In this era of declining reimbursements and rising business expenses, it can be a struggle for ambulatory surgery centers (ASCs) with narrow profit margins to maintain a sufficient cash flow to cover their operating costs. In recent years, the tightness of this gap between revenue and expenses has forced many ASCs to explore alternative strategies for ensuring financial stability.
One option now used by a growing number of ASCs is the cash-pay program: a health care payment model in which patients, generally those without insurance or with high-deductible health plans, are able to self-pay a set cash price for the services they receive at the ASC. These programs can work well in helping ASCs attract a broader range of patients and avoid some of the limitations that highly restrictive payor contracts can impose. However, for optimal effectiveness, it’s important that they be well thought-out and carefully implemented.
A recent article from Becker’s ASC Review outlines the following eight best practices that ASCs should keep in mind when designing and executing a new cash-pay program:
Set goals for the program.
ASCs shouldn’t implement a cash-pay initiative until key stakeholders, including any physician partners of the ASC, define and agree upon clear goals for the program. Administrators should be ready to thoroughly consider issues such as price levels for cash pay, the logistics of accommodating cash payments, and flexibility around the pay structure. Doing so will help ensure that the design of the cash-pay program is an appropriate fit for both the ASC and the patient population it is targeting.
Define a cash-pay discount.
It’s common practice for ASCs to offer their services at a discount to cash-pay patients, but they must take a number of factors into account to make sure that the price is both competitive and acceptable. Administrators and surgeon partners must reach consensus on what the price for professional services should be, in addition to calculating completion times for cases, anesthesia charges, and other incurred costs. This price is typically higher than Medicare by roughly 1 percent.
Create a plan for serving traveling patients.
If a cash-pay patint intends to travel long distances in order to receive service at a particular ASC, it’s important to make sure this person is an appropriate surgical candidate before he or she makes the trip. A pre-surgical telephone consultation is highly recommended, as is a plan for his or her post-surgical follow-up care, whether that takes place at the ASC or at a primary care facility in the patient’s hometown.
Communicate payment plans clearly.
Clear and transpaent communication around payment plans and methods is very important in the cash-pay model. Patients must know well before receiving any services exactly how and when they will be able and expected to pay. Some ASCs choose to accept promissory notes, others take different forms of credit, still others work on a combined method of taking half the payment up front, and the other half in installments over a set period of time. In addition, whichever methods an ASC decides to accept, the ASC should also offer a certain amount of flexibility on a case-by-case basis.
Designate an authority on payment flexibility.
To avoid confusion or mixed messaging, the ASC should appoint one person within the cash-pay program’s structure as the authority on payment flexibility; typically, this figure comes from the ASC’s board of directors. Having someone in this role is essential because it’s impossible to predict beforehand how much flexibility each individual patient might require. The authority figure should be in place well before the cash-pay program is launched so that everyone involved is clear on who is in charge and what degree of authority he or she has before dealing with any patients.
Develop a charity care policy.
All cash-pay programs should be ready to provide some form of charity or hardship policy for patients in need. Typically, these types of policies are relatively easy to calculate as they are based on clearly specified federal guidelines. The policy should be established and implemented prior to the launch of a cash-pay program so that the ASC can accept and educate patients about their options as soon as possible.
Market the cash-pay program online.
Offering a cash-pay program can be a major draw for patients, and ASCs should make the most of this by focusing on related online marketing efforts. At minimum, ASCs should post prices for services online; other efforts to enhance an ASC’s online presence include launching a blog or other social media platforms to create and share relevant information about health care issues with prospective and current patients.
Prepare for national and international visitors.
Sometimes, an ASC’s cash-pay program can lead to a burst of “medical tourism, which involves patients coming from across the country, or even from other countries, to take advantage of health care services for cash. ASCs can greatly boost their businesses by preparing ahead of time to handle these visitors. For example, they can have procedures in place to help visitors find nearby accommodations. They can also arrange transportation to the facility.