically-attended acute care hospital outpatient service.
The Difference Between ASC Billing & Hospital Outpatient Billing
ASC Billing and Hospital Outpatient Billing are both responsible for Hospital Billing Services provided to patients by hospitals. The main difference is that the hospital outpatient billing industry represents hospitals specializing in Outpatient Care. ASCs have a specific role as payers of last resort, responsible for the billing and adjustment of medical billing and coding services provided to patients at Ambulatory surgical center nationwide. ASCs are not directly involved in patient care but will send individual bills to patients to obtain payment from the patient’s primary health plan.
How Is Payment Different Between ASC Billing & Hospital Outpatient Billing?
The payment method for Ambulatory Surgical Center Billing Services is typically a negotiated rate between the ASC and the facility. This negotiated rate can either be discounted or the total price depending on the contract between the parties. Once an ASC has received payment for their services, they send any remaining balance due to the hospital for which they are billing.
The payment method for Hospital Billing is typically based on a predetermined fee schedule established by individual states. This fee schedule is generally set at a discount from the hospital’s retail charges to incentivize care access. Out-of-network hospitals seek payment directly from their patient’s immediate health plans.
1. The Value System – Relative weight
The value system differs between ASC billing services and Hospital Outpatient billing. ASCs typically negotiate a discounted price with hospitals to offer better service to their member facilities. They are also hopeful that the contract will eventually provide them with the ability to prevent any leftover balance after the negotiated rate has been paid. On the other hand, hospitals outsourced medical billing services hope that by paying a predetermined fee schedule, they will get an adequate volume of patients to offset any future losses. Effective Outpatient Hospital Services Billing Guide aims to balance both liability and exposure and create a fair return on investment for all parties involved in the process.
2. Change in Conversion Factor
The change in conversion factor is typically how the ASC Coding and Billing and hospital are paid. For ASC Billing, a discount is generally negotiated for which both parties expect to receive payment. The pre-negotiated rate represents a discounted rate from hospitals’ retail charges. The conversion factor will then be determined by the negotiated rate and what percentage of that amount the customer will pay at the time of service.
For Hospital billing, a predetermined fee schedule exists to incentivize access to care and create adequate volume to offset any future losses due to discounts provided by payers of last resort. The conversion factor determines how much the patient will pay out of pocket at the time of service after all applicable insurance has been applied.
3. The Wage Index
The wage index differs between ASC Billing & Hospital Outpatient Billing. The wage index is what makes up each of the two components of a conversion factor. Providers and facilities want to keep their employees as happy and productive as possible. This is why many care providers base their wage index on their employee’s location, not necessarily their expertise. ASCs are responsible for the staffing of their facilities. Therefore, the wages paid to their employees may not be as high as in hospitals.
4. The Relative Weight
The relative weight differs between ASC Billing and Hospital Billing because they have different priorities regarding bargaining power. ASCs have a much weaker bargaining position compared to hospitals because they cannot provide patients with the same level of care that a hospital can provide. Therefore, Ambulatory surgery center billing guidelines need to be able to negotiate with hospitals to provide affordable healthcare services. On the other hand, hospitals charge much less and are therefore at a much more significant advantage when it comes to bargaining power.
Summing up the key points
The ASC & Hospital Billing Services industries are very similar in their organizational structure but also very different in their approach to the reimbursement of medical billing and coding services. The most significant similarity is that they both have an indirect role in paying for medical services. They are also vital in regulating the healthcare industry by ensuring facilities are paid for their services.
Another similarity is that both industries are responsible for making certain financial transactions with patients complete and accurate. Finally, their relationship with each other is substantial. ASC Coding and Billing is a necessary part of Hospital Outpatient Billing. They mutually rely on each other, and both act as payers of last resort for the medical services provided to hospital patients, and this is where a company like Synergy HCLS can prove to be helpful.
